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JimLawyer, Solicitor
Category: Bankruptcy Law
Satisfied Customers: 9264
Experience:  Senior Associate Solicitor
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What are my rights when my PayPal balance has gone into

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What are my rights when my PayPal balance has gone into negative. Will. It affect my credit rating

Hello, I’m Jim, a dual-qualified lawyer (UK & Republic of Ireland) and happy to help you today.

No, it will not be affected but if it remains unpaid they will pass it to debt collectors. If still not paid they will issue a small claim and only if the court judgment is then unpaid for 30 days will the credit rating be affected. But having a negative balance with PayPal does not affect your credit records (it is not a credit facility).

I hope this helps? If I have answered the question would you kindly leave me a 5 star rating (at the top of your screen), any follow up questions are welcomed.

Many thanks,


Customer: replied 15 days ago.
Thanks for that info. I have read alot of places online that although they will send for debt collectors they aren't able to do anything more with it and can only stop you from using PayPal. Do PayPal have the full right to go to court with a claim to get the negative balance back? And if so is there anyway I can defend against it

They can do yes as you owe them money. It can happen occasionally - the debt collectors have no powers as such, they are not bailiffs. You could defend it on the basis you did not sign up to an overdraft facility. If they did sue then it would be 6-12 months from now where they get a court judgment (and you then get 14 days to pay that)

Customer: replied 15 days ago.
if I am unable to fight my case and they win. Do I have to only payback the negative balance or is there any extra amount that I will also need to pay on top of my negative balance?

it's be the negative balance plus court fee (which depends on the size of their claim - see page 5 here:, plus interest at 8%, plus a hearing fee if there has to be a hearing (page 7).

Customer: replied 15 days ago.
Thanks I understand the charges now. If I pay let's say 1 day before the court judgement will that then save me from all the extra expenses? Or as soon as they file to sue me I have to pay extra fees regardless?
And is there a case where someone has defended and win on the basis of not signing up for an over draft? Thanks

Hi, if you let it get to the stage they issue a claim in court, you are then liable to pay that court fee if they win. I am not familiar with any other case like that. It's possible the overdraft is in PayPal's terms and conditions. But you could argue they misled you, so breached your consumer rights (under the Consumer Rights Act 2015).

Customer: replied 15 days ago.
But if they issue a claim and I pay before the courts had a say will it save me from the 8% interest? Or any other fees.
Are there any other cases in general of paypal taking people to claims court for negative balance?
You've helped alot! Thank you

No, as the 8% is claimable from the date the debt becomes due, so they can charge interest from now if they choose to.

I'm unsure of other cases - most are small claims so ones under £10,000 and as such these cases are generally not reported. Perhaps another expert may have the details. If you post another question about paypal case law, hopefully someone else will come along.

But I think you have an argument to defend the case anyway.

Here is some useful commentary which talks about unfair contract terms and paypal's negative balance situation :

Customer: replied 15 days ago.
Thanks so much you've been the biggest help so far. Just a last thing so you haven't found any cases so far of paypal negative balance being taken to court? But you think it maybe due to them not being reported as oppose to there not being any?And if there are any cases like that where do I have to look or ask to find it.
Again thanks alot

I haven't seen any reporting ones online, no. That's not to say none have gone through the courts though. Generally the larger cases get reported, not ones for a few hundred pounds in dispute.

Just a Google search should throw up some results, e.g. "paypal negative balance small claims", or that sort of search criteria

Customer: replied 15 days ago.
I have googled a lot and can't find anyone who's actually being taken to court. Just a lot of comments and advice that PayPal can take you to court. Any government or EU sites where I can search for cases?

Hi, i'm unsure of EU sites, I am a UK lawyer (and republic of ireland too). Perhaps a search?

JimLawyer and other Bankruptcy Law Specialists are ready to help you
Customer: replied 15 days ago.
I have tried Google but can't seem to find anything for some reason. You've been such a great help Jim. Keep doing the amazing work!

Hi, I wouldn't worry, you could also try the Financial Conduct Authority on 0800(###) ###-####- they may know of some cases (they regulate financial institutions)

Thanks very much for the feedback - much appreciated!

Customer: replied 15 days ago.
Thanks for the number Jim. Keep up the amazing work!

My pleasure, have a good day