Defaulted PayDay Loan

QUESTION: Can I be sued in the Texas for a defaulted online payday loan?

I taken out a few payday loans online and pretty much got in over my head paying them back ! Can I be sued in Texas?

ANSWER: Most payday lenders do not sue in Texas. Having said that, they are certainly entitled to sue you if you defaulted on a loan.

I would be curious to know who is threatening the lawsuit and whether they are a “usual suspect” – – the kind of payday lender that actually does file suit in Texas. If they are not customarily in court, then their threat is illegal, and possibly a violation of either the Texas Debt Collection Act and/or the Federal Fair Debt Collection Practices Act. The collection industry for payday lenders is infamous for being abusive. I would suggest you keep track of all collection phone calls and keep all of the collection letters.

If the threat to sue is in writing, I would suggest you forward a copy to a consumer rights attorney. If the threat to sue is made verbally, you might still want to talk to an experienced consumer rights attorney who can do a bit of research and find out whether this collector is blowing smoke, or not.

Finally, you might want to have a look at your credit bureau reports through (That is where you can get your credit reports for free.)

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Not Showing Up To A Civil Suit Court Appearance

QUESTION: What would happen if I do not show up to a hearing concerning credit card breach of contract?

I am a house wife who made regular payments until my husband stopped giving me any money to pay on credit card and anything else at all . I have no income at all to work with and had to move out of our house and in with family just to stay alive due to him canceling my medical insurance and not buying food for the house now I am being sued.

ANSWER: The collection industry can be ruthless. They don’t care what your circumstances: if they can legally collect against you, they will.

Depending on all of the circumstances surrounding your finances, you may want to consider bankruptcy. Bankruptcy will stop the lawsuit against you dead in its tracks.

Otherwise, I suggest you do everything possible to defend yourself. If you/family can afford to hire a consumer rights attorney, that’s your best bet. The creditor/plaintiff is likely to get a judgment against you by default. Even if you cannot afford to pay for the judgment now, the judgment-creditors are patient: they will wait until you find employment, re-marry, gain an inheritance, or win the lottery. Meanwhile, a judgment on your credit reports can be devastating. You should do everything you can to avoid having a judgment entered against you.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Getting Sued Over A Debt Already Paid

QUESTION: A collection agency says they’re going to sue me over a debt I already paid, I don’t know what to do.

I have a few emails of paid in full, but a couple of the companies didn’t send me anything, and when I tried to call them it says it’s no longer a working number.

ANSWER: First of all, I would suggest that you pull a copy of your credit bureau reports. You may obtain a free copy through www. It is the only website that the Federal Trade Commission has approved of for a free credit report. You might find useful information on that website. Also, do you have old bank statements or cancelled checks to prove you paid?

If a third party debt collector is threatening to sue you on a debt that has been paid (whether you can prove it right now, OR NOT) then it seems your rights have been violated. I would suggest you contact a consumer rights attorney who has experience going after abusive debt collectors. They will probably want to look up this debt collector that is threatening to sue you. Specifically, they will want to see if this debt buyer is a common litigator; and also, they will want to find out if this debt collector has a surety bond on file with the Texas Secretary of State. If they do not, then this whole thing sounds like a scam- an illegal scam.

Keep in mind that the federal Fair Debt Collection Practices Act allows you to collect a statutory award, other damages, as well as your attorney fees. That is the reason why many consumer rights attorneys do not charge clients up front for their time. They can get paid for by the defendants. I strongly suggest you get your payment history together and call a consumer rights attorney licensed in Texas.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Sued By A Junk Debt Collector

QUESTION: Sued by a junk debt collector for $1500 on unsecured CC debt from 2011.  This clearly seems to be an attempt to get a default judgment by an attorney who expects that I will not answer. I’ll pay $250 to any licensed TX attorney who will answer on my behalf in the expectation that the junk debt collector will abandon hope due to the presence of an attorney and the weak claim. I seem to be one of many thousands of people who received court docs today judging by the quality of the summons. I’ve been doing research and this seems very easy to defeat. I’m wondering whether or not I should even bother to research how to defeat this when there might be an attorney willing to accept $250 to do it for me.

