If I am being sued from a payday loan company but I don’t have the money they are asking for, what can I do?

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If I am being sued from a payday loan company but I don’t have the money they are asking for, what can I do?

I took out 2 loans; I don’t have the money for the initial loan, plus the interest and attorney’s fees and court costs. I don’ t know what to do. I am so worried and I am a single mom. Can I go to jail? Will they start taking all my money I am already behind on everything?

Asked on April 25, 2012 under Bankruptcy Law, Texas

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You won't go to jail.

It would be advisable to file bankruptcy.  Chapter 7 bankruptcy is straight liquidation which eliminates your debts.  Filing bankruptcy will also stop a wage garnishment.  You will need to list all of your creditors on the bankruptcy schedules (forms).  Your bankruptcy is effective immediately upon being filed with the court.  It is important to list all of your creditors because the bankruptcy court sends a notice to the creditors you have listed that you have filed bankruptcy.


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