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 that claim to be direct payday lenders who want 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 will often call on people who only inquired about taking out 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?
You’ll first want to know if you’re being sued or not and that starts with understanding the payday loan regulations in your state. 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?”
Quite often bill collectors will harass you and use scare tactics as a way to get you to make a payment 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 direct payday loan company that’s threatening to sue you
First, confirm that you’re being sued by a legitimate direct payday lender. Or is the company offering tribal loans from a direct lender? Applicants in the US need to ask themselves a few critical questions to determine if the debt is valid and if 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 that the Statute of Limitation time frames vary depending on your 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 they 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. Contact the original direct payday lender and try to negotiate a settlement with them. 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 the power of a judgment to collect on the debt.
What To Do If Your Payday Lender Has Sued You
If you’re being sued by a payday loan company, taking the lawsuit seriously and responding appropriately is essential. You should first contact them to see if there’s a way to work out a settlement or avoid a costly legal case. Remember to be cordial and think about the fact that it’s better for both parties to avoid a legal remedy. So offer to work with your lender on an alternative where you can either get back on track with the payments or repay your loan with 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!