with a law firm. Here's my story. I ran up a huge amount of debt and decided to contract with a debt settlement company. Yeah, horrible idea, I know. I fired them and got all my money back. That's the good news. After I fired this company, I was able to settle all but two of my credit cards for reduced amounts by dealing directly with the credit card companies. (I didn't know a lot of the great advice that I've already read on this forum, and I'm hoping it doesn't come back to bite me.) Anyway, in the meantime, two of my large accounts charged off and I've been getting correspondence from the lawfirms. Whereas it was pretty easy to negotiate with the credit card companies, these lawfirms are being pretty hard ballbusters. To even communicate my settlement offers to the client, they are insisting on all kinds of personal information--where I work, how much do I make, do I own or rent my home, etc. To this point, I've refused to get into any of that with them because I don't believe they are serious about the settlement offer and really just want to use the opportunity to information-gather on me to see if it's worth a lawsuit. But I really want to settle these accounts. The problem is that I own my condo (very little equity, really) and I'm sure they'll get all excited about putting a lien on it if I tell them that. Also, I make a pretty decent income and I suspect they'll get all excited about that once they learn it. I've thought about lying about some of this stuff...saying I just lost my job, etc. but I don't really feel like doing that. Any thoughts on this or how I should proceed?
So far you're doing exactly what I would do. Congrats on nailing down your debt, by the way! You are under no obligation to furnish any information to the collectors. Yes, they probably are fishing for information. While they can dig up a lot of info on you, why do it themselves when they can convince some alleged debtors to hand it over for free? Of course, all of this could change if it turns into a lawsuit, but let's cross that bridge when we get there. Keep your communication with them relevant. Don't mention your condo, your car, your employer, or any other personal information. It serves you no benefit and has the potential to harm your cause. How long ago did you make your last payment on these cards? When did you first receive correspondence from the law firms? Did you send a DV letter to either of them?
Thanks. It feels better each one I can cross off but these last two are the big headaches. I started this whole process last October. I stopped paying all my credit cards and started sending the settlement company money every month. They took their huge share and then saved the rest. They made some very small payments to one of these creditors to keep the account from charging off. But when I fired the settlement company in April, these two accounts immediately charged off. So, best case scenario, my last payment was in October. Worse case, it was in April. In any event, both of these remaining accounts are very large (8,300 and 13,600, respectively)--there's no way either of them are going to walk without suing me first. One of the lawfirms, the one for the larger debt, was hired very soon after I stopped making payments. I want to say only a couple months. They were pretty aggressive right at first and then they started actually easing up. The other one was the opposite--didn't even contact me for a few months after the account had charged off. I think one of the mistakes I've made is trying too hard to settle with them. They basically just ignore all my offers and then call me later for the entire amount. What's a DV letter? Is that where you ask them to verify the debt? All I've ever sent them are offers of settlement. Should I make them prove the debt? I have spoken to them several times over the phone. I think I've been careful not to expressly admit the debt, but I'm sure I've said enough to implicate myself anyway. Part of me has not wanted to put them to the proof yet because I feel like that might just gear them up for litigation. Wrong?
First, a DV is a "dispute / validate" letter. It's a very simple letter that disputes the debt. It can be as simple as "Dear ___, I am disputing this alleged debt. Please validate this alleged debt. Sincerely, ____". Some people will add "It is inconvenient for me to receive telephone calls" but that's up to you. This letter bars them from attempting further collection until they can validate the debt. What exactly constitutes validation is unclear but it's widely accepted that the correct answer is "just about anything". There is no time limit; they can take 50 years to respond if they wish, but they can not try to collect until they do. HOWEVER, in order for this letter to hold any teeth whatsoever, it must be sent within 30 days of your initial contact from this particular debt collector. So if they first contacted you several months ago, then a DV is very, very unlikely to do any good. It sounds like you're in the "gray area" that I won't be able to be much help with. Settlement offers sometimes serve as acknowledgment of the debt, sometimes they do not. It's a question of state law, precedent in similar cases, and most importantly, how the judge feels about it. When I researched this matter in my own state, I found several cases where the CA argued that a settlement offer proposed by the debtor constituted acknowledgment and re-started the SOL, but the debtor successfully argued that the offer was not effective because payment was never made. Maybe someone with more litigation experience will chime in shortly, but here's my advice to you: 1) Prepare to be sued. That may cause you a flash of panic, so take a deep breath, have some coffee, and let it pass. Knowing that a suit may be forthcoming allows you to start doing your homework and get prepared early, rather than be blindsided. 2) If you've never been in court before, find your local courthouse schedule and sit in on as many sessions as you can. Even if they're not debt-related, these will help you learn how a court operates and will help make the process less intimidating. Pay attention to how the lawyers / litigants conduct themselves, how they quote citations, how they handle objections, and so on. 3) Research your state / county / local rules of civil procedure. Put simply, this will tell you how you communicate with the court & plaintiff, how papers must be formatted, what forms of evidence are accepted, etc. This is critical information. For example, if your RCP requires original documents as evidence and the plaintiff shows up with a photocopy of your agreement, that's a very good thing to know. 4) Start researching similar cases in your state. The cheap way is to Google phrases like "(your state) credit card debt defendant", "(your state) debt lawsuit", "(your state) (creditor) plaintiff", and so on, sifting through the results as you go. A better way is to do your research on a pay-for-use site like LexisNexis. 5) Don't panic. Remember that even big-name creditors & debt collectors make mistakes; your job will be to find one and exploit it. One final word -- find out where your state's limits are for small claims court. If both of these debts land in small claims then you're in luck. However, given their size, I suspect they will not. This is not necessarily bad, it just means that -- very simply -- the process will be more formal and structured. Good luck!
Thanks. I actually did panic there for a second.... when you told me to prepare to be sued though, not because I'm afraid of the courthouse, but just because I was hoping to get this done without that. If it got to that point, my thinking was to just ignore it and let them get a default judgment because I figured it would be easy enough at that point for them to prove it. However, I didn't want to show up and give them all the other information about my personal situation so they would get ideas about how to enforce the judgment. I really don't want to have my wages garnished, mostly because that would just be embarrassing for me at work. Is that a really stupid course or not?
No, don't ignore it. God no. I understand what you're saying and I see where you're coming from. But think of it this way: if you are sued and ignore it, you have a 100% chance of losing. If you show up and fight, even if you don't have a leg to stand on, well, maybe you'll happen to say the right things and get a 0.001% chance of winning. Who knows? Maybe they don't have their act together and weren't expecting you to defend yourself. Maybe your chances just went from 0.001% to 1% to 10% to 50%. And for all you know, they have nothing. Maybe they don't have the documentation necessary to prove their case in court, and they're simply counting on you never showing up. After all, this is how most debt collection cases are won -- the defendant simply ignores the case. You're also assuming that they can garnish your wages. Not all states allow this. For all you know, your employer may never find out, even if you lose the suit. In my experience, as long as you are respectful in court (watch Judge Judy, then do the exact opposite of everything they do) and follow your local rules, your situation will not go downhill. But I think we're getting ahead of ourselves here. You haven't been sued yet, so let's not dwell on the details of what may or may not happen. Take advantage of this time to get prepared. Even a day sitting in on court sessions may make you feel a thousand times more confident about your situation.
