Here are your options the realest ones!
Option 1 ( if you can't afford hole 10k )
I do practice law but in europe and my main line is criminal law but.
guys already told you that this debt will be sold to some agency that will try to collect money from you, but before that even happens here is what you can do.
Talk to Paypal, wait for their call and explain that you cannot pay and that's it, then negotiate but be careful since they will be recording phone calls, so don't lie nor don't play smart. Maybe you can talk this down to 5-6k and if so then pay them, you can also stretch the payment schedule like for a year, divide so you can pay some amount every month.
If they deny your offer, let them sell this to an agency, either they will directly sue you or will try to negotiate, anyways 5-6k after you explain should be decent amount for both you parties.
If you go to court with this case, whoever tells you whatever you will lose this case 99.99%, because as you mentioned everything is under your name so no need to talk bullshit or even think so, you will need lawyer and etc.
OPTION 2
Just give paypal their money, because it's THEIR MONEY.
OPTION 3
Negotiate to split payments for example every month.
Now if you will play gangster and this is texas baby.
1. If Paypal decides that you scammed them for 10k they can also take this matter to authorities and you will still need couple of grand for a lawyer in best case scenario. ( most likely this will not happen though )
2. Believe me whatever law that you read or whatever research you did, I don't need to look in codes of Texas to tell you, that hustle and problems you will get for this 10k will not be worth, like it or not they will come after you assets and they will bother you a lot, especially when business was under your name not LLC.
If you can afford to pay, save some trouble and just pay them. 10k is not small amount of cash.
Wtf guys, it's 10k not 100-500$ when they simply don't bother to proceed with law suits, because resource they have to put is not simply worth of it, who ever is telling him to just forget it, would you be doing the same or would you advice this to someone close to you?! Besides he is in US, so he is not going to be that hard to find.
I recently had a case where my client didn't sign a document that would indicate whatever assets he had and this came from collective agency. It turned into criminal case real fast, eventually had to talk to prosecutors and they dropped charges, just because it was his first time and explained it as "misunderstanding" between parties, but some are not that lucky.
Believe me you guys have no clue how technical this things can be, so do not advice him to just walk it off.
