If the pdl is not licensed, your state prohibits pdls, they can not LEGALLY collect the debt. It is not considered a legal debt. Now, the idiots might turn you over to collections. Then once you're contacted by the collection agency, you can always send a debt validation letter. They can't validate an illegal debt. And if this is indeed an unlicensed/illegal pdl, they can't do squat legally. They're illegal. They're not going to "take you to court". That would actually be kind of funny! So they try to scare the money out of you. That's their way of getting people to pay. Now, I'm not saying they won't attempt to turn it over to collections. They might. Then you just slap the debt validation letter on the collection agency and slip a nice sentence in there stating that you're so sorry they are trying to collect on an illegal uncollectable debt.