Payday and short-term loans
You are being sued over a payday or short-term loan
Short-term and payday lawsuits usually involve a small original loan and a much larger claimed balance, because fees compound each time the loan is renewed. These cases are often filed by online lenders or by companies that bought the loan, and the loan agreement itself is frequently the document that never gets produced.
Which kit fits: If the lender is suing in its own name, the Original Creditor Kit fits. If a purchaser or collection company is the plaintiff, use the Debt Buyer Kit.
The deadline is the only thing that is urgent today
Your summons states how many days you have to file a written response, generally 14 to 35 days from the date you were served. If that date passes without a filing, the plaintiff can ask the clerk for a default judgment and win without producing any document at all. Everything on this page comes after your Answer is filed.
Which of these apply depends entirely on your state and your paperwork. Read the agreement and your state's rules before deciding what to raise.
Where their paperwork usually falls short
- No signed or electronically accepted loan agreement for the specific loan being sued on
- A balance made mostly of rollover and renewal fees with no principal breakdown
- No record of which payments were applied to principal and which to fees
- Unclear whether the lender was licensed to lend in your state at the time
- An out-of-state or tribal lender suing with no explanation of which law it says applies
Defenses commonly raised in these cases
- Amount claimed is unverified
- No proof of a valid loan agreement
- Fees or interest exceed what state law allows
- Lender was not licensed in the state
- Statute of limitations
Raise the defenses that match your facts. The toolkit explains each one and when it applies before you select it.
What makes this kind of case different
Separate principal from fees
Ask for a payment history showing the amount originally advanced, every payment you made, and how each payment was allocated. Small-dollar loans frequently show a claimed balance several times the money you actually received.
State caps exist and they vary a lot
States differ widely on what rate and fees a short-term lender may charge, and some prohibit these loans entirely. Your state's regulator publishes its rules and a list of licensed lenders — checking whether this lender appears there is a reasonable question to raise.
Rollovers stack
Each renewal typically adds a new fee to the same underlying loan. The complaint may describe one loan while the history shows a chain of renewals. The renewal record is the document that explains how the balance grew.
Arbitration clauses and ACH authorizations
These agreements very often contain an arbitration clause, and they usually contain an authorization for automatic withdrawals from your bank account. Both are worth reading closely — an arbitration clause can change where the dispute is heard, and an ACH authorization can generally be revoked with your bank in writing.
Your next four steps
- 1Write the date you were served on the first page of the papers and calculate your deadline.
- 2File a written Answer with the clerk of the court named on the summons and mail a copy to the plaintiff's attorney with a certificate of service.
- 3Pull your bank records to document what was advanced to you and every payment or withdrawal taken.
- 4Serve discovery asking for the signed loan agreement, the full payment and renewal history, and the lender's licensing in your state.
Sued over a different kind of debt?
Educational information and document preparation only. Make Them Prove It is not a law firm and does not give legal advice. Rules and deadlines differ by state and by court, so confirm them with your court clerk or a licensed attorney in your state.