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CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU
NOTE: NOTHING IN MY POSTS SHOULD BE CONSIDERED LEGAL ADVICE. I AM NOT A LAWYER, NOT AN ATTORNEY, JUST A GUY WHO USED A LOT OF INTERNET TO FIGHT AND WIN LAWSUITS. IF YOU ARE IN A SIMILAR SITUATION TAKE MY ADVICE TO A LAWYER FOR A PROFESSIONAL OPINION.

Also, this advice is for lawsuits/settlements with debt collectors, original creditors, and so on in regards to unsecured credit card debt. I cannot help you with foreclosures, car repos, or anything of that nature as I have no experience with those things.


Because of a lot of stupid college kid mistakes, I found myself deep in debt to multiple credit card companies without the means or ability to pay them back. Calling and talking to their customer service reps did little to nothing, and trying to use a debt consolidation service was out of the question, since they'd only lower my payments by about 10% and speed up the time I'd need to pay. I was left with 3 choices:

1) Ask family for a bailout
2) Quit school and work 2+ full-time jobs to hope to have enough to pay the debt back
3) Stop payments, walk away from the debt, and attempt to reconcile it once my money situation was resolved.

So I chose 3, and after about 3 months the phone calls and letters started rolling in about making payments, getting sent to the legal department, all that kind of stuff. When I did answer, I simply told them I couldn't pay right now, and that was that. A month later, they mostly stopped, and for a while I didn't really worry about it.

2 months after that, new companies began sending me letters and being more threatening, telling me about how my paycheck would be garnished, my bank accounts taken, and so on if I didn't pay NOW. Again, I mostly ignored these calls until I got a knock on my door from a process server. One of the debt collectors was suing me in small claims court for one of my college cards - something like $800, I forget. I had a month before court and I was mortified.

Despite that I did a little research on the web and figured out essentially what I needed to do to try and defend myself. I went to court that day to appear for the summons date - and when the lawyer saw me come up to the bench he told the judge they were dismissing the case. I didn't understand what exactly was going on, but while I was waiting to get my copies of the dismissal papers, it became more clear.

I was probably one of the nine or ten out of 200 cases heard that morning that actually showed up. Of those, I was only one of two that showed up to defend instead of admit to the debt asked for. Some of the lawyers were representing six or seven different plaintiffs and were just walking up, showing paperwork, noting the lack of a defendant and getting a default judgment for the amount asked. $1000, $7500, $13400, you name it. Each lawyer was probably walking away with six figures in judgments from their cases without a fight from the defendants.

When I asked the lawyer why he dropped the case, he said "I don't have time to fight you over this, I have 60 more cases today and then I need to go to the next county over to appear for 150 more by 1:30." Holy poo poo.

Since then, I have been sued eleven times by original creditors and the junk debt buyers who purchase these accounts from the original creditors. I have lost none of these cases, and have even been able to collect money from some of these plaintiffs and law firms because those companies generally do not follow the law in trying to collect debt from you. (Note: Due to most of these settlements being contingent on a non-disclosure agreement, I cannot get into specifics as to those I have sued/been sued by, nor the amounts I have collected. I will, however, say that these settlements have done nicely to help fund my pharmacy schooling.) My credit score has also gone up over 200 points as a result of my credit repair, at minimal cost.

I can help anyone who needs general advice on how to deal with creditors/owners of your unpaid debt, and what to do both before they begin legal action and after the lawsuit has begun. Questions I get from people I've helped before are below:

This is your debt, right? You loving scumbag. Pay what you owe and you don't have to go through this poo poo!

This is true! Generally, the debt/account in question was owed by me, and I do not have a problem paying what I'm owed to the person I owe. Debt collection, however, clouds those waters.

- The debt may be time-barred, also known as outside the Statute of Limitations (SOL.) This varies from state to state and contract to contract, but is generally 2-7 years after you stop paying the account. Once that time expires, any attempts to collect on that debt (especially legal action) is a violation of the Fair Debt Collection Practices Act (FDCPA.) One of my biggest settlements came from a creditor trying to sue me on a time-barred debt - under $100. I made nearly 100 times that in my settlement.

- The debt collector may have unfairly added fees and penalties to what you really owe. I've had cards with $300 limits show up as $2000+ balances due, $1000 limits be nearly $7000, and so on. Most of those added fees are arbitrarily added by the buyer of your debt without rhyme or reason. On that point:

- Most debt buyers buy debt in a package from the original creditor, usually at a rate of 3 to 10 cents on the dollar. If they cannot collect, it is usually sold to a secondary debt buyer for less than a penny on the dollar. Regardless of who buys your debt, they will try to get you to pay as much as they can. You'll get letters like "You owe us $5000, but as a special offer, we'll take a one-time payment of $3200 today to settle your account in full!" A nice 'discount' for you, but consider they likely paid between $40-500 for your papers.

- If you 'settle' with a debt buyer, you're usually not much better off in terms of your credit report. A 'settled in full' tradeline is barely better (sometimes not at all) than a non-paid tradeline, and usually such tradelines will stay on your report for a full seven years. On top of that, the scummier debt buyers will get you to agree on a settlement, take the money, update your account as settled for that amount in the credit reports - then sell the remainder of your debt to another junk debt buyer, who will hound you for that.

- Some collectors will talk to you about your moral obligation to pay the debt. You can judge your own morals, but I prefer not to consider the opinions of someone that gets a bonus check if I show them 'good morals.'


Ok, so I shouldn't just send them a check. How do I make sure they don't sue me?

Once you start getting the letters in the mail, you need to be proactive. Usually, if you don't respond to a collector within 30 days, they can assume the debt is valid and you lose a bunch of your rights. The first paperwork they send you a what's called a dunning letter. It basically states that they own your debt, this is what you owe, if you dispute the debt contact them within 30 days - pretty standard. Save all the paperwork you get - you may need it later, especially if they've made mistakes on them.

What you want to do first is send a debt verification (DV) letter. There are plenty you can copy and paste all around the internet and you can make it all fancy and legalese-ridden but it can be as simple as:

quote:

Dear rear end in a top hat Collection Agency:

I dispute that this debt is mine and demand you validate it by producing the contract, cardmemeber agreement and documentation showing you purchased this debt properly. Do not contact me by telephone about this debt, I will only discuss it in writing. You have 30 days to validate this debt, if you do not, remove it from my credit reports, do not contact me in any way about this debt again, and do not sell or give this debt to any other agency.

Send any correspondence to an agency or law firm Certified Mail, preferably with a return receipt attached. This lets you confirm, if necessary, that the letters were received. They won't do the same for you, but the extra dollar or 2 is worth it.

Once this is done, wait. Generally the collector won't verify, and then you win. If they don't verify but keep trying to collect, you win even more, because doing so violates the FDCPA and you can start collecting evidence for a lawsuit against them. If they do verify (and some do,) you may want to consider settling with them if you're not aggressively litigous.

Settle? But you said not to pay them!

And generally you shouldn't. But if they have all their ducks in a row and they've done things properly, you do owe the debt and you should settle. But do it in an advantageous way.

- No matter what, negotiate what's called a 'pay for delete.' What this means is you pay X amount of the debt, and the agency deletes the tradeline off all your credit reports. This will usually mean a 30-80 point jump on your credit report almost immediately. Some agencies will say pay for delete is illegal. It isn't. Generally they don't even delete it themselves, they will just not answer your request for the credit bureau to verify your debt with them, then off your report it goes. Usually you can get an agency to do a pay for delete if you pay about 40-60% of the balance due. Start at 10% and work your way up - I've had a $1500 card deleted for paying $200. If they won't delete, you don't pay. Again, getting a 'settled' tradeline is not worth paying for.

- Get the terms in writing, signed by someone with power at their agency, before you send them any money. They will go back on their word if you don't.

- Pay with a money order. Paying by check (or worse, over the phone by credit card) lets them know where you bank. Call me paranoid, but I'd rather not let them have that information.


How can they violate the FDCPA, and why do they do it if it's so bad for them?

Because most people don't know the law, and getting a few lawsuits they have to settle is small potatoes compared to the people who will pay in full if pushed enough. There are a ton of ways they violate, including calling too early/too late, calling when you've sent them a cease and desist order, using threatening language on the phone, claiming they can take your wages/bank account/etc, misrepresenting your rights, continuing to try to collect without verifying the debt... plenty of ways. If your state allows you to record calls without the other party's consent, you may wish to tape your conversations with the phone reps. One call I had the rep did 15 violations in a 20 minute call. In my state that call alone allows me to sue for $1000 per violation x treble damages + damages for pain and suffering/lost wages the violations cost me. I'm barred from talking further about it due to my NDA, but let me say they were happy to settle for far less than what I was threatening to sue for. :)

They're suing me! What should I do?

