ever getting paid after winning a lawsuit against an LLC? In particular, if a CA is structured as an LLC, and you file an FDCPA and/or FCRA suit against them and win, what are the chances of ever getting a penny from them? My understanding of LLCs is that if you get a judgement against them, the only way to enforce some kind of payment is to get something called a "charging order" against them. This puts you in the position of being an unwanted step-child where you're considered a "member" for tax purposes, but have no say over what actually gets paid out, when, and to whom. So you can be sitting there with your hat in hand waiting for your $100k judgement (or whatever) to fall into it, and at the same time be handed bill after bill for your portion of taxes owed on income that you've never touched. I've read lots of what appear to be quite powerful letters here and in related forums. But I'm noticing is that, other than some folks announcing they got a trade line modified or deleted, there are no mentions of any kind of awards or actual cash-in-hand settlements. (There are even a few posts asking about this, but no replies.) If there's little likelihood of ever collecting on a judgement you might get even if you were to win the legal battle, it sounds like you'd lose the war. Why waste so much time and effort if the chances of collecting might be minimal? (I've been pondering my situation where several lawyers have said I've got a "slam-dunk" case, but nobody will take it on contingency. Why would that be??? Might it perhaps have something to do with their experience collecting awards in situations like this? just thinking aloud...)
The problem here lies in not understanding how federal courts work. What you say might have some validity in state courts but even there the remedies are clear but the process is different. In federal court, such matters are usually settled by agreement reached at the Rule 26(F) meetings. Once the settlement agreement is reached and the judge approves it the losing party usually pays up pretty quickly, usually within a week or two after the agreement is signed by both parties. In the event it don't happen the winner goes back to court and asks the court to expedite the matter in one way or another. The judge will then call in the other party and find out what is taking them so long to complete the agreement terms. If it is determined by the court that the stalling party is acting in bad faith then the judge can order corrective measures and time limits for the completion of the agreement. I can assure you that the settlement check, if any, will not take long after that because the offending party dare not drag their feet any longer. In state court the winner may have to go through garnishment proceedings to collect. If the losing party is in another state then the process might be long and costly. One would probably be better off selling the judgment to a judgment recovery company in the loser's home state.
Oh that would be rich! Getting a CA on the CA's ass. That might make waiting for the money worthwhile...
I suspect you may be making a mental mountain out of a molehill. On the cases I have won against LLC's I have had no problem collecting promptly.
That's normally very true, and especially in federal court. However, I've seen several cases where the persons have gotten judgments against debt collectors in lower courts and their demands for payment were totally ignored until they filed for garnishment and then their defendants came forward and filed motion to vacate the judgment and the judges routinely grant them forcing the plaintiff to go to appeals court to get the judgment reinstated. I've even seen them appeal that decision up to circuit courts. So it is not always so easy in lower courts as it is in federal courts.
This is quite informative, guys. Thanks. However, it doesn't really lend any insight into what might happen if you win a case against an LLC that just doesn't want to pay. It reminds me of the two faces I've heard regarding "piercing the corporate veil". Several lawyers have told me that, under normal circumstances, it's incredibly difficult to do. Asset protection attorneys, however, say it's fairly routine (thus encouraging you to buy their particular snake oil).
No. Here are two guys saying opposite things, which reminded me of what I've heard said about piercing the corporate veil. Here, one guy says "I've never had any problems collecting from LLCs", and the other says, "I've heard of many people who've had trouble collecting from LLCs." The reason I asked in the first place is because there are some good reasons for using LLCs for asset protection purposes that make them somewhat judgement-proof, as I mentioned earlier. Now, consider that it seems to be fairly normal business practice for CAs to actually be TWO business entities: one that purchases the accounts, and another that attempts to "service" them. (Why do they do it that way?) I dunno why it is, but when they're both LLCs, it would seem it could be challenging to enforce a judgement against one or the other of them. (Which one do you go after, anyway? If they can't validate, the one who bought the debt might be liable. But the other might also be liable, too, for trying to collect it.)
You go after the one who sent the collection letter. This is why et al is in legal docks. suing an Inc or llc is the same. Collecting isn't hard .
