Michelle Neff says she planned to repay quickly a high-interest $1,000 payday loan from Check City. But she became ill, lost her job, and couldn't pay it all off right away. She said the lender would not make a payment plan she could afford — then sued her for $1,800 including interest and fees.

She says Check City threw extra salt in the wound. Her loan contract gave Check City the choice of where to file any legal action. It filed in Provo near its headquarters, instead of Taylorsville where the loan originated or West Jordan where Neff lives.

"So I had to pay the extra gas and take extra time off work to go down there" to fight the claim on two different court dates, she said. "It's hard enough to try to pay back those loans without being forced to travel that far, too."

Linda Hilton, a longtime payday loan critic and director of the Coalition of Religious Communities, says Neff may actually be luckier than most. "We have seen a lot of people from as far away as St. George or Logan have payday loan suits filed against them in Provo, as allowed by their loan contracts. They can't afford to travel to fight them, so lenders win default judgments."

Sen. Ben McAdams, D-Salt Lake, says he aims to stop that. He is preparing a bill that would force payday lenders to file any legal action on their loans in the county where they originated.

"People need to have the right to defend themselves in the county where the loan is made," McAdams said. Otherwise, he said, "you cross into the realm of closing the gates of justice to individuals."

Wendy Gibson, a regional manager for Check City and spokeswoman for the Utah Consumer Lending Association of payday lenders, said the industry is hesitant to comment on McAdams bill because it has not yet seen it or talked to him about it.

But she said in a written statement that for the past two years, Check City customers who are "in default do not travel to Utah County from St. George or Logan to appear in court. Cases from Washington County are tried in Washington County; Cases from Weber County are tried in Weber County."

Gibson did not respond to questions about what is done in other counties, nor how many payday lenders currently include in their contracts clauses giving them the choice of where to file lawsuits.

Payday lenders often charge 520 percent annual interest on short-term loans, or $20 for every $100 loaned for two weeks. Disclosure forms filed with the state last year showed that some charge up to 2,294 percent annual interest — or $50 a week on a $100 loan. Lenders say rates are high in part because they deal with people with poor credit.

Hilton's organization did a study last year that found — as did others by the news media — that payday lenders file an average of 11,600 cases against defaulters a year. It swamps some courts, accounting for 79 percent of all small-claims cases at 4th District Court in Provo near the headquarters of Check City.

"They [payday lenders] are indeed the most prolific litigants in our state," said Christopher Peterson, associate law school dean at the University of Utah, who has written books on predatory lending.

He adds that "there's certainly a lot of default judgments in those cases." He said allowing lenders to chose distant court venues probably adds to that, but no research has been done on how many borrowers may also think simply they it is a waste of time to show to court or that they have no defense.

Peterson said McAdams' bill "addresses one abusive practice in an inherently abusive industry," but it would be better if Utah had the political will to do like Arizona and Montana and cap interest rates at 36 percent "which is the interest rate cap that Utah had for most of the 20th century and only lost in 1984."

McAdams — who is running for Salt Lake County mayor — notes that several attempts to rein in the payday loan industry at the Legislature have failed, and he is trying to do what is possible. "The Legislature has drawn a bright line that this is an industry that they will support and allow to exist. But I think that it's not unreasonable to expect some fairness in the contract dealings."

During the 2010 election cycle, payday lenders were the 10th largest political donors among industry groups in the state. They donated $148,000 to Utah politicians. Industry groups worked to block several bills in recent years, including a proposal two years ago that would have capped loans in Utah at a still-high 100 percent annual interest. Utah has no caps on interest rates now. Some bills have passed that require more reporting by payday lenders and shortened periods that interest may accrue on loans.

Neff said, "I see why people take out the loans. But they are a debt trap. I'd like to see them stopped. ... But at least requiring court action to be in your county would help a little."

ldavidson@sltrib.com