I'm Being Sued

The details don't matter, I've been in business many times and been sued before. This is in civil court, not small claims. It involves a small debt ($500) that I'm not responsible for. Its now blossomed to $1200, which is ludicrous. The original debt holder never filed, they knew there was no case and threw it in the waste bin. Along comes a bottom feeder collection agency and buys the debt for pennies on the dollar and has paid a fee to the court to sue me. I haven't even been served yet, I found out about it because a lawyer who gets court info sent me a letter last week informing me of the suit, and is wanting me to hire him. The hilarious thing is, I just called the court and they have my address wrong. But I'm sure I'll get the summons in the mail, the PO knows who I am and will send the thing here regardless.

These collection agencies depend on 90% of the people they sue never showing up. I'm told that the best thing to do is be in court, and demand to see the contract I signed that says I owe the money. 90% of the time they won't have it, and the judge will dismiss the case. This whole thing is bogus, I don't owe the money, anybody use that defense before, of demanding the contract? I'm golden anyway, I have no employer and no bank account they can touch, I just want to f**k with them.

It's up to them to prove the claim. They have a pretty high hurdle to jump over. If the time is worth spending on this exercise then by all means, make them jump those hurdles.

I was under the impression that you don't owe THEM anything. It's up to the original creditor to file the claim.

It depends. Some collections agencies work for a (big) fee, and work to recover money for the original creditor. Others buy the debt for a fraction of its face value and then fight to recover the debt for themselves. The latter is becoming more popular as companies are working to remove bad debt from their books, and the collections agency also usually ends up slightly better off via that method.

That lawyer may not be strictly kosher.

Is there an underlying judgment that was obtained by a creditor such as a default judgment where you never appeared? Or is this simply someone sent you a letter demanding payment of a non-existent debt and some collection agency bought this non-existent debt and is trying to collect on it whether they think it is bogus or legit?

Is the court a convenient one for you?

Being judgment proof is not always as iron clad as debtors think. Judgments last a long time and can often be renewed.

I'm assuming that there was no original judgment issued, and that this is a new case appearing in court. Of course, the first thing you want to make sure of is that there is actually a court case against you. Make sure you get the case number.

When it comes to debts, there is a national law of some kind that requires the person issuing the debt to secure your original signature as proof that you agreed to the debt and agreed to repay the debt. Collection agencies generally do not have this original signature. One of the ways that so-called "credit fixers" work is by removing the debts by collection agencies using this trick. (If you have a debt that has gone to a collection agency and is appearing on your credit reports, you can require that the collection agency provide prove of the validity of the debt by providing your original signature. When collection agencies buy debts, they normally don't get those signatures. Since they can't provide proof, they have to remove the debt from your credit report.)

You are right that most suits of this kind are generated in bulk by debt collectors who know that a large percentage of the people will not respond, and they will win by default. Once the have the court ordered judgment, they can then garnish bank accounts, paychecks, or file liens against property.

I would not wait until you get served. Some of the less reputable companies either will not serve you, or will purposely attempt to serve you at the wrong address you indicated is at the court. Once they are unsuccessful at serving you, they can appear before the judge and claim that you are either unserveable, or are evading being served. Depending on the judge and the court, they may tell the company to either serve by publication or serve by delivering the documents to your door. The second method is bad, because if they already have the wrong address, they will simply tape the documents to that wrong address, and you will consider to have been served. If they serve by publication, this is also bad, since it's possible that you do not subscribe, nor do you read the classifieds, of every publication within your area. Most laws on service by publication are fairly vague, and they can get away with putting the ad in a small paper that very few people read. Naturally, the laws in your state may differ, and not all of this may apply to you. But I know that in Arizona, the only court documents that are required to be served in person are Orders of Protection. All others can be served by publication, by proxy, or, with a court order, by leaving the documents at your front door.

Another reason to not wait, as mentioned earlier, is to make sure there actually is a suit against you filed with the court. Many years ago, I had heard of debt collectors that also had a separate company that utilized lawyers to help defend people from debt collectors. Basically, the same situation you are describing would happen. Normally, the lawyer would say that they could probably work out some kind of arrangement to have the amount you need to pay reduced. The people, thinking the lawyer was on their side, would usually agree, and then the debt collector would "drop the suit", even though there never was one in the first place. I haven't heard of anybody doing that recently, but it wouldn't surprise me as it was a fairly effective trick back then.

