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Can a payday loan company sue me if they are illegal in my state?

Goldsboro, NC |

I took out a payday loan online back in 2008, and failed to pay it back. I also found out that in my state they are illegal. I am now getting calls about them suing me. Can they sue if they are illegal in my state? If they can, what state laws to they have to follow, the ones in my state or theirs?

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Attorney answers 2


Almost certainly they can sue you. You borrowed money from them online, and when you did so, almost certainly you agreed to a set of contractual terms which included the obligation to pay them back. If you haven't paid them back, you've breached the contract. Probably the contract requires you to pay their reasonable attorney's fees incurred if they sue you. And almost certainly the contract specifies that the court has to apply the law of THEIR state when it decides the claim. So poke around and see if you can find the contractual terms to which you agreed when you borrowed the money. Chances are the earlier you pay, the less you'll have to pay.

Not legal advice as I don't practice law in North Carolina. It's just my analysis of the facts you present in light of general principles of law. If you need legal advice, please consult a lawyer who holds North Carolina licensure.

Good luck.


The AG's office has prosecuted many of these businesses. Give the consumer complaint division a call or check the website below. Best of Luck!

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