My husband had a payday loan which we carried over for a few months. Due to health issues he was unemployed and put on long term diability we attempted to make small payments to laon but it took too long for income to begin so we had to default now credit bureau collections are threatening us with a court summons unless debt paid in full can they do this?

Yes they can do this. You defaulted on a loan so you will have to face the consequences unfortunately. They don't care why you can't pay, just that you didn't pay. Perhaps you can make arrangements and pay them by the month.

The interest rate on payday loans is almost l00% but new laws in Canada are reigning them in so they can't charge that much. You may have some leeway with the court because of this.

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A credit bureau just reports the status of credit accounts and other items that affect your risk as a borrower. So no, they can't sue. But the lender or their designated collection agency can.