What To Expect If A Payday Loan Company Is Suing You

Can I Be Sued For Not Paying A Payday Loan

One of the most common questions is from consumers who may have defaulted on a payday loan. Often, these consumers receive calls and letters from companies claiming to be direct payday lenders and threatening to sue them. These consumers are scared and confused because they are threatened with legal action and harassment. However, many of them have done nothing wrong! In a recent blog post, we explained how to determine if your past due cash advance is legitimate and how to handle the process from there.

A payday loan company can sue you and take you to court if you default.

Are you being sued or served papers by a company claiming to represent one of the large direct payday lenders? Unfortunately, many bill collectors and scam artists call people who only inquired about a payday loan in the past. They aim to scare you into paying them money for a debt you don’t even owe!

How do I know if a payday lender can sue me?

First, you’ll want to know whether you’re being sued, and that starts with understanding your state’s payday loan regulations. How were you informed of a potential lawsuit regarding a past due payday loan? Did you receive a certified letter from a law firm saying they are taking you to court for a specific bad credit payday loan or cash advance? Or did a bill collector tell you over the phone that you were “going to be sued?”

Bill collectors often harass you and use scare tactics to get you to pay for an uncollected payday loan. Indeed, you want to take note of the bill collector’s threat of a lawsuit, but that’s usually where it ends unless you receive a certified letter from a law firm detailing the lawsuit you are not being sued.

Be sure it’s a licensed lender that’s threatening to sue you

First, confirm that a legitimate direct payday lender is suing you. Or is the company offering tribal loans from a direct lender? Applicants in the US need to ask a few critical questions to determine whether the debt is valid and whether the lender has a legitimate right to sue them for a past-due loan.

Assuming your debt is valid, you should first check the statutes of limitations to see if your lender is still within the timeframe of being able to sue you. Remember, statute of Limitations time frames vary by state. For example, in Delaware, you have three years; in Indiana, you have ten years until the time expires! If the time in your respective state has lapsed, the creditor cannot sue you to recoup the cash advance you took out.

Direct lenders and bill collectors have limited time to sue debtors for nonpayment of direct payday loans and run out of collection options if the statutes have elapsed.

Payday Loan Companies Can Take You To Court – But They Prefer Not To

If the debt is valid and the Statute of Limitations has not lapsed, you’ll want to do all you can to prevent this from going to court. That’s because your lender still has the right to collect on the debt, and they have multiple ways to get their money. Contact the original payday lender directly and try to negotiate a settlement. Many companies that offer direct payday loans online will want to work with you. Short term payday lenders will do all they can to avoid a costly and lengthy court procedure. They would rather have the money upfront than wait years, even if they have a judgment to collect on the debt.

What To Do If Your Payday Lender Has Sued You

If a payday loan company is suing you, take the lawsuit seriously and respond appropriately. Contact them to see if you can work out a settlement or avoid a costly legal case. Remember to be cordial and keep in mind that both parties should avoid a legal remedy. So, offer to work with your lender on an alternative that lets you either get back on track with payments or repay your loan through a settlement.

Touch on the hardships this debt has caused you and force the lender to provide as much detail and documents as possible. If you’re still struggling after all of this, contact a local consumer protection agency or an attorney specializing in debt relief for more help.

Do all you can to settle this debt before your court date and ask for free legal assistance if necessary!