Last payment on the card was March 19th, 2011. I was served by someone in a $200 car on March 26th, 2015. The lawyer lives 300 miles away. The summons is very sketchy looking.

ANSWER: I don’t know who sued you and who their lawyers are. The debt buyer industry has been empowered over the last 2-3 years for a whole host of reasons. Yes, they may simply be interested in obtaining a default judgment. On the other hand, I have had many debt buyers – the likes of Midland Funding, Portfolio Recovery Associates, and many others up put a fight, even for very low balances. Their attorneys are in court with huge dockets all set for the same day: it is unlikely they would be coming to court for your case only. Plus, if this is a lawsuit in the Justice of the Peace court system, then the Texas Rules of Civil Procedure are severely relaxed, making it much easier to obtain a judgment.

You seem to be a terrific negotiator, considering your online bidding efforts here. Any lawyer that makes an appearance for you in an answer is on the hook for the entire case, not just the answer. An attorney who values their law license and their reputation will not get hired for the limited purpose of filing an answer and then asking the court to withdraw from your case. (I may be wrong, of course.)

If you fail to answer the lawsuit, or if you appear – pro se or through an attorney – and lose the case, the judgment will likely be significantly higher than $1,500.00, including interest, fees, court costs and attorney fees. The damage to your credit report, as well as the risk of post-judgment collection would be reasons for you to hire an experienced attorney.


Debt Collectors and Their Scare Tactics

Client:                They said they could garnish my account!

Attorney:            Your only income is social security, and social security is protected from garnishment.

Client:                 They also said they would put a lien on my home.

Attorney:            Is this the only home you own?

Client:                 Yes.

Attorney:            They can’t do that! In Texas, your homestead is protected.  This is the kind of thing they can be sued over! 

 There are just certain things that debt collectors cannot say! Period.  If they do, they’re violating a consumer’s federal rights. Here are some big “no-no’s” when it comes to debt collection pulled from the Federal Fair Debt Collection Practices Act.

  • They cannot use or threaten the use of violence or other criminal means to harm the physical person, reputation, or property of any person.
  • They cannot use obscene or profane language for which the natural consequence is to abuse the hearer or reader.
  • They cannot publish a list of consumers who allegedly refuse to pay debts.
  • They cannot advertise the sale of any debt in order to coerce payment of the debt.
  • They cannot repeatedly call with an intent to annoy, abuse, or harass any person at the called number.
  • They cannot call without meaningful disclosure of their identity.
  • They cannot falsely represent or imply that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, this includes     the use of any badge, uniform or fax thereof. They cannot falsely represent: a) the character, amount or legal status of any debt; or b) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.
  • They cannot falsely represent themselves as attorneys.
  • They cannot represent or imply that non-payment of a debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person.
  • They cannot falsely represent or imply that the consumer has committed any crime.

There are more things they CANNOT do.  For more information on the Fair Debt Collection Practices Act, go to:


This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.


Holiday Money Blues

We all feel a little blue during the holidays. Mostly, it is because of all the expenses involved. Whether it be Christmas or Hannukah, there are gifts to be purchased and feasts or parties to be arranged. Anytime a debt collector calls is a bad time. During the holdiays though, it could be considered a very bad time. Here are a few guidelines regarding when a debt collector can and cannot call you. 1. They can only call between 8 a.m. and 9 p.m., local time. 2. They can call you at work [IF, and only IF, they do not know that they cannot]3. They can call you on weekends and holidays. Fortunatley, many businesses are closed on holidays, including debt collection agencies. This makes it much less likely for you to receive a phone call during those times. The Fair Debt Collection Practices Act does not specifically say that a debt collector cannot call you on a holiday. However, it does prohibit calls at “any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.” 15 U.S.C. 1692 c(a)(1). So, if you do happen to receive a call during the holidays [or even the weekend], make sure to say “this is not a good time.”

Don’t let collectors ruin your holiday!

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.

