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Sep 27, 2012 Well, according to the FTC the answer is no. There are two stages to this issue. First a lender must be licensed in the state they are lending you money in and if they are licensed they must file a civil suit before a judgement can be entered and a garnishment ordered. Many lenders are not licensed and 

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They can keep up this way for a time, but since payday lenders often charge interest rates of up to 782% in Minnesota, it won't work for very long. allows a creditor to collect money by garnishing a percentage of the debtor's wages, or by levying a bank account; A civil judgment does not allow the creditor to put you in jail.