This post is long enough and I can go into that later, but the main thing you need to do is show up to every court date. If you don't show, the lawyer will enter a default judgment against you, and you lose. There's next to no downside to trying to defend yourself in court - the worst that can happen is you pay what you would have if you didn't show up at all. (I don't know if any states allow the winner to collect attorney's fees - check your state to see if they do! Mine doesn't, and neither do most states.)


Anyway, I think that's enough for now. If anyone is currently trying to get out of debt or repair their credit score, I can try to help. If you're in the middle of a lawsuit, I can try to help, so long as you understand that I'm not giving out legal advice. I can just tell stories, too, as long as they don't get too detailed in cases where I've got an NDA.

EDIT: I'm not sure if this should go in Biz/Fin instead, or just be kept in the Legal Megathread. If that's the case, I'll close the thread and move it to the proper place.

CubsWoo fucked around with this message at 09:13 on Nov 30, 2009

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Kaal
May 22, 2002

through thousands of posts in D&D over a decade, I now believe I know what I'm talking about. if I post forcefully and confidently, I can convince others that is true. no one sees through my facade.
Having good credit and generally being a Scrooge when it comes right down to it, I'm always a little disappointed when these threads come around because it sounds so easy to make money off these debt collectors. I'm pretty sure there's another guy on the forums who similarly decided to start fighting off debt collectors and realized that they are completely retarded and make themselves open for all sorts of misconduct lawsuits if you know what to pay attention to.

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Kaal posted:

Having good credit and generally being a Scrooge when it comes right down to it, I'm always a little disappointed when these threads come around because it sounds so easy to make money off these debt collectors. I'm pretty sure there's another guy on the forums who similarly decided to start fighting off debt collectors and realized that they are completely retarded and make themselves open for all sorts of misconduct lawsuits if you know what to pay attention to.

I'll be honest with you, if I could go back and not make the mistakes I did (WOW A FREE PIZZA AND SWEATSHIRT FOR APPLYING? WOW A $5000 LIMIT? SURELY I WILL BE FINANCIALLY RESPONSIBLE AT AGE 18!) I would have. I buried myself in a shitload of problems and I consider myself fortunate that there's no debtor's prisons and I'm able to use legal avenues to rebuild my credit rating and get something back from the collectors who would call me between midnight-5AM to try and coax payments out of me.

You can also insert the 'well if the collectors weren't scumbags they'd have nothing to worry about' line here but I don't really see it that way.

Kaal
May 22, 2002

through thousands of posts in D&D over a decade, I now believe I know what I'm talking about. if I post forcefully and confidently, I can convince others that is true. no one sees through my facade.

CubsWoo posted:

You can also insert the 'well if the collectors weren't scumbags they'd have nothing to worry about' line here but I don't really see it that way.

How do you see it then? You seem strangely sympathetic with the collectors for someone who seems to have been quite successful at fighting them in court after being hounded by them for years. I suppose I can understand that sentiment in regards to the individual workers (who are just doing their jobs in order to avoid going into debt themselves), but do you feel similarly towards the organizations and industry as a whole?

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Kaal posted:

How do you see it then? You seem strangely sympathetic with the collectors for someone who seems to have been quite successful at fighting them in court after being hounded by them for years. I suppose I can understand that sentiment in regards to the individual workers (who are just doing their jobs in order to avoid going into debt themselves), but do you feel similarly towards the organizations and industry as a whole?

The debt collection industry I find to be pretty genius. It runs primarily on the understanding that the average person does not know and will not attempt to exercise their rights, or even make the tiniest effort to contest what is being asked of them. Only something like 2-5% of debt lawsuit defendants in small claims court mount a defense or show up to court. They've found a vein of resources and do their best to tap it as much as they can.

It takes a lot of balls for them to sue people with no standing, no supporting documentation, and having proceeded with their debt collection violating any number of state and federal statues (all of which can open them up to four and five-figure lawsuits.) The whole industry would be out of business if consumers were better educated about their rights, but I don't see that happening. The average person is scared shitless by a court summons and will start groveling at the feet of the collector to settle out of court so they don't have to be at the hearing date. That's where the collector will generously take 80% of the amount to go away (and report the tradeline as settled, not delete.) It's also why so many of their suits will crumble immediately if you just show up - they can sit in the courtroom for a half-hour and make $200-500k in default judgments, why waste billable hours on your one case for $1-10k?

There are ethical, well-run, law-abiding collectors out there (and I've done pay-for-deletes with a few of them and they honored their end of the deal) and there are the scumbags (who end up writing me some nicely-sized checks to buy my silence) and in the end I don't see the industry as any different than any other one that has good and bad apples and the ability for some to cut corners and act unethically/illegally to get things done.

The tables are turning on the whole industry now, though, and I can see it being vastly reformed or changed in the next few years because credit card suits are dropping off (a lot of those firms have moved to collecting on payday loans - those are a massive cash cow.) A big change has been in something called arbitration. Arbitration, as recently as 12-24 months ago, was a debtor's biggest nightmare and there were whole books written on how to get out of it if the creditor tried to put you in. But things changed.

If you look at your credit card agreement, you'll probably see a section on arbitration. Most of those agreements say that it can be used as an alternative to the courtroom - and for a long time most of the major banks would put you there instead of filing suit. This was done because many of them used the National Arbitration Forum (NAF.) NAF was hugely pro-creditor, and took their cases no matter how flimsy. At one point, something like 95%+ of all arbitrations were judged for the credit card company, and the decision wasn't subject to an appeal since arbitration waived the right to litigate.

Then the Minnesota Attorney General stepped in amidst complaints of NAF's bias, investigated, and shut them down. They cannot take credit card arbitrations anymore. There are two other national arbitration firms: AAA and JAMS. AAA was a lot like NAF in their bias towards creditors, but they've seen what happened to NAF and have chosen to get out of the credit card arbs until they re-draft their rules to be 'pro-consumer.' JAMS has generally been fair to consumers, but has also said that they won't take arbs initiated by the credit card company.

This is why Bank of America and Chase have recently dropped their arbitration provisions - not because it's more fair to the consumer, but because at this point, a consumer electing arbitration on a debt all but torpedoes the creditor's claim. It still waives the right to take it to court, but the creditor will find it very difficult if not impossible to find a forum to take their arb claim. To get out of it, they would have to strike their own arbitration clause, which in many states would (if it would even be approved by a judge, "Your honor, we put this in to gently caress over the consumer, now it's loving us over, we want it out") invalidate the entire contract. I have a friend in another state who just started the arbitration proceedings with a major bank - he had to initiate, so he filed a claim against them for nearly $150,000 due to state/FDCPA violations and general damages. The bank is required to pay the fees to the arbitrator (somewhere around $3000 up front + travel and lodging for the arbitrator and his normal hourly rate once the session happens) and have run out of time to file a counterclaim. So they just haven't paid, and arbitration won't move forward, and his case can't go back to court. He's even thinking of suing them for not continuing arbitration in violation of the court order, but he's even more aggressively litigous than I am (he made $20,000 off a creditor trying to collect $450, but his state allows for a ton more damages.)

CubsWoo fucked around with this message at 11:18 on Nov 30, 2009

Icii
Aug 30, 2009

by Ozma
Wages and Bank Accounts are immune to garnishment in the state of Texas. You will never see a lawsuit if you are in that state.

clubfedgoon
Jul 2, 2009
It seems you could make a living off having various credit cards in default and then wait for the collectors to violate the FDCPA(which they always seem to do) so you can sue..

clubfedgoon fucked around with this message at 21:28 on Nov 30, 2009

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

clubfedgoon posted:

It seems you could make a living off having various credit cards in default and then wait for the collectors to violate the FDCPA(which they always seem to do) so you can sue..

If low-mid five figures in settlements (which aren't guaranteed) every seven years sounds like a good living, then get applying for cards you have no interest in paying back. Even with all these wins, my credit's been shot and it's going to be bad for a few more years yet until everything drops off my report. Don't go looking for this situation. If you want to do what I've done intentionally, go to law school and become a consumer lawyer.

CubsWoo fucked around with this message at 22:28 on Nov 30, 2009

Kaal
May 22, 2002

through thousands of posts in D&D over a decade, I now believe I know what I'm talking about. if I post forcefully and confidently, I can convince others that is true. no one sees through my facade.
Thanks for the awesome response. That was a really interesting read. What are some of the good resources you've found that have helped you deal with debt collectors? What are some of the most common mistakes made by debtors, creditors and collectors? If you could do it all again, what would you change (other than simply getting into debt in the first place?) What changes would you like to see made to the system as a whole?

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Kaal posted:

Thanks for the awesome response. That was a really interesting read. What are some of the good resources you've found that have helped you deal with debt collectors? What are some of the most common mistakes made by debtors, creditors and collectors? If you could do it all again, what would you change (other than simply getting into debt in the first place?) What changes would you like to see made to the system as a whole?

