If I don't pay a payday loan, will I go to jail?

No. There are laws put in place in Canada that make it clear you can't be jailed for failing to pay a debt. Bankruptcy laws were created to provide protection for those who cannot pay back their debts. Note that, if you fail to repay a debt, your lender to might be able to sue you to regain what you owe. If you're having trouble managing your financial obligations, speak to a financial advisor or lawyer to learn about your options.

Should I declare bankruptcy if I’m in a payday loan cycle?

Bankruptcy is an option to get out of a payday loan cycle, but it comes with the disadvantage of staying on your credit report for a number of years, and it's usually a red flag for lenders when you apply for future loans. If possible, exhaust all your other options before filing for bankruptcy.

Why is it so easy to get trapped in a payday loan cycle?

Payday loans often need to be repaid in just 2-4 weeks. This leaves borrowers little time to find enough money for repayment. On average, most individuals who take out payday loans shell out hundreds of dollars in fees to continually borrow less than that over the course of a year. Also, since many payday loans come with no credit checks, it becomes very easy to borrow money, but much harder to pay it back.

Why is it important to interview a credit counselor?

It's important to interview potential credit counselors to make sure they have your best interests in mind. To find good credit counselors that don’t require a fee, start with this page on the Government of Canada website.