I was a collections attorney for the largest US banks. You know how people get sued for credit card debt? I filed thousands of these suits a month. AMA.

After 7 years the bad debt is off of your credit report but debt collectors will still attempt to