Recording Conversations with Debt Collectors

It is important to know that in some states you have a right to record conversations.

The laws differ from state to state.  If you do not reside in Texas, then you should do some research to find out what the law are in your state.  In Texas though, only one party needs to be aware of the recording.  Even keeping that in mind when recording a conversation, one must also consider the recording laws for the sate where the debt collector is calling from.  If THEY are in a “two-party” state, you must disclose that you are recording them.   In a small number of two-party states, both parties need to actually consent to the recording.

Why is this important?

Sometimes, it is the only way for consumers to prove that their rights have been violated by rogue bill collectors!

All that being said, technology has come a long way.  There is no longer a need to purchase a digital recorder or use your old cassette tape recorder.  There is an Android SmartPhone application called AllCallRecorder that you can download and set to record conversations from certain numbers automatically.  It’s great, it will record the entire conversation.  Iphone users have similar applications available to them, FourTrack and Recorder 10 are two of them.

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.

Collectors calling you repeatedly can be harassment.

If a debt-collector calls you at 7 a.m., 10 a.m., 2 p.m., 5 p.m. and at 9 p.m. on the same day, and more so if this happens daily, it may constitute harassment in the eyes of the Federal law.

It may be a violation of the FDCPA.  By law, debt collectors are only allowed to call you between the hours of 8 a.m. and 9 p.m.  Calling before or after those hours is a violation.  Also, calling repeatedly, is seen as an intent to harrass.  Keep a call log, write down every time you receive a phone call from the collector and what time it came in.  You can download a sample call log by visiting:   If you are receiving [what you think are] harrassing phone calls, you should contact a local consumer attorney [which you can find at] and find out what you should do.

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.

Arrest Threats? Because you defaulted on that auto loan years back?

The statute of limitations on most debt is 4 years after the date of default under Texas law.  When attempting to calculate this date, one would go back to the date of last payment on the account, count 30 days and that would be the default date.  The original creditor or any third-party to whom they may have sold the account has 4 years from the date of default to sue on the debt.  This is the first thing that you must consider when being contacted on an old debt.

If you do not pay, the creditor or debt buyer can file a civil lawsuit against you.  If the debt is past the 4 year statute of limitations, you might be able to avoid a judgment.

Unfortunately, some consumers are unable to pay.  The creditor or bill collector might use harsh collection tactics to try to collect, especially if the debt is too old for a legitimate lawsuit.

Collector:  Ma’am, you have owed this debt for 4 years now,  I realize your husband is away working and you are alone with the kids, but if you don’t pay this debt… I’ll have you arrested, your children will go into foster care and you’ll never see them again, do you want that to happen?

^ This actually happened to a lady in Houston, Texas.  This is a serious violation of the FDCPA and the collection agency that was responsible for this ending up having to pay this woman and her attorney for all the mental and emotional anguish they caused her.

If a debt collector has been threating arrest due to your non-payment of a debt, contact a consumer attorney at .

Did you know you can ask a debt collection company to stop calling you?

The Federal Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request that a debt collector stop any and all communications with them regarding a purported debt, so long as the request is made in writing.

All you have to do is send a letter, by FAX and/or CERTIFIED MAIL.  The body of the letter should simply say:

“Please stop contacting me on the purported debt that I owe with Bank Name, account #__________________.”

Oftentimes, consumers write long and complicated letters to the collection industry.  In order to get your point across, keep your letter short.  A request for a collection agency to stop contacting you is quite different from a dispute letter.  If you want the bill collectors to stop calling you, that is all you need to write in your letter to them.

Make sure to reference the account and account/reference number in your letter.  Keep a copy of the letter along with your fax transmission/confirmation page or certified mail receipt for your records.

If the collection agency continues to contact you after you have proof of their receipt of this letter, they may have violated the law.

But beware:  in some states like Texas, the debt buyer might stop contacting you, but they are not prevented from suing you, unless the debt is beyond the statute of limitations.

You should also note that original creditors (as opposed to third party bill collectors) are NOT obligated to stop contacting you under Texas or federal law.

You can find a consumer attorney at .