Quote: EvenBob

anybody use that defense before, of demanding the contract?

I once stiffed a company by doing this, that I would have paid. Long story with that that I won't go in to, it was a long time ago. But the bottom line is that the matter got so old they could no longer provide such things as a signed contract. They wound up telling me to forget it after all.

Edit: I think you should hire an impartial attorney for an hour and get qualified, unbiased legal advice. Not from a guy who found your name on court records, but from someone of your own choosing.

Quote: konceptum

Many years ago, I had heard of debt collectors that also had a separate company that utilized lawyers to help defend people from debt collectors.

Heh, my first thought was: this "lawyer" probably wants a "fee" to "defend" you. (is code for a flunky from a collection agency feeding you some bs)

Here is a timely article I just read this morning:
http://money.msn.com/debt-management/is-that-debt-collector-a-scammer-bankrate.aspx

Here's the deal with these collection agencies. They buy a small debt the big corp's don't want for pennies on the dollar. They file a suit knowing 90% of the time the person isn't going to show up. Some of them purposely blow the summons part to make it even higher than 90%. They then get a default judgement and immediately go after the bank account and get whatever they can and move on. Its just another form of gambling. I looked up the company who is suing me and they have a long list of people who say they never got served and woke up to find their account frozen. I did more research and found this happens everywhere, they never got served. The agency's are bottom feeders, they found a good gig and make a living. I'm going to act like I have no idea what they're talking about in court and demand to see the original document I signed. They won't have it, and that will be that.

Quote: konceptum

I would not wait until you get served.

You wouldn't wait for what? I can't do anything till I'm served, can I?

Actually you can and there is often an advantage to being first to file ... but good luck trying to find some of these. See if they even have an agent for service of process or an address that isn't a mailbox leading to another mailbox. They often use pass-through bank accounts where all the deposits go off-shore instantly.

Quote: FleaStiff

Actually you can and there is often an advantage to being first to file ...

First to file what? They already filed a suit against me, thats what this is all about.

Couldn't you go to the court and acknowledge that you have been served? That would keep them from "faking" an attempt to serve you.

In our county, records for civil court are online pretty quickly after they are filed. Your county may be set up like that and you may be able to find the case #, etc. to help "get served"...since you aren't running from the lawsuit, might as well make sure they don't pull any of the tricks mentioned above.

Once you are "served" you can answer the summons and demand the proof. They might drop it at that point before you ever go to court. Since they are scum, you need to follow it very closely to make sure they don't try any other tricks...

I don't think most of them want to actually sue; most want to hassle people into paying them off.

They're suppose to stay within the relevant laws, but some certainly skirt it, or have outright violations.

Quote: rxwine

I don't think most of them want to actually sue; most want to hassle people into paying them off.

Not true. These people make their living buying junk debt and freezing peoples bank accounts. Its all in the math. By 50 debts in the $500-$1500 range for 20% of their face value. Pay the fee to sue them, 90% don't show up, and those that do show you win most of too. Freeze the bank accounts, and get what you can get. Some will be a few dollars, others will be enough to pay the whole judgement. You never have to call the people, or see most of them. If you're always filing, always going to court and always freezing accounts, you have a steady flow of cash coming is all the time. Especially in this Depression, people are defaulting on loans and credit cards by the thousands a day.

Quote: RonC

Couldn't you go to the court and acknowledge that you have been served?

Already called the court, they want nothing to do with me till I've been served and the court date is set. She said to call back ever 10 days to see if anything is happening. I'm way better off taking these people by surprise, let them think I'm just going to be another of the 90% that doesn't show up. I've been to court a few times, as the one suing. I think people are scared to go when they've been sued, like they'll be arrested or something.

Quote: EvenBob

You wouldn't wait for what? I can't do anything till I'm served, can I?

My point was that if you wait until you get served, you may never get served (because they will do a service by publication or proxy or something else), and thus you will never be "officially" notified of the suit. Then you'll miss the court date, and a judgment will get filed against you.

