My spouse acquired an online payday loan that has now tripled the cost they initially told us it was going to be. They claim they are a sovereign nation. What difference does it make? Does it mean that they don’t need to follow the state payday loan laws? Could they really garnish my spouse’s wages?

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You should find out or remember what was the original creditor. If the original creditor is not that 'sovereign nation' - then this means that your debt was bought by a 'debt buyer'collector' at a smaller price.

I believe you should treat them like a regular 'debt collector'. You have to know your rights - by reading 'Fair Debt Collection Practices Act'. You must ask for 'validation of debt' which means they have to provide you with a contract in which you agreed to pay the amount to them, and your signature to be on that contract.  Ask for their 'proof of ownership' of the debt. If you look online, you will find more information re: debt collection and debtors. If the loan is old, then you must find what is the 'statute of limitation' in your state, for debt collectors to sue you. It might be between 3-6 years, after which they cannot sue you. You might have right now achieved the years for statute of limitation, check. Do not pay until you have all the proof that the 'sovereign nation' has the true ownership of debt.

Do NOT deny totally about the loan, if you go to court. If you deny, you loose the case. Just say the followings:

" I do NOT deny that i might have a loan, but I do not remember, and i do not have enough information or knowledge to form an opinion if the debt collector's claim is true. I need more proof".

Also, before going to court, you need to send them a 'Request of Production' - which are documentation and contract that show that you agreed to pay them the loan. If they cannot provide this, then you win the case.           Try to find more information online about all this matter. Good luck!            

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Well, your spouse did what he/she should not have done. He/she procured a payday loan from an American Indian tribe and who are not required to follow state laws for payday lending, rather they have their own laws somewhat similar to that of state laws. And yes, if they manage to get a judgment, they would for sure garnish your spouse’s wages.


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