I have about $110k in debt ($22k on two cars, $88k in various credit card/unsecured debt). Some of my creditors are online short-term/payday loans.
I have heard that such loans may or may not be illegal, because the creditors are not licensed in my state (Texas).
If a lender is not licensed in my state, what am I obligated to pay back? Just the principal, or whatever I can settle for?
I think what you really have here is a fantastic academic exercise in being right and reality-wrong at the same time.
Legally and technically you could certainly stand your ground if the lender is not licensed in Texas. However, you’d need to take a deeper dive into who the lender is. For example, is it one of the many trial lenders that has made the claim they are exempt from federal laws. Those arguments seem to fail when pushed.
So when it comes to determining the legal quality of the lender that you borrowed from, there is no shortcut totaling to a lawyer licensed in Texas that deals with those issues. One place to find such an attorney is here.
After a review by a Texas licensed attorney, if the lender is in fact not authorized to conduct business in the state then you would have an argument about repaying the loan. But that very same attorney can write to the lender and represent your position. It will go a lot further than you just digging in your heals and saying you won’t pay or don’t have to pay.
You ask about settling the debt. You can do that but why if you go through the trouble to determine the loan is not enforceable in Texas?
The only advantage would be if the loan appears on your credit report and you want it gone but the best way to do that with the least negative impact would be to pay it back in full and avoid and deragatory reporting.