Small claims on payday loan

[Lesa13]

Hi everyone -

One year down on my chapter 13!

New problem. I STUPIDLY and yes, I knew better, but couldn't help it (it was Christmas) - got a payday loan from a local guy who does them. Not a national service or anything. Unfortunately, I defaulted on it and while I paid some of it back, he would not let me do a payment arrangement for the rest. It was for less than $250. He has now filed a small claims case against me - just got served with it today with a court date of October 3.

Since I am in BK and wasn't supposed to do a payday loan in the first place (no new debt), I am not sure what to do. I don't particularly want to use BK as a defense and don't think I can or should.

I do owe the guy the money - not contesting that. Should I not appear and let him get a default judgment (although the amount he is claiming now is close to $500, so don't know where that came from...) and then let him garnish me or ?? If he garnishes me, will it be for the full amount at once or payments?

Any suggestions appreciated!

Lesa in Missouri

[Rob-NC]

I dont know the best way to answer that question, but I do know that I sure as HE** wouldnt pull a "no show" for court. By showing up in court you at least allow the court to see that you are serious about what is being served against you, you will also be able to explain that you have attempted to make arrangements with the person in attempts to settle the debt.

other people in the forum have better advice than me, but my opinion is....BE IN COURT when you are supposed to be!

[SinkingFast]

Don't know where he's getting a $500 figure for Small Claims Court either.

Especially if you've already paid back a portion of the debt and owe less than $250.

Typically, in Small Claims, plaintiffs only win the amount of the claim plus costs. Many times, the costs to file in Small Claims Court is $100 or less. Our SC Court here charges $75 to file a claim.

So even with costs, your Creditor may be adding in interest. Or, he may have asked for a Jury to hear the case, if your SC Court allows for that. Jurors cost on a per Juror basis. Some SC Courts allow for 6. Some allow for a full 12 person Jury.

Small Claims is generally very informal. You both stand in front of the Judge and tell your sides of the story.

As Rob said, don't be a "No Show". That would result in a Default Judgement award for the Plaintiff.

Document, as best you can, the amount of the original debt, the payments you've made, and when you attempted to arrange a payment plan with the Creditor. You may get out of there owing the $250 plus the Creditor's costs to file the complaint.

Maybe this Creditor has pulled this stunt before. Could be the Court knows him and doesn't like him. The Judge may know he's a rip-off artist in the making. You show up telling your side of the story, the Judge could be sympathetic. You might get out of there being allowed to pay the amount due in a Court ordered payment plan.

[davids]

court costs.

Hi everyone -

One year down on my chapter 13!

New problem. I STUPIDLY and yes, I knew better, but couldn't help it (it was Christmas) - got a payday loan from a local guy who does them. Not a national service or anything. Unfortunately, I defaulted on it and while I paid some of it back, he would not let me do a payment arrangement for the rest. It was for less than $250. He has now filed a small claims case against me - just got served with it today with a court date of October 3.

Since I am in BK and wasn't supposed to do a payday loan in the first place (no new debt), I am not sure what to do. I don't particularly want to use BK as a defense and don't think I can or should.

I do owe the guy the money - not contesting that. Should I not appear and let him get a default judgment (although the amount he is claiming now is close to $500, so don't know where that came from...) and then let him garnish me or ?? If he garnishes me, will it be for the full amount at once or payments?

Any suggestions appreciated!

Lesa in Missouri

$250 plus court costs, etc, comes to around $500...
and he is probably inflated it just a little for himself...

pay the man back, prove to the court you paid him back,
and its over, if you end up in court anyway, show them
you have already paid him back, court dismissed...

[FinancialAdviso]

$500 for an original loan of $250 really isn't out of line. If I read your post correctly, you took out the loan before Christmas or around Christmas, so the loan is about 9 months old. Every time you don't pay the full amount, the amount you still owe has fees added to it. The longer you don't pay, the more you end up owing.

I have no doubt that you've paid the original amount of the loan many times over, but the laws for these places don't read that way. Even if you had paid it back in full on time, you would have paid significant "interest". In the case of payday loans, you're not really paying interest in the same way you pay interest on car loans, personal loans, or mortgages. Payday lenders charge "fees" because the loans are seen as very short-term.