If you know about the suit, and know the case number, you can be proactive. Someone else mentioned going to the court and acknowledging the suit. You don't really want to do this. You want to keep tabs on the suit. At some point, the people doing the service will have to file a Notification of Service, which proves that you were served with papers. You want to watch for this. Without a Notification of Service, the debt collector has not formally informed you of the suit, and thus it cannot proceed.

Once the Notification of Service has been filed with the court, then you want to file a response. Your response will not only be that the debt is not yours, but that no actual service was performed. You could also use this as an opportunity to counter-sue, although I wouldn't recommend it. However, most courts and judges will REALLY be interested in knowing that a Notification of Service was improperly filed. Process Services can lose their license for doing such.

Quote: konceptum

If you know about the suit, and know the case number, you can be proactive.

The woman at the court said I should call about every 10 days to see if there's a trial date. I have 21 days after the date its served. My main concern is not missing the court date. These people file claims for a living, they've seen everything. I'm not really into arguing about being served, I'm more concerned they have the actual document I signed (not a copy) to prove I owe the debt. I sued a guy I loaned money to years ago and I had the contract he signed to prove it, if I hadn't had it the case would have been thrown out because he was denying the whole thing.

Look, here's what to do, how to play it.

Go to the court and pay to have the clerk make you a copy of the summons and complaint.

Then prepare two documents: acceptance of service, and Answer to the Complaint.

File them with the court and mail a copy to the Plaintfiff at the address stated on the summons.

Then wait.

If the plaintiff wants to move it forward to trial, simply show up at trial; in order to prevail, plaintiff must prove their case, i.e. the agency has the burden of proof.

That means in all likelihood that they'll have to call the original creditor as a witness: as assignee of the claim, they have no knowledge of the underlying facts.

Should be fun.

Quote: EvenBob

Not true. These people make their living buying junk debt and freezing peoples bank accounts. Its all in the math. By 50 debts in the $500-$1500 range for 20% of their face value. Pay the fee to sue them, 90% don't show up, and those that do show you win most of too. .

Well, you claim you aren't a good target, since they don't have proof, and for whatever other reasons. So why would they sue?

Here's what I found. (which I count as good as anything else I read on the Internet)

Quote:

What are the chances of a lawsuit?

If the debt still belongs to the original creditor, a third-party collection agency cannot file a lawsuit. But if the balance is large, the debtor is being resistant, and if there are indications that the debtor has vulnerable assets, the agency may send the account back to the creditor with a recommendation to sue. Each creditor has its own criteria for the decision; for example, the amount must be substantial (often $1500 or more, at the very least.)

Collection agencies tend to avoid sending too many accounts back, since it suggests that they aren't very good at collecting. Also, letters and phone calls are much less expensive than going to court.

If an agency has bought a debt, then they have the ability to sue, but by that time, the debt is likely to be rather old, and the agency doesn't have much invested in it.

Collectors tend to focus on fear and intimidation, since those things can work much more quickly, cheaply, and efficiently than legal action.

Lawsuits certainly are brought against plenty of debtors, but not nearly as often as debtors fear. There is a big difference between, "Pay up or we will continue with collection action," compared to an actual Summons And Complaint.

If the debt is substantial and recent, and the debtor appears to be a good target (e.g. reasonable assets or income), a lawsuit is a real possibility. If you are served with legal documents specifying a particular court, hearing date, etc., you should see a qualified attorney immediately. That area is beyond the scope of this FAQ.

>>If an agency has bought a debt, then they have the ability to sue, but by that time, the debt is likely to be rather old, and the agency doesn't have much invested in it.>>

Thats whats happening here. This agency never made any effort to contact me. Major banks have no way to sue on small amounts like $500, so they write the debt off and sell it cheaply. Since 2008 there has been a mountain of these bad debts. These agencies work on a volume basis; sue, get a default judgement, freeze bank acccounts. The clerk said it cost them $45 to file the suit. If they just back triple that on most of the suits, they make decent money. I suspect they get a heck of a lot more than that.

