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LegalGems, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 10289
Experience:  Research Attorney; Private Practice; Attorney Mentor; Mediator
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I received a call from a pay day loan from 2009 they are saying

Customer Question

I received a call from a pay day loan from 2009 they are saying I have to pay something or they will serve me with a summons at work. I have received no correspondence since they had an old address and I have not lived there for 10 years. What can I do
Submitted: 2 years ago.
Category: Consumer Protection Law
Expert:  LegalGems replied 2 years ago.
Hi!Customerhere. I'll do my best to assist you.I can only provide general information, so a follow up consult with a private lawyer is recommended.
The statute of limitations for old deb in Minnesota is 6 years pursuant to section 541.05; as such, if the account had no activity since the first half of 2009, the relevant time period would have run.
If last activity was in the latter part of the year, it would be within the statute of limitation time frame, and the creditor can sue in court, provided the amount at issue is less than $15,000:
If the debt is valid, then they can seek a judgment; if the defendant fails to show after proper service, the court will enter a default judgment, because they will assume the defendant will not contest it (this is common, so it is important to appear to present any defenses).
The plaintiff has the burden of proof in establishing the debt so if the plaintiff cannot prove the underlying debt the court will not rule in their favor.
If the consumer knows the debt is valid and is not contesting it, many prefer to negotiate the sum owing, as it often can be reduced as much as 50% (although it depends on the lender's policy). Also a judgment can be very damaging to one's credit score, so most people prefer to negotiate.
If a reduced settlement is reached, the consumer should be aware that the creditor will issue a 1099c, so that any "forgiven" amount will be written off on the creditor's taxes, and chargeable as income to the consumer.
please let me know if you have any questions on the above. If you found the above information useful, kindly rate positively so the site credits me for assisting you this evening. Thank you and take care.
Expert:  LegalGems replied 2 years ago.
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