CreditInfoCenter is pretty good - they're full of ads for things like report checking and credit cards to help you rebuild credit but once you get beyond those there's a lot of good information and flowcharts on how to deal with collectors. There's also a ton of forums on getting advice, from creditboards (mostly on how to defend yourself when you're sued) to debtorboards (who advocate suing your creditors early and often) and I go to a handful of debt collector boards to lurk and see what they're talking about.

The most important site is probably your state court pages on the civil codes, though. Find out how long the creditor has to litigate, what they can sue you for, what they can't sue you for, what constitutes a valid suit, and how to file paperwork and motions to support your case.

Mistakes debtors make:

- Not educated. Easy. Don't know how (or even if) they're being screwed with. Don't know their credit score. When you're doing credit repair it's worth it to have paid accounts with the credit bureaus because then you can pull your credit report as much as you like (without a ding on your score) and have super easy access to disputing inaccurate information. Most importantly, again, don't show up to court when they're summoned - and if they do they just sheepishly admit to the debt and let the plaintiff's attorney add in $1000+ in court costs and fees. Even if you feel you can't handle being in court yourself, there are places to go for free legal advice (my county has an entire pro se assistance department as well as a referral service for low-income defendants.)

Mistakes creditors make:

- Not suing themselves as the original creditor. This is changing, though. How is usually goes is this:

1. Account gets defaulted, moves to OC's default/legal department, they try to contact you for ~6-12 months after default to pay. If you don't:

2. Account is sold in batches for pennies on the dollar to a collection agency. Adds in additional fees because they feel like it. Cycle starts again, usually for 6-18 months. May file suit, if your account looks juicy. If not:

3. Account sold again, for fractions of a penny on the dollar, to a junk debt buyer. These people buy the worthless paper - accounts where no address/phone # is valid, accounts out of statute, you name it (one of them tried to collect on my grandfather for a 22 year old Sears card balance of $200!) Will probably file suit at some point, if it's not sold to 2 or 3 other JDBs first for less and less money.

The farther down the chain your account goes, the less and less likely the person buying it has any valid, correct information about the account. For example, I was sued by a JDB for $4500. When I sent my request for documents, the final statement from the bank said I owed $2650 12 months ago. I asked the judge to have them show how $2650 turned into $4500 - they couldn't, and that won me the case. Once you get 2/3 buyers removed, they're probably not buying anything more about your account than an Excel spreadsheet with an account number and your name and last known address.

When an original creditor sues you, they almost always have all their ducks in a row. Easy access to your contract, agreements, statements, everything. Those are the suits to fear, and thankfully I've only had to defend myself against one. I'll admit I got lucky in that suit because the legal counsel they hired were... less than stellar (and that's all I'll say to avoid breaking my NDA.)

Mistakes collectors make:

- Well, they don't make many because they aren't capitalized on. Oh, they lie to the consumer, threaten them, file frivolous lawsuits where their only evidence is basically someone in the company saying "Yup, you owe this, pay up!" and do many other unscrupulous things, but they don't care.

Remember, they're buying your $10000 account, usually for as little as $50. If they buy 100 of those accounts and collect on just ONE of them at 60% of the balance, they've made $1000 on that portfolio! They'll take 30 of those to court, win let's say 25 of them (probably 28-30 in reality) and be countersued for $10000 by a debtor (and they settle for $5000.)

So on a $5000 initial investment (and probably $25000 in legal fees/attorney fees) they've made about a quarter-million dollars. They don't sweat being scumbags, because the odds are in their favor.

quote:

What changes would you like to see made to the system as a whole?

I'd like to see settling debt be more significant in regards to improving your credit. Right now, most people have no incentive to pay down a debt they've let default when they can aggressively challenge it and have it removed without paying or just stall the creditor out until the debt is time-barred. I'd like to see more regulation of what kinds of accounts debt buyers are able to purchase, with a requirement that they come with all the relevant paperwork showing title to the debt. I've had three different companies claim title to one Best Buy credit card of mine, and that shouldn't happen. Maybe increase the penalties allowable under the FCDPA to discourage frivolous lawsuits.

Mostly, though, I'd like people to be more informed on how they can challenge what's being asked of them. I don't advocate walking away from your debt as some sort of sound strategy or cunning plan or anything. It's stressful, it's difficult, and if you make mistakes you're going to be on the hook, legally, and in most states that means wage garnishments and account seizures. But too many people assume that if they're being sued or told they have to pay, well, they must have a good foundation to prove it, and that's more likely than not the case.

Azure Renraku
Oct 6, 2003
This is similar to what people are doing to banks that have sold their mortgages to banks who have sold the mortgages again to banks who have sold the mortgages yet again. Sometimes it takes months or even years for the paperwork to trickle down, and unless the bank can prove that you owe money on the house, it's yours. If no one can find the paperwork to show that you owe money on the house, it's yours.

The best idea here is to ask them to provide proof within 30 days or to GTFO. I'm not sure if 30 days is all they have from when you demand it, but it'll get them off of your back for a while.

Also, another big thing, is credit card companies saying that your rates are going up all of a sudden. You opt out and they tell you they want payment within 30 days and the account is frozen at the previous interest rate. Sorry, it doesn't work like that, you want to talk to me in court? Where such contracts are often proven unconscionable? Good luck!

'Unconscionable' is a word we're going to hear a lot of in the coming decades. Basically, a contract is supposed to be relatively equal. Currently contracts go like this, "I'm going to provide you with x service, at far above a reasonable price, I have all the power and can cancel at any time, you waive all rights and if you cancel you'll pay through the nose." Such contracts are unconscionable, meaning, a reasonable person would in no way ever agree to this unless they had no other options and were backed into a corner.

ballgameover.mp3
Oct 21, 2008
Thank you, this is going to come in very handy. I've made some bad decisions.

Utz
Aug 1, 2008

by vyelkin
Very interesting, thanks for making this thread. I once had a collector pursue me over a debt I didn't actually owe. I demanded that they prove I owed anything, sent it to them in writing, and never heard from them again.

My girlfriend owes about $25k on two credit cards. Servicing that debt has grown onerous to the point that she's having trouble making her monthly expenses (rent, food, etc). What should she do? Let it default and go into collections or try working something out with the CC company? Her goal is to keep her credit in good shape, and she's willing to pay back the money, she's just having trouble keeping up since they raised their monthly minimums.

seacat
Dec 9, 2006
Thread delivers, thanks! :)

How many credit cards did you have/what was your total debt when you decided to walk away from it? (Sorry if this is too detailed considering your NDA, please don't answer if so)

What state do you live in? (again sorry if too specific)

Did your debt ever force you to consider bankrupcy?

How do you feel about the Credit C.A.R.D. Act passed by Congress?

How do you feel about the credit card/consumer debt industry in general?

seacat fucked around with this message at 06:38 on Dec 1, 2009

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Azure Renraku posted:

Also, another big thing, is credit card companies saying that your rates are going up all of a sudden. You opt out and they tell you they want payment within 30 days and the account is frozen at the previous interest rate. Sorry, it doesn't work like that, you want to talk to me in court? Where such contracts are often proven unconscionable? Good luck!

This really does depend on your contract, your state, and the judge. Most credit cards just have a stipulation that the account is frozen at that rate, and you can pay it off over time. I've never had a card that demanded payment in full at the time of closure, but maybe that's changing with newer cards. The worst thing that can happen is when you have a judge who's clearly pro-creditor, one that denies your motions and grants multiple extensions for them to produce paperwork they likely do not have. You can usually move to have the judge replaced, or use their bias in an appeal, but that just takes more time and more effort on your part.

Utz posted:

My girlfriend owes about $25k on two credit cards. Servicing that debt has grown onerous to the point that she's having trouble making her monthly expenses (rent, food, etc). What should she do? Let it default and go into collections or try working something out with the CC company? Her goal is to keep her credit in good shape, and she's willing to pay back the money, she's just having trouble keeping up since they raised their monthly minimums.

I'll disclaimer again that I'm not a lawyer and this ain't legal advice - but she's going to have to make a hard decision. Regardless of whether or not you pay the debt once it defaults, it's likely going to stay on your record for 7 years, unless you negotiate a pay-for-delete (and then the tradeline's gone, which is still worse than having one in good standing.) I'd try to work out a more flexible payment schedule with the original creditor - if they'll allow it, and they don't mark the account as 'under settlement plan' or otherwise close the card. That's just about as bad as it being in collections, score-wise. If it's something she absolutely can't pay (and honestly, $25k of unsecured debt is not something you want to consider bankruptcy over) without making her monthly expenses, walking away may be a good idea, as long as she takes the time to research what to do when they start calling/writing letters/demanding large sums of money from her immediately. Also, if she has any secured debt (cars, properties, etc) do not default on those. Repos are terrible for your credit, and they don't go away very easily.

antwizzle posted:

Thread delivers, thanks! :)

How many credit cards did you have/what was your total debt when you decided to walk away from it? (Sorry if this is too detailed considering your NDA, please don't answer if so)

I'll keep it vague due to the multiple NDAs, but I had more credit cards/lines of credit than you could count on two hands, and the total debt owed was somewhere in the middle five figures.

quote:

What state do you live in? (again sorry if too specific)

Illinois. Home of "Sorry, Small Claims doesn't allow for discovery, good luck!"

quote:

Did your debt ever force you to consider bankrupcy?