Quote: MrV

Go to the court and pay to have the clerk make you a copy of the summons and complaint.
Then prepare two documents: acceptance of service, and Answer to the Complaint.
File them with the court and mail a copy to the Plaintfiff at the address stated on the summons.

Thats just what I don't want to do. I want to take them by surprise, deny I even know what they're talking about, and make them provide proof of debt ownership, which I'm sure they won't have. The judge will have no recourse but to dismiss the case. My understanding is banks do not give up the original contract, they always hang onto them for legal reasons. They give the agency permission to collect the debt, but don't give them the actual proof they own it, because legally they don't. Most people don't know this, and will stand there and stammer that, yeah, its their debt, they're responsible for it, aw shucks. Just dummy up, make the agency prove you signed the contract, and the actual contract, NOT a copy, which could be altered, is the only proof there is, if you're not confessing to it.

Look at ME's reply. There is definitely a whole bunch of FDCPA violations here, and you (the consumer) are entitled to punitive damages of $1000 per violation.
If you are going to respond to their suit (I would not, but that's me) without being served, be sure you counter sue. There is money to made be here.

That is if the debt indeed does not exist, as you said initially (your last post does not sound so sure anymore, it seems to be leaning more towards the debt being real, but the contract not released by the bank. Don't count on it BTW, it is an urban myth. If the agency is legit, and the debt is real, they will have the proof, but there are still ways to fight it, at the very least, because they are in violation of FDCPA).

In either case, be sure to check out creditboards.com, especially their forums. Tons of advice there.

Quote: EvenBob

I'm more concerned they have the actual document I signed (not a copy) to prove I owe the debt. I sued a guy I loaned money to years ago and I had the contract he signed to prove it, if I hadn't had it the case would have been thrown out because he was denying the whole thing.

I think copies bear more weight now than they used to. Just like faxed and emailed contracts are valid, and electronic signatures are now binding...

EvenBob, you said "I just want to f**k with them."

By NOT doing anything, no f**king will occur.

F** or be f**ked.

Found out thru some research that the collection agency and a local law firm specializing in collections are one and the same company. The attorney who filed the suit is a 27 year old kid who got his law license 3 years ago and has a middle name of Mohammed and an Arab sounding last name. On the local lawyers ratings page he has a rating of 5.3 out of 10, which means he's a low level moron. He went to law school at some hick college I never heard of. Apparently this law firm specializes in Chase Bank debts and if you show up in court and challenge them for proof that you owe anything, their case falls apart. One guy who did this claims the lawyer was so tongue tied he could barely speak. They have to be able to provide the contract I signed with Chase in order for them to make the legal link between me, them, and Chase. If they can't do that, they have no case.

Somebody on this thread said I should contact the legal firm. There are people who have done this and their calls are never returned. This firm ignores any kind of contact you try and make, even legal contact. One guy said they're a 'bad debt mill', like a puppy mill, they churn out the volume and aren't concerned with the details.

If you can prove they violated the FDCPA and you file a countersuit against them, you can be the one leaving the court room with a judgement in your favor. You'll also make them answer your complaint, which will be a major annoyance to them. If they get you in court and you beat them with your defense (produce the contract) you've let them off the hook for the FDCPA or you'll have to go back and sue them in another action. I can't see why getting it all done at one time is not a good idea...but I'm sure someone will explain it to me!!

Quote: RonC

If you can prove they violated the FDCPA and you file a countersuit against them, you can be the one leaving the court room with a judgement in your favor. You'll also make them answer your complaint, which will be a major annoyance to them. If they get you in court and you beat them with your defense (produce the contract) you've let them off the hook for the FDCPA or you'll have to go back and sue them in another action. I can't see why getting it all done at one time is not a good idea...but I'm sure someone will explain it to me!!

Yes, other people have tried exactly that and it was a frustrating experience. They filed before they went to court asking the finance company to provide the link between them and the debtor and were buried under a ton of paperwork by the lawyer. We're only dealing with $500 here and interest, its not worth my time. What I'm hoping is they'll see its not worth their time when I demand to see the contract I signed and just not pursue it any further for $500 and interest.

This thread unfortunately says a great deal about the moral fiber of some Americans these days.

