Pay day loan question - TX

I understand you cannot provide legal advice. Do you know what the laws are in TX for pay day loans? Can they sue civilly and/or criminally? I don't want to call them back before I know my rights.

Thank you.

Paula

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Feb 07, 2010

pay day loans lawsuits
by: Gerri

Paula,

Thanks for submitting your debt collection question on our Q&A page. It sounds like you are behind on a payday loan and worried about what they can do to you.

Payday loans are one of the most difficult types of consumer debts to handle, because their high interest rates mean they mushroom pretty quickly. And my experience has been that payday lenders and collectors are especially difficult to negotiate with.

Texas has some pretty strong consumer protection laws (such as a prohibition against wage garnishment for most types of consumer debts), and of course you are also protected by the Fair Debt Collection Practices Act.

As for being sued, however, creditors can generally sue you to collect a debt. If you are sued, you must be served with a summons that will tell you when you must appear in court. If you are afraid that will happen, it would be a good idea to get a free consultation with a bankruptcy attorney who can help you weigh your options.

I imagine it's pretty scary and stressful for you, and it might help to ease some of your fears if you can talk with someone who can answer your questions and explain your rights under federal and state laws.

I will add that it is not likely the collector can file criminal charges against you just because you can't pay your payday loan back. If the debt collector (or even the payday lender) made any statements to the effect that you could or would be criminally prosecuted, please be sure to talk with an attorney immediately. It very well may be an illegal threat.

Threats by debt collectors to sue you in general can be problematic. There has been a number of court cases where collectors were found to have broken the federal Fair Debt Collection Practices Act, or other consumer protection laws by threatening to take legal action they could not take or intend to take.

That's why we encourage you to make sure you use our Free Debt Collection Worksheet to take notes of your conversations with the debt collector.

And we strongly recommend you talk with a consumer law attorney with experience in debt collection cases. Find out how to get a FREE consultation with a consumer law attorney here.

It's not uncommon for consumers to learn that collectors have engaged in illegal collection tactics, and if you have a good case, the attorney may be willing to take it on a contingent fee basis, meaning you don't pay them unless you win your case.

Please let us know how this turns out for you OK?

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