I borrowed 700.00 from American Web Loan (PAyday Loans). They told me they would draft 200.00 biweekly until paid off. They didn't tell me it doesn't apply towards the principal. So far I have paid 2400.00. They said either I pay 1000.00 in one lump sum or they will continue to draft may payments until the end of August 2013. A friend researched and told me they are illegal in the state of CA. If I close my account ant stop paying can they enter a judgment against me, me home, credit, or garnish my wages. Help, what are my rights?
Also, when I looked to check paperwork its nolonger availiable on the online account. Which they say is the only way to see them.
Lawsuit / Dispute Attorney
I think at this point you should send them a letter, by US Certified Mail, Return Receipt requested, asking them for a copy of the contract which is no longer on line, a copy of your payment history, a copy of the interest rate disclosures, and the payoff balance and a regular address where payments can be sent. Also, put in your letter that you revoke permission to take funds from your account and they must stop taking the funds immediately. If they take money after they receive the letter, then you need to advise your bank that you have revoked permission and make a written stop with your bank to prevent any more funds from being taken. If they continue to take the funds after you withdrew permission, then they are violating the law for electronic transactions.
If they sue you, the documents they send you in response to your letter will be useful to show the court how much you have paid and that the interest rate they charged you was excessive and either illegal or should not be enforced as unconscionable. You should retain a lawyer for this, even though it does not seem like a large balance, because they will hire experienced debt collection lawyers who know ways to get the judge to give them a judgment for the full balance, if they are not dealing with an experienced debt collection defense attorney. They cannot garnish your wages until they get a judgment, which requires them to file a debt collection lawsuit and serve you with it. You must then act promptly to safeguard your rights to challenge the lawsuit. As I suggested, you would be better off with your own lawyer to challenge the case then to DIY this yourself.
Robert Stempler (please see DISCLAIMER below)
NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as Avvo.com, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to www.StopCollectionLawsuits.com and submit a free eCase Review. The result portrayed for a client was dependent on the facts of that case. Results will differ if based on different facts. The Firm and Mr. Stempler are a debt relief agency. The Firm and Mr. Stempler help people file for bankruptcy relief under the Bankruptcy Code.
If you use an atty like Mr. Stempler the "bad guy" should end up paying most if not all of your atty fees. It is my understanding that loans for less than $2,500.00 have a maximum interest rate in CA at around 36% so this $2,400+ seems highly irregular.