Quote: Keyser

This thread unfortunately says a great deal about the moral fiber of some Americans these days.

Spoken like somebody who hasn't got all the facts and has the moral fiber himself of a street hustler and con man. Who are you kidding, Snowman. This is the guy who promises people the moon and the stars to clock wheels for him, and only pays them if he makes a profit on the wheel, which he almost never does. Moral fiber indeed..

I don't see the need to clock anything. I have a watch and it works just fine.

Quote:

Yes, other people have tried exactly that and it was a frustrating experience. They filed before they went to court asking the finance company to provide the link between them and the debtor and were buried under a ton of paperwork by the lawyer.

It does not make any sense. Either they have a contract with your signature or they don't. What "ton of paperwork"?
If the contract (for $500 bucks, mind you) is "a ton of paperwork", and they have it, they can "bury" you under it when you ask for it in court as well, and if you are going to be buried, it is much better for that to happen before the actual hearing, when you still have some time to "undig" yourself. If they don't have it with them in court, when you ask for it, they can get the hearing rescheduled. Even if the judge dismisses the case because they don't have some papers with them (almost never happens), they can still refile, after "burying you" under a ton of paperwork at a later time. This is not a criminal case, you know, double jeopardy does not apply.

Quote: EvenBob

We're only dealing with $500 here and interest, its not worth my time.

Yeah, that is what I was wondering about since the beginning of this thread. Are you really willing to spend like at least, half a day, probably, more in court for a measly 500 bucks?
You do not have to show up there, you have not been served. Even if they enter a default judgment in your absence (they probably will not in the first place), it can be easily vacated later, by sending a letter to the court, and explaining that you were never served.
But even if the absolute worst happens, it's just $500 ... You are going to waste way more time on it than it is worth. The only reason I could see for doing that is the desire to stand on principle, and to teach this shady collectors a lesson. But in that case, I can't understand why refuse to countersue (well, I can't in any case. Even if your motivation is just money, I can't see why you refuse the possibility to make more).

All in all ... I think, you invented this story for entertainment purposes. There is no actual suit filed against you.

Quote: EvenBob

Found out thru some research that the collection agency and a local law firm specializing in collections are one and the same company.

Isn't that a conflict of interest?
Doesn't that violate Bar Association ethics code?

Why don't you just pay the bill? You said that you don't have a checking account. Why not? Do you play this game regularly?

Quote: DJTeddyBear

Isn't that a conflict of interest?
Doesn't that violate Bar Association ethics code?

Everybody thinks that and in some states its not illegal for a law firm to own a collection agency. They have lawyers in other states working for them where it is illegal, but its out of MI so its OK.

Quote: Keyser

Do you play this game regularly?

I'm not playing any games, I said the details are unimportant. They're especially unimportant to you..

Quote: weaselman

It does not make any sense. Either they have a contract with your signature or they don't. What "ton of paperwork"?

I'm sure that wouldn't happen to me, theres not enough money involved. What has obviously happened is they file these bottom feeder cases by the dozen, get the worst, youngest lawyer they have to handle them, hope the debtor doesn't show up, and collect the default judgement. The last thing I want is for them to know I'm going to be there, I want to take them by surprise. This is fun..

Quote: EvenBob

Quote: DJTeddyBear

Isn't that a conflict of interest?
Doesn't that violate Bar Association ethics code?

Everybody thinks that and in some states its not illegal for a law firm to own a collection agency.

I think you missed my point. I don't have issues with lawyers also being collection agents.

I think it's unethical for a single firm to sue you as well as represent you.

Quote: DJTeddyBear

I think it's unethical for a single firm to sue you as well as represent you.

I don't have a lawyer. The law firm I was talking about owns the collection agency.

Quote: EvenBob

I don't have a lawyer. The law firm I was talking about owns the collection agency.

I think maybe he was combining (confusing?) two of your earlier posts, one in which you said, "a lawyer who gets court info sent me a letter last week informing me of the suit", and one that said, "Found out thru some research that the collection agency and a local law firm specializing in collections are one and the same company." Perhaps he suspected that the lawyer who sent you the letter was from that firm and was offering to represent you.