Yes. It was either go bankrupt or fight.

quote:

How do you feel about the Credit C.A.R.D. Act passed by Congress?

Sucks. Is only going to make it more difficult for people rebuilding their credit to start getting cards. Banks are raising their requirements for getting cards. You'll see less of the 0%/low rate balance transfer offers, too, since they won't be as profitable for the bank. Doesn't do anything for currently open accounts (check GBS for the thread on people getting their rates hiked to 29.99% just because) and I think some of the smaller issuers will be swallowed up by CapOne/Chase/BoA and you'll see less choice in the market.

quote:

How do you feel about the credit card/consumer debt industry in general?

I hate the debt consolidators you see on late night commercials. All they really do is give you a single place to pay and sometimes a drop in the amounts you owe. I know plenty of horror stories using them (company didn't forward payments to the bank, forwarded payments to the wrong companies, closed every account in consolidation without telling the consumer, etc) and generally they can't do anything the consumer couldn't with a few phone calls to the right people at the bank. The credit card companies are what they are, and they won't change too much aside from getting more tight-fisted.

Credit's always been something of a scummy business.

OneEightHundred
Feb 28, 2008

Soon, we will be unstoppable!
Semi-related, is there a surefire way to make collectors chasing someone else's debt via my address/phone number gently caress off?

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

OneEightHundred posted:

Semi-related, is there a surefire way to make collectors chasing someone else's debt via my address/phone number gently caress off?

Send them a cease communications/cease and desist letter. Google that to find templates and send it off Certified Mail with a return receipt, so you know they got it. If the contact you after you get the little green card back, log every time they call and once they've called 5-10 times, let them know they've violated the FDCPA and you're intending to sue... but you might just let them go if they cut you a check for $1000!

Daedalus101
May 6, 2008
I've got a related question for you. At least 6 months ago I started getting letters from local attorneys saying they saw I had been sued and wanted me to hire them to make it all go away. They even mentioned the creditor who was suing me so I assume they just got it from public records. The statute of limitations on a defaulted card was coming up so I figured "yeah, I'm getting sued. big deal." A few days latter i found a little card taped to my door from the county sheriffs dept. that said i urgently needed to call them about an important legal matter. I assume this was them trying to serve me and never called them back. I've heard nothing more of this and am wondering if there is a way to find out if a default judgment was entered against me? . . .

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Daedalus101 posted:

I've got a related question for you. At least 6 months ago I started getting letters from local attorneys saying they saw I had been sued and wanted me to hire them to make it all go away. They even mentioned the creditor who was suing me so I assume they just got it from public records. The statute of limitations on a defaulted card was coming up so I figured "yeah, I'm getting sued. big deal." A few days latter i found a little card taped to my door from the county sheriffs dept. that said i urgently needed to call them about an important legal matter. I assume this was them trying to serve me and never called them back. I've heard nothing more of this and am wondering if there is a way to find out if a default judgment was entered against me? . . .

Your credit report would show a judgment on the account, or you can go to your county courthouse and see if anything has been entered. Some counties have online/phone databases as well. Since you were never formally given a summons/complaint, if you do have a default judgment, you may have a case to have the judgment vacated, but that can be pretty complicated and you may want to seek legal help to file that properly.

seacat
Dec 9, 2006
A few more questions if you don't mind:

To what extent have your credit card struggles affected your personal life? For example, have you had problems getting an apartment or a job because of your credit history?

What did you spend all that money on? I have maxed out 4 credit cards for about $13,000 during college, about 1/2 of that being somewhat justified (medical payments, tuition, books) and the other 1/2 frivolous spending (beer, gifts for my girlfriend, taking friends out to the bar etc.)

How do your friends & family feel about your choice on dealing with the situation?

What's the worst thing a debt collector has done to you?

During the worst time how many calls per day on average did you get from them?

You also mentioned some stories. I'd love to hear these :)

Keep posting!

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

antwizzle posted:

A few more questions if you don't mind:

To what extent have your credit card struggles affected your personal life? For example, have you had problems getting an apartment or a job because of your credit history?

Not many, I think. I even worked for a credit card company for a while with a sub-550 credit score.

quote:

What did you spend all that money on? I have maxed out 4 credit cards for about $13,000 during college, about 1/2 of that being somewhat justified (medical payments, tuition, books) and the other 1/2 frivolous spending (beer, gifts for my girlfriend, taking friends out to the bar etc.)

About what you spent it on. I really can't comment further.

quote:

How do your friends & family feel about your choice on dealing with the situation?

They're ok with it. Some of the older generation think I should pay up 100% (the whole 'moral obligation' thing) but my fiance is fully supportive of what I'm doing.

quote:

What's the worst thing a debt collector has done to you?

Threats of physical harm. Total scumbag collector who softened up considerably once I hit them with a summons for $30,000 in violations and damages.

quote:

During the worst time how many calls per day on average did you get from them?

Once or twice every hour. Some at work (which is a violation.) They mostly went away when I stopped home phone service and move to cell-only. I changed my phone number at least 4 or 5 times during the worst times, too.

As for stories, I'll first talk about the last lawyer I had to deal with.

Most debt collection lawyers are on the low end of the totem pole of their firm. As such, they aren't very good at thinking on their feet or dealing with challenges from educated pro se defendants. During the three hearings we had pre-trial he:

- Could not keep straight the amount the plaintiff claimed I owed
- Tried to tell me that fighting the lawsuit 'only adds legal fees I'll add on when I win' (not allowable, also a FDCPA violation)
- Continually insulted me for not being a lawyer, told me how amazing he was because he went to some Ivy League school. When I asked him why he was taking these cases instead of something more glamorous, he just said 'you wouldn't understand' and shut up.
- Told me his case was air-tight, but also said I didn't have the right to see the evidence he claimed he had on me. Didn't attach said evidence to his complaint, either.

The case was dismissed last month by a judge who was very upset at the lawyer's lack of basic competence (with prejudice, so they cannot re-file) and I'm currently in contact with the firm about what they would like to do for me so I don't hit them with a FDCPA suit.

Most of these lawyers do not expect and cannot handle being challenged on these suits. They want to show up, point to the spot where you aren't, and collect the full judgment without hassle. If you are being sued DO NOT LET THIS HAPPEN.

T Zero
Sep 26, 2005
When the enemy is in range, so are you
I'm in a bit of a tight situation myself. I didn't get a green card until after I finished college and ended up charging tuition to credit cards (I don't have any student loans or debt otherwise). Citibank told me that they would raise my interest to 30% if I didn't opt out, so I dropped it. This despite never missing a payment and regularly paying 1.5-2x the monthly payment owed. However, earlier in the year, Citi raised my rates 5% without informing me. They canceled my card due to a "security breach" and immediately issued me a new one, albeit at a higher rate, apparently hoping I wouldn't notice. I am currently up to date and regular with my payments and I do not want to default since I still have debt on an AmEx card and I don't want the rates there to go up due to a universal default clause. I posted this in another thread and here's the response I got:

quote:

you kill your credit and say goodbye to the card and bank basically. its a trade-off. if you still need that card, welp, there is NO reason for them to ever give a poo poo. however, if you are willing to go through some hassle and harassment... just stop paying. you dont own anything really for them to put a lien against you on, so it really doesnt loving matter. if you are relying on any private student loans though, don't do this, because it will gently caress you over fast.

stop paying
ignore their letters and calls
when the collectors start calling you, tell them you are recording the conversation as well... this basically scares away the first few levels of the collectors because its their job to lie to you and scare you into paying using illegal methods... like threats and whatnot.

eventually, you will get someone who agrees, and then you start negotiation on the total. all fees and interest charges are removed and the original amount you borrowed is the high-end... offer 30-40% of that amount and you'll pretty much get it every time. the difference will count as "income" to you, and you'll owe tax on it, but if you are a student, odds are that you are below the threshhold where it'll cost anything real. you can get lower amounts out of them, but it takes more leverage against them. it's a lumpsum settlement, move the exact amount into a bank account that you basically NEVER use, and give them the info for it. it should not be at your main bank. you should also record the entire conversation with them verifying that the debt is fully settled and get paperwork saying as much from them. then fire off letters to the credit reporting agencies to challenge the record. unless they really loving hate you, they'll ignore it because it's just not worth their time anymore on a closed account.

congrats, you win. furthermore if you dont want to gently caress your credit, you could just call up the corporate number and tell them that this is exactly what you are going to do if they dont lower your rate back down. say you've done it before, you can get it wiped from your account and they have a choice between keeping you as a customer and making some profit, or losing a shitload of money on this small debt as well as any future profits from you as a customer. in this economy, you p much automatically have some decent leverage against failing banks.

....

well yea, see if they'll drop the rate... failing that however....

ideally... get a private loan to pay it off and lock in a much lower rate (use #3 below to make that amount smaller)... failing that...

1) see above
2) if the amex is much more tolerable and has a much lower rate, could you afford the payment on the amex if it covered it all? if you can.... dont do a balance transfer, that will gently caress you in the end most likely (might be wrong here, but just my experience... call and check, but i'd be willing to bet their transfer fee is 3% or higher and the rate aint too hot)
3) call up the lovely card company that refuses to lower the rate and demand a negotiated settlement figure for a 1-time payoff amount. regular customer service wont give a poo poo... you'll prolly have to call customer retention to get it. get documentation on that number... fixing that number is important.
4) if the answer to 2 is YES... figure out what online merchant account will hit you with the lowest fees, associate the amex card with your regular google checkout/paypal/whatever account, open a new google checkout/paypal/whatever account that is a merchants account and associate a fresh bank account with it... make a "purchase" in the appropriate amount (keeping in mind a percentage is gonna be eaten), transfer that balance into your account and pay off the lovely card. another way would be having a close friend take in the payment and transfer it back to you to avoid future complications.

this is basically a cheap way to get a cash advance. pay off that amex asap if you need private loans.

if they are government-backed loans however... you can safely file for bankruptcy and not affect getting them (it's actually illegal for a bankruptcy to be taken into consideration on fed loans) DONT gently caress AROUND WITH THE STUFF ABOVE IF THIS IS THE CASE OR YOU WILL LOSE. you're still a student, and your credit will be rebuilding nicely by the time you're out, as long as both cards have a decent history of payments on em, you should be able to get it all discharged. you mentioned greencard and tuition, so i'm going to assume this is a 5-digit number in total that probably doesnt start with a 1.

i'm also certain people will chime in about this being unethical or immoral behavior, but it's really no worse than the usurious rates and endless bloodsucking.

I'm not sure how to go about this. Is this a good idea? I'd like to get a second opinion and see if there is a way to settle without completely trashing my credit.

H110Hawk
Dec 28, 2006

T Zero posted:

I'm in a bit of a tight situation myself. I didn't get a green card until after I finished college and ended up charging tuition to credit cards (I don't have any student loans or debt otherwise). Citibank told me that they would raise my interest to 30% if I didn't opt out, so I dropped it. This despite never missing a payment and regularly paying 1.5-2x the monthly payment owed.

I'm not sure how to go about this. Is this a good idea? I'd like to get a second opinion and see if there is a way to settle without completely trashing my credit.

You aren't behind and they're raising your rates? Call up any other bank and ask about free balance transfers. (0% fee or 0% interest over X months. Run the math on which is better for you.) Tell them how much money you have on your cards and that you have a clean payment history. They'll pull your credit report and verify that. Once you've transferred all the money over call up Citi and tell them to get hosed. You have above average credit if you've never missed a payment, even if your debt:income ratio is off the charts. Ask these other banks about converting your card to a personal loan, but that is a long shot.

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

H110Hawk posted:

You aren't behind and they're raising your rates? Call up any other bank and ask about free balance transfers. (0% fee or 0% interest over X months. Run the math on which is better for you.) Tell them how much money you have on your cards and that you have a clean payment history. They'll pull your credit report and verify that. Once you've transferred all the money over call up Citi and tell them to get hosed. You have above average credit if you've never missed a payment, even if your debt:income ratio is off the charts. Ask these other banks about converting your card to a personal loan, but that is a long shot.

Good luck getting favorable balance transfer rates right now. Credit is tight as hell at most of the banks, and the default rates on balance transfers have skyrocketed over the last 2 years. If you have excellent credit, maybe. I've got friends who work at Chase Bank and they've told me you'd be lucky to get a 7-10% rate on a transfer for 6-12 months, plus a 3% transfer fee. And those are going to people with good credit. If your credit's average or below, the door's shut. Especially for new customers, banks don't need people playing the transfer shuffle and paying little or no interest on more debt for the company.


T Zero posted:

I'm not sure how to go about this. Is this a good idea? I'd like to get a second opinion and see if there is a way to settle without completely trashing my credit.

If you're not looking to trash your credit, walking away from any of your cards isn't an option. You will see major dips in your rating as soon as 60-90 days from your first batch of missed payments. If you're looking to do a settlement with them, they also won't even talk to you about doing one usually until you're 120-210 days overdue on payments and they're about to send your account to be sold to a collection agency or set up for a lawsuit. Even a settled, closed card will probably sit on your credit and ding it down for 2-7 years and most banks will challenge a report dispute on it nowadays.

I've never done anything in regards to using a merchant account to act as a de facto balance transfer, but if you can get the balance on one card I'd recommend it. Just don't then run up the empty card now that the credit's available!

However, if you do decide to walk away, then walk away now. Stop making payments and sock some of that money away for savings/settlements later. If you absolutely need credit open for an emergency, consider applying for a card from another bank or a credit union while your score is still high, and only have it available for major emergencies, aside from using it once or twice a month to fill up your tank and immediately pay it off so they don't close it for inactivity. That card will likely see a rate reduction/credit limit drop as your score plummets.


You will get letters and phone calls from Citi and Amex. Ignore them. At the 180 day mark or so, call them and try to negotiate a pay-for-delete at 20-30% of what you owed. Make it clear that if you don't get a full delete (or, at worst, a 'closed by consumer') you aren't paying. Most original creditors will not do this. Don't worry, at least you tried.

30-90 days after this, one of two things will happen:

1) You'll get what's called a dunning letter from the people who bought your account(s). This lets you know who now owns your account and your rights as a debtor. Send them a letter back demanding they verify that the account is yours, they have the proper documentation, and that the account was sold legally. At the same time, dispute the account with the credit bureaus.

If they continue collections without validating, that's a violation. Note it. If they validate with the bureau but send you nothing, violation. After 30 days, if they don't hear from the debt buyer, the agency will delete the tradeline - and if they put it back on, that's a violation if they haven't validated with you. Note any and all violations of how they contact you by mail (does it expressly say it's a communication to collect a debt?) and by phone (Are they calling at allowable times? Only at home? Do the discuss the debt with your family/roommates/anyone but you?) and if they contact you at all if you included a cease communication request in your letter. If you include that, they can only contact you to let you know they've sold the debt to someone else, or to sue you.

Give this 2-6 months, and generally the buyer will have committed enough violations for you to make a move. Write them (or call, if you're brave) and demand a pay-for-delete at 10% of what they claim you owe, or you will begin lawsuit proceedings against them for FDCPA violations. If they accept(go up to about 30-35% if they reject 10%), get the terms in writing, then pay them and dispute the tradeline - if it doesn't go away in 30 days, sue them.


2) The original creditor will open a lawsuit against you in your county, using rent-a-lawyers in your area. You'll be served with a summons that has a return date where you have to appear. This is not your trial date but you do need to attend or you lose automatically. Expect this from AmEx - they're very sue-happy right now. Citi will probably sell your debt before they sue, but you can never tell.

Read up on your state's Rules of Civil Procedure. In my state, showing up at the appearance date and saying you deny the claims is enough to proceed. In other states, you will need to file a written answer (I'd suggest filing the answer anyway, even if you don't have to. The other side will need time to read it, and that can buy you 1-2 months between court dates. I had a suit that began in July 07 that didn't have a firm trial date until September 08. Courts can be slooooowwwwww.) Examine the summons and complaint. What are they suing you for/what evidence did they attach? Since it's the original creditor, they'll likely have everything they need to beat you, but many rent-a-lawyers can be very, very bad at managing even slam-dunk cases when they're pressed.

As of right now your best defense against an OC is electing arbitration. 95% of all cards that began prior to August of this year will have an arbitration clause, and electing it waives the courtroom proceedings into a private setting. I can go deeper into why arbitration is so good for consumers right now (and did a bit a few posts up) but let's put it this way - there are cases right now where AmEx's lawyers are trying to say that their own clause should be invalidated because they are having difficulty finding an arbitration forum to take their claim.

If you need more information I'll be happy to answer your questions.

CubsWoo fucked around with this message at 08:59 on Dec 2, 2009

nipple clumps
Apr 28, 2005
GUYS I RANKED ON THAT FIGHT :smug:

:gizz::gizz::gizz:
I'm trying to understand why I haven't had a law suit filed against me yet for my debt. I basically walked away from my debt several years ago because it just got crazy and out of hand. I was trying to finish school and work at the same time, and I ended up dropping out of school regardless.

I was 18 and in school when I started getting into debt, and it culminated in me defaulting on student loans (which I'm now trying to rehabilitate), owing 3k or so to an apartment complex for not being able to pay up to cash out of my leasing agreement, owing almost 10k on a credit card, and some smaller sums here and there.

Now I'm in the position where I live alone, I make 40k a year, but I can't get a credit card and I can't save any money because I keep having to fix my lovely truck to get around and can't get a loan for a new car. It certainly seems like a vicious cycle, and I can't comprehend why nobody has come after me yet legally for some of the debt. I have moved around quite a bit, and so maybe that has something to do with it.

A lot of my accounts are several years overdue, and I imagine my freshest one must be approaching 2-3 years now. Do you have any advice for someone in my situation regarding what course of action to take?

If I do end up getting sued, I will most likely be hosed, even more than I currently am somehow. I noticed in your list of options that filing for bankruptcy wasn't listed. Had you considered this at all? I certainly have been thinking about it, but I am not sure where to start or who to call.

I find your situation very interesting and it's great to know that you've gotten yourself into a better situation. It gives hope to someone like myself that hosed up really bad before I knew the full repercussions for my actions.

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU
You may not have been sued either because they can't find you or they feel your debt isn't worth suing for.

Squared posted:

A lot of my accounts are several years overdue, and I imagine my freshest one must be approaching 2-3 years now. Do you have any advice for someone in my situation regarding what course of action to take?

Order your credit reports. All 3 bureaus will give you a free trial for a week or so, which is enough time to check all the accounts on your record and who claims to own them now. Check your state for how long the statute of limitations is, and if any of the accounts are over 7 years old. Anything over those timeframes is no longer your legal responsibility to pay, and the people who own it can't legally collect. Send those collectors/creditors letters demanding they be removed from your credit report and dispute them with the bureaus. If it's prior to 7 years, likely it won't be pruned from your report - but they may mistakenly start trying to collect, and that's something you can threaten a lawsuit on.

Anything that's still within statute you have to be more careful on. If they're not currently contacting you, there's a good chance they don't know where you are/don't care about your debt. This means if you don't need your credit better immediately, you can sit back and wait for the statute to expire. If you do want to start repair right now, dispute the debts through the bureaus and force them to validate. This will give those agencies your current address (and possibly phone number, if not through the bureau then probably through a Lexis search) and put you back on their radar. If you just want it over with and you have the money to settle, offer them a pay-for-delete at 10-20% of what they claim you owe and see if they bite. Don't let them go too much higher, they wrote your account off for dead long ago and the fact they get anything at all from you is profit.

quote:

If I do end up getting sued, I will most likely be hosed, even more than I currently am somehow. I noticed in your list of options that filing for bankruptcy wasn't listed. Had you considered this at all? I certainly have been thinking about it, but I am not sure where to start or who to call.

I'm not a big fan of bankruptcy - it sticks on your credit report for 10 years instead of 7 and the changes in the rules and rulings can still leave you with debt issues. It's something I think should only be considered as a nuclear option, and while I don't have experience with it I'm sure there are plenty of bankruptcy forums out there who could help much better than I.

Rubber Johnny
Apr 18, 2007

When I was a child if someone brandished a shrink gun he'd get a little bit of respect!
This thread has been a real eye opener for me concerning my debt issues. I can't thank you enough for setting me in a direction I never thought possible. I have a question I hope you can shed some light on.

I currently have an installment loan with Citi Financial, something to the tune of 14K that I am making monthly payments on. One of the conditions of the loan was surrendering the title to my used car (or rather, entering a lien on the title in their name). This is on top of about 9k in credit card debt.

Falling under hard times this year as well as having my first child, I find myself having to choose between paying these debts and putting food on the table. Furthermore, the aforementioned vehicle has fallen into disrepair and is basically worthless at this point.

I am carefully considering my options right now, and I was wondering if you could tell me if I am opening myself up to any unforeseen implications by allowing Citi Financial to haul my car away if I stop making payments and start to ignore their calls. Like I said, it's of little consquence to me because it's busted and not worth it's weight in scrap metal. You explained pretty well how credit card debt collectors work but for me this seems to be a different situation. Would I be able to follow the same steps?

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Rubber Johnny posted:

This thread has been a real eye opener for me concerning my debt issues. I can't thank you enough for setting me in a direction I never thought possible. I have a question I hope you can shed some light on.

I currently have an installment loan with Citi Financial, something to the tune of 14K that I am making monthly payments on. One of the conditions of the loan was surrendering the title to my used car (or rather, entering a lien on the title in their name). This is on top of about 9k in credit card debt.

Falling under hard times this year as well as having my first child, I find myself having to choose between paying these debts and putting food on the table. Furthermore, the aforementioned vehicle has fallen into disrepair and is basically worthless at this point.

I am carefully considering my options right now, and I was wondering if you could tell me if I am opening myself up to any unforeseen implications by allowing Citi Financial to haul my car away if I stop making payments and start to ignore their calls. Like I said, it's of little consquence to me because it's busted and not worth it's weight in scrap metal. You explained pretty well how credit card debt collectors work but for me this seems to be a different situation. Would I be able to follow the same steps?

The car situation, I think, makes it securitized debt which isn't my forte. However, it's probably possible to follow the same steps once they take the car and try to collect on the remainder. You may want to ask on creditboards or one of the other major debt-related forums for more advice.

Check the terms and conditions of your loan. Is arbitration an option? The current climate regarding how pro-consumer it is can scare collectors away if you threaten to elect it in a letter.

CubsWoo fucked around with this message at 08:05 on Dec 3, 2009

Man In The Boat
Jan 2, 2006
Let's get down to brass tacks

Rubber Johnny posted:

I am carefully considering my options right now, and I was wondering if you could tell me if I am opening myself up to any unforeseen implications by allowing Citi Financial to haul my car away if I stop making payments and start to ignore their calls. Like I said, it's of little consquence to me because it's busted and not worth it's weight in scrap metal. You explained pretty well how credit card debt collectors work but for me this seems to be a different situation. Would I be able to follow the same steps?

That depends on the laws regarding deficiency judgments in your state. The finance company may be able to repossess the car and still go after you for the amount owed on the loan (perhaps minus what they can sell the car for). If the deficiency laws are in the favor of the creditor, a secured debt may be no different from an unsecured debt.

Basketofpancakes
Sep 26, 2005
Hey, I guess I should ask you for advice.

I have 4 credit cards and half of a defaulted car on my name. About 2 years ago me and my then wife were going to declare bankruptcy, but apparently she read in some book that it was better to just not pay if you were dirt poor like us because we didn't make enough to have our checks garnished.

So it's been....2 years now, and I've just been adding these numbers to my phone and putting them on silent, completely ignoring them. I don't receive any mail since I moved a year ago relating to my debt. Nowadays I get one automated call a day, if that. It's more like every other day now, and I just ignore it, and I get an automated message on my phone that I just delete. I've never gotten any summons to court or anything.

So I guess my question is....do I have anything to worry about? I currently make about 15k a year...in a year I will be making almost twice that, so I guess I'm concerned they are finally going to be able to convince a judge to take some of my money. But I've never heard anything about a court summons.

I know my credit is hosed, not sure how much, and I'm not sure what I can do about it. What should I be doing to rebuild my credit?

Basically this was my debt:

1 card: $200
1 card: $500
1 card: $800
1 card: $1500

defaulted car: not sure, but probably $5000.

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Basketofpancakes posted:

Hey, I guess I should ask you for advice.

I have 4 credit cards and half of a defaulted car on my name. About 2 years ago me and my then wife were going to declare bankruptcy, but apparently she read in some book that it was better to just not pay if you were dirt poor like us because we didn't make enough to have our checks garnished.

So it's been....2 years now, and I've just been adding these numbers to my phone and putting them on silent, completely ignoring them. I don't receive any mail since I moved a year ago relating to my debt. Nowadays I get one automated call a day, if that. It's more like every other day now, and I just ignore it, and I get an automated message on my phone that I just delete. I've never gotten any summons to court or anything.

So I guess my question is....do I have anything to worry about? I currently make about 15k a year...in a year I will be making almost twice that, so I guess I'm concerned they are finally going to be able to convince a judge to take some of my money. But I've never heard anything about a court summons.

I know my credit is hosed, not sure how much, and I'm not sure what I can do about it. What should I be doing to rebuild my credit?

Basically this was my debt:

1 card: $200
1 card: $500
1 card: $800
1 card: $1500

defaulted car: not sure, but probably $5000.

At this point, lawsuit wise, I would say you probably don't have much to worry about. I won't speak on the car loan, but most of the time creditors won't sue on unsecured debt that's less than about $2000 - it's generally not worth the effort to pay to have the suit filed and hire local counsel to go through the motions. Note I say most of the time, though, banks like Cap1 have been known to sue for $300 cards in the past. And even if they can't collect on the debt immediately, having a judgment on your credit report hurts far worse than an unpaid card (and stays there 7 years from the judgment date) so that's something to worry about.

If you're not getting mail, they don't know where you live and aren't bothering to try to find out. I would check your credit report sometime and see if they have levied a judgment against you at your previous address. As I've said before, collectors/their scumbag attorneys will do things like sue you at your last known address, falsify a proof of summons, and obtain a default judgment against you without you ever knowing it. (Someone I know had a judgment against them claiming they were served at an abandoned strip mall, of all places.) In that case, you'd need to have the judgment vacated (a process that I'm not going to go over in this post - if you have that going on, let me know and I'll cover it) and move from there.

Small potatoes cards I wouldn't be too concerned about in terms of legal action, but when you start making more cash you may want to consider trying to do a PFD on those credit cards to get them off your record. That's $3000 in debt that you'd probably be able to get deleted off your record for under $1000 if you're savvy in dealing with them.

Also, if you're going to get serious about credit repair, you may want to consider getting a secured credit card from Bank of America or one of the other banks that offer it (try local credit unions, or anywhere that has a manageable annual fee. No-fee secured cards are difficult-to-impossible to find, and there are a lot of scam companies that will say "Here's a $300 limit, but we pile on $250 in fees to start up the card, what a sweet deal!" Don't ever do those.) They usually let you start the card with $300-500, and if you're responsible with it and keep up your payments, after 12-24 months there's a good chance they'll move it into an unsecured card and convert your cash deposit into a savings or checking account. You can also try applying for store credit cards - they generally have low acceptance standards, and buying 1 thing a month from that store and paying it off in full looks good on your report. One of my first post-repair cards actually came from Macy's, with a $100 limit. So every month I bought a pack of socks or a meal at the cafe and paid it off, and in less than a year they jumped my limit to $1500, and that being reported at 0% utilization helped my score a bit.

Zarrr
Oct 1, 2001

CubsWoo posted:

Most debt collection lawyers are on the low end of the totem pole of their firm. As such, they aren't very good at thinking on their feet or dealing with challenges from educated pro se defendants.

quote:

Most of these lawyers do not expect and cannot handle being challenged on these suits. They want to show up, point to the spot where you aren't, and collect the full judgment without hassle. If you are being sued DO NOT LET THIS HAPPEN.
As a lawyer who does a small amount of debt collection, this is all pretty much untrue where I practice. Perhaps things are different where you live, but I'm frequently challenged on judgment recovery suits (also frequently they do go unchallenged) and am absolutely fine with that happening. The more work a lawyer does on a file, the more he gets to bill. No skin off my back if you want to fight it.

Also your comment about relative skill is just bullshit. You may have hit some bad lawyers, but it's by no means a universal truth. Around here, the reality is that you'll end up against junior members of a firm, which may or may not mean anything. In fact, its likely they will be more prepared and do more to satisfy the client than a senior guy who has a lot more important stuff to think about.

I agree with the general thrust of this thread, that if you are in bad financial shape it is difficult for a creditor to do anything meaningful to collect. That said, 98% of people will face significant problems if they default as they have something to lose. I regularly garnish wages, enforce against assets, register/execute against property, etc. In my view it's only those people with nothing but big unsecured debt (and a lack of concern for their own credit rating/"moral obligation") and nothing to show for it that should be doing anything recommended in this thread. Again, that's based on where I practice.

All this is to say that you should really consult with your own lawyer and see how things are where you live before taking such steps.

Zarrr fucked around with this message at 15:23 on Dec 3, 2009

rjsnyde
Nov 20, 2009

WILL AMOUNT TO NOTHING IN LIFE.
It's nice to see other people have been hosed over in one way or another by creditors / collectors. I made some poor decisions when I was younger, coupled with some bad luck with work, and now have a sub 500 credit score and no money to even think about paying things off. The major things are medical bills and a couple of car repos. Everything else is small stuff, less than $500 that I think has been given up on.

I do have a question about the repos though. Last year, I was doing quite well as a contractor installing cable TV. We were just about to the point of being able to save / pay down some debt, but my job went in the toilet and our nice van was repoed. I never learn, because this very same thing happened 4 years earlier, except the van only had like $2000 owed on it. Oddly enough, in the 4 years since the first repo, I haven't heard anything from the dealer where I got the car. They tried to come and get it, it wasn't working so I said just let me clean it out (it was full of tools and cable boxes) and come back and tow it away. That was the last I ever heard from them, no letters, no calls, nothing. It was one of those buy here pay here deals with the little boxes you put a code in when you pay, sort of like a breathalizer for deadbeats instead of drunk drivers. Anyway, I don't want to call and ask, just to open things back up but I am curious what may have happened. I used this van for work, and it was pretty beat up when they took it. Any thoughts on that?

The second repo, was a newer van. They took it around August of this year. Owed ~$12,000 when they took it, haven't heard from them - yet - but awaiting a court date on that one. When we bought it, we got one of those "come to the dealer and claim your prize" flyers, and the whole thing was shady. The salespeople were from out of town, and running this 'promotion' for the dealer. We actually were doing ok at the time, and needed a newer car for the family, so we went ahead with it. I make poo poo for money now, not really enough to pay bills, so I'm wondering how this might play out, in court or otherwise.

Thanks for some interesting reading!

skipdogg
Nov 29, 2004
Resident SRT-4 Expert

Worth mentioning is each state has it's own set of laws regarding contracts, and things like that. To get the best information you'll want to list what state you live in if you ask questions.

Here in Texas, a creditor isn't getting poo poo from you. They can sue you but they can't garnish your wages or lien your homestead for it. Also the Texas Finance Code is extremely consumer friendly. Much more so than the FDCPA or FCRA.

rjsnyde posted:

It's nice to see other people have been hosed over in one way or another by creditors / collectors. I made some poor decisions when I was younger, coupled with some bad luck with work, and now have a sub 500 credit score and no money to even think about paying things off. The major things are medical bills and a couple of car repos. Everything else is small stuff, less than $500 that I think has been given up on.

I do have a question about the repos though. Last year, I was doing quite well as a contractor installing cable TV. We were just about to the point of being able to save / pay down some debt, but my job went in the toilet and our nice van was repoed. I never learn, because this very same thing happened 4 years earlier, except the van only had like $2000 owed on it. Oddly enough, in the 4 years since the first repo, I haven't heard anything from the dealer where I got the car. They tried to come and get it, it wasn't working so I said just let me clean it out (it was full of tools and cable boxes) and come back and tow it away. That was the last I ever heard from them, no letters, no calls, nothing. It was one of those buy here pay here deals with the little boxes you put a code in when you pay, sort of like a breathalizer for deadbeats instead of drunk drivers. Anyway, I don't want to call and ask, just to open things back up but I am curious what may have happened. I used this van for work, and it was pretty beat up when they took it. Any thoughts on that?

The second repo, was a newer van. They took it around August of this year. Owed ~$12,000 when they took it, haven't heard from them - yet - but awaiting a court date on that one. When we bought it, we got one of those "come to the dealer and claim your prize" flyers, and the whole thing was shady. The salespeople were from out of town, and running this 'promotion' for the dealer. We actually were doing ok at the time, and needed a newer car for the family, so we went ahead with it. I make poo poo for money now, not really enough to pay bills, so I'm wondering how this might play out, in court or otherwise.

Thanks for some interesting reading!

The first one I wouldn't worry about. The BHPH place made a profit off of you and coming after you just costs money. They took the van back, prettied it up and sold it off to someone else making even more money.

As for the 2nd repo, things depend. Have you gotten any mail from them? It'll probably come certified. Have they sold the van yet? Who was the financing company and what state do you live in?

what is this
Sep 11, 2001

it is a lemur

CubsWoo posted:

Send them a cease communications/cease and desist letter. Google that to find templates and send it off Certified Mail with a return receipt, so you know they got it. If the contact you after you get the little green card back, log every time they call and once they've called 5-10 times, let them know they've violated the FDCPA and you're intending to sue... but you might just let them go if they cut you a check for $1000!

I constantly get calls on my cell for someone else who apparently owes various companies money and likes to put down my phone number. I've called back, told them to stop calling, done everything I could.

Are you suggesting I could sue them and collect money? I'm so frustrated by this poo poo that I'll do anything to stop it.

It comes and goes in bursts, right now it's about a call a week but sometimes they'll call every day (when a new company gets my number).

rjsnyde
Nov 20, 2009

WILL AMOUNT TO NOTHING IN LIFE.

skipdogg posted:


The first one I wouldn't worry about. The BHPH place made a profit off of you and coming after you just costs money. They took the van back, prettied it up and sold it off to someone else making even more money.

As for the 2nd repo, things depend. Have you gotten any mail from them? It'll probably come certified. Have they sold the van yet? Who was the financing company and what state do you live in?

I live in New Hampshire, bought the van in Maine, and it was financed through 'Western Funding' out of Nevada I think. No mail as of yet. Looking back this was very shady having an outside company conduct a sale for what I thought was an established dealer with a decent reputation. I can't for the life of me figure out why they would have brought in a bunch of high pressure sales people with gimmicks to get people in.