The lawyer who sent the letter is nobody in this, he's less than nobody.

I actually am aspiring to be a lawyer specializing in consumer debt collection. My ultimate goal is to start my own firm.

Yep, scum-sucking bottom feeder, that's me :)

Quote: teddys

I actually am aspiring to be a lawyer specializing in consumer debt collection. My ultimate goal is to start my own firm.

I think you're missing the boom years.

Quote: DJTeddyBear

I think you missed my point. I don't have issues with lawyers also being collection agents.

I think it's unethical for a single firm to sue you as well as represent you.

The only one the firm is suing is the debtor.

They wear the hat of the agency, not the deadbeat.

No conflict.

Quote: Doc

I think maybe he was combining (confusing?) two of your earlier posts, one in which you said, "a lawyer who gets court info sent me a letter last week informing me of the suit", and one that said, "Found out thru some research that the collection agency and a local law firm specializing in collections are one and the same company." Perhaps he suspected that the lawyer who sent you the letter was from that firm and was offering to represent you.

Yeah. That's it exactly.

And it still sounds like you're talking about one company doing both jobs.

Assuming it IS one company, then, because of the conflict if you retain him, that lawyer shouldn't even be offering to represent you.

If my assumption was wrong, then I'll retract all my comments.

Quote: EvenBob

The last thing I want is for them to know I'm going to be there, I want to take them by surprise. This is fun..

Surprises in court only happen in criminal drama movies. If you ask them for a document or evidence they do not have with them, but claim that it exists, one of two things usually happens - either the hearing is rescheduled for later time, to allow the other party to produce the document, or, in the interest of speediness, both parties are asked by the judge to stipulate to the fact existence and proceed.
The thing is, it is actually your responsibility to ask the other party to produce documents you consider relevant to the case. If you fail to do that in time for the hearing, it is not their fault. The rule of thumb is that surprises are generally not allowed. If the judge decides that you were intentionally trying to "surprise" the other party, he very well might just make a summary finding in their favor, simply to punish your disrespect to the court. Just like that. And then you can appeal, and possibly, win ... It'll take a few more months of your time though, and a bunch of your money too...

Quote: weaselman

Surprises in court only happen in criminal drama movies. If you ask them for a document or evidence they do not have with them, but claim that it exists, one of two things usually happens - either the hearing is rescheduled for later time, to allow the other party to produce the document, or, in the interest of speediness, both parties are asked by the judge to stipulate to the fact existence and proceed.
The thing is, it is actually your responsibility to ask the other party to produce documents you consider relevant to the case. If you fail to do that in time for the hearing, it is not their fault. The rule of thumb is that surprises are generally not allowed. If the judge decides that you were intentionally trying to "surprise" the other party, he very well might just make a summary finding in their favor, simply to punish your disrespect to the court. Just like that. And then you can appeal, and possibly, win ... It'll take a few more months of your time though, and a bunch of your money too...

That makes a lot of sense...and you can see some if it playing out right now in a trial that is well publicized, the Casey Anthony debacle. The lawyers have actually been chastised for presenting testimony (or attempting to...I am not following it that closely) that is different from what has been provided to the other party.

It still makes sense to me for you to get your service (though at least one person advised against it; so maybe that is not right), answer the questions, ask for the documents, and to counter-sue for the FDCPA violations. Then they will be required to answer that suit. If you want to make it harder on them, do something like that (or whatever is standard procedure in your court system...you can find that out). If you want to possibly look foolish in court at best, and lose the lawsuit at worst, because you didn't follow the right course of action and you anger a judge...do it your way. Enough people here have advised against that...maybe you should do a little research before jumping off the bridge...or not...

Let us know what you decide and what happens!!

Quote: RonC

If you want to possibly look foolish in court at best, and lose the lawsuit at worst, because you didn't follow the right course of action and you anger a judge.

Do I sound like somebody who doesn't know how to research? I now know exactly how to respond to the summons, what to say in my answer, and exactly what to say in court. The 'surprise' will be that I show up at all, because most people don't. You have to put the burden of proof on them in the whole process, thats what they aren't expecting. Thats the surprise.