Oh, thats right.. I bought one didn't I.. :downsbravo:

I'll have to wait and see, but if they want any money from me it's going to be less than $30 a month. I'm self-employed to so wages to garnish.

CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

Zarrr posted:

As a lawyer who does a small amount of debt collection, this is all pretty much untrue where I practice. Perhaps things are different where you live, but I'm frequently challenged on judgment recovery suits (also frequently they do go unchallenged) and am absolutely fine with that happening. The more work a lawyer does on a file, the more he gets to bill. No skin off my back if you want to fight it.

Also your comment about relative skill is just bullshit. You may have hit some bad lawyers, but it's by no means a universal truth. Around here, the reality is that you'll end up against junior members of a firm, which may or may not mean anything. In fact, its likely they will be more prepared and do more to satisfy the client than a senior guy who has a lot more important stuff to think about.

And that's fine, but it's usually skin off your plaintiff's back. A defendant who shows up to defend costs exponentially more than a default judgment, and the costs in billable hours and time to collect skyrockets again if they're filing answers, motions, discovery, and nowadays especially - arbitration. Cap1 now fires local counsel off the case if arbitration is even mentioned by the debtor. I think BoA and Chase are doing that too. At some point the plaintiff has to weigh the fact that they're spending $5000 on legal fees and 6-8 months of time chasing after at $3000 debt (fees they won't get awarded from the court) and consider the case no longer worth it when that same lawyer can move to the stack of default judgments that they'll earn in full with two hours worth of work.

I have yet to be sued by a lawyer (and we're talking double-digit numbers of law firms in my state) that provided even a minimal level of acceptable proof that they had standing to sue, that proved my obligation to pay, or that what they claimed I owed was the correct amount. I'm sued without contracts. Sued without evidence of the account being sold. Sued by firms that believed tripling the balance due in fees they couldn't document was acceptable. Motions filed full of spelling errors, sent to the court unsigned and not notarized. Motions filed where a copy wasn't sent to me in an attempt to weasel a default judgment for not showing up (thank goodness I check the county website every few days for changes!)

It is my opinion, and the opinion of many similar-experienced pro se litigators, that most lawyers representing small claims suits brought by creditors/junk debt buyers are not the cream of the legal crop, and are fairly easy to defeat given an educated pro se defense. Your mileage may vary!


quote:

I agree with the general thrust of this thread, that if you are in bad financial shape it is difficult for a creditor to do anything meaningful to collect. That said, 98% of people will face significant problems if they default as they have something to lose. I regularly garnish wages, enforce against assets, register/execute against property, etc. In my view it's only those people with nothing but big unsecured debt (and a lack of concern for their own credit rating/"moral obligation") and nothing to show for it that should be doing anything recommended in this thread. Again, that's based on where I practice.

All this is to say that you should really consult with your own lawyer and see how things are where you live before taking such steps.

I agree. Again, I'm not a lawyer. I just beat lawyers as a defendant in debt collection cases and a plaintiff in FDCPA/FDCRA cases. I cannot guarantee that what works for me will work for you. In many cases, a lawyer will do what I do better, for a price.

And in terms of 'having nothing to lose,' well, that was me. If you cannot pay the debt you've accrued (regardless of why, I know sob stories are not effective defenses) there's no point in sitting back and allowing judgments onto your record. If you win, great! If you lose, aside from any state where they collect legal fees, you are no worse off than you were the day you were served. In nearly every case, you have nothing to lose by challenging a lawsuit against you. I will make one caveat - if the amount owed is too much to be seen in small claims, you will probably want hired counsel. I recommend the National Consumer Law Center (consumerlaw.org) to find a good consumer lawyer in your area.

friendship waffle posted:

I constantly get calls on my cell for someone else who apparently owes various companies money and likes to put down my phone number. I've called back, told them to stop calling, done everything I could.

Are you suggesting I could sue them and collect money? I'm so frustrated by this poo poo that I'll do anything to stop it.

It comes and goes in bursts, right now it's about a call a week but sometimes they'll call every day (when a new company gets my number).

Find out who's calling, get their address and send them a cease and desist letter certified mail with a return receipt. Once the green card comes back, log every call you take from them (and if you can record the calls in your state, do so.) After a few weeks/month of phone calls, contact them with an intent to sue for harassing you for a debt that isn't yours. I don't know the exact areas that falls under for the FDCPA/your state rules, but give your intent to sue for the maximum allowed + damages for pain and suffering. State you will reconsider suing if they wish to settle with you for $1000-2000, depending on how many times they called. They may pay you at this point, they may ignore you. It might take having them served with the suit before they get serious, but generally if you do it right they'll cave before that.

3 Stacked Midgets
Jul 29, 2004
Triple Threat
I've got a very interesting issue.

In 2005, I incurred an unpaid tuition bill for Summer classes totaling $5,000. A few months after, it went to collection. I told them to go after my father for the money, because he had told me that he had paid it, his name was on the Bursar tuition forms and so on. I didn't hear from them again.

In late 2007, I was unable to pay a $20,000 tuition bill to a private university (my dad - surprise - reneged on paying a week before the semester began). The school advised me to take out a private loan. I applied and was approved, but backed out of it at the last moment because I knew I was unlikely to be capable of paying it for many years and knew that finishing the rest of my undergraduate education on borrowed money at one of the most expensive private university in the country would be very foolish.

I received collection notices for the tuition in Summer 2008 and promptly ignored them.

Fast-forward to Summer 2009. I notice a letter addressed to me while helping my dad (whom I hadn't spoken to in years) arrange his affairs shortly before his eviction. I find a court summons for the $5,000 bill with my name on it, although about a month past. I let that slip for a while too, as I've been trying to get my other poo poo together (booze, drugs, e/n).

I just ordered my credit report for the first time in response to the cool, down-to-earth advice on this thread regarding lawsuits. I assumed that credit repair would be a waste of time for me until I had enough money saved up to start offering credible settlements to all my major creditors.

The past-due tuition accounts don't appear on my credit report at all. Neither do the collections. All I see are my pathetic, maxed-out baby credit cards and the collection attempts for them along with a few of my dad's maxed-out accounts that shouldn't be on my report that I just disputed.

It looks like I wrecked my credit by allowing my baby credit cards to default thinking it wouldn't matter in the long run, because the big collectors never bothered to report what they were doing. Let this be a lesson to you all! Get a free credit report! It takes thirty seconds! I procrastinated on it for years and now I have bankruptcy-level credit for around $1500 in borrowed money just because I assumed I was already doomed.

I don't get it. Am I still liable for those big debts even though they don't appear anywhere on my credit report? Did the collectors drop me and go after my dad instead (not likely, as my name was on the lawsuit notice that I read)?

If they are still after me but not on my credit report, can I somehow screw them? Can they still screw me? I'm guessing I could start by calling the universities that sold the tuition bills and find out who they sold them to. I tossed out their collection notices ages ago.

*edit*

I just did a little more googling on the issue. It looks like it's possible that they reported to the other two credit agencies but not Experian. They might have also just not reported at all - although it seems a little silly that they wouldn't after so long. It'll probably be a good idea to track down those debts and see what I can do. Bankruptcy seems like a pain in the rear end, and I'd rather avoid it.

*more update*

Sorry, I should have done a bit more research before posting. Weirdly, my Transunion report thinks my birthday is the same as my dad's - and that big 20k collection debt is on the Transunion report. D'OH! The 5k debt I've been sued for is not on any of the three credit reports, though.

3 Stacked Midgets fucked around with this message at 04:58 on Dec 4, 2009

Namirsolo
Jan 20, 2009

Like that, babe?
I have a friend who is receiving calls at work from a creditor. How can she get them to stop? What action can she take to make sure that they aren't endangering her job?

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CubsWoo
Aug 17, 2005

Where the big boys RAAAAAAARRRRRRRRRGH FUCK YOU

3 Stacked Midgets posted:

I've got a very interesting issue.

If it's off your credit report, it's not hurting you, but that doesn't mean they can't try to collect if it's in statute. Keep an eye on your reports and see if someone claims that debt. If nobody has claimed the debt and it's not reporting, it's probably best to ignore it until someone tries to claim it and collect/the statute runs out. It also may have changed names for some reason - any large debts you don't recognize? Dispute them. Transunion having wrong information is something you can correct - the 20k debt may not be yours legally (possibly your father's?) and they have to either prove you owe it or move it off your report.

Namirsolo posted:

I have a friend who is receiving calls at work from a creditor. How can she get them to stop? What action can she take to make sure that they aren't endangering her job?

I should put this in the OP, I guess. Have her find the address of the group who's calling her at work and write them a cease and desist letter, certified mail, with a return receipt. That should stop the phone calls. In terms of job endangerment, getting the calls stopped should help. If it doesn't, damages from job loss/personal humiliation in addition to the FDCPA violation could be considered in a small claims lawsuit, if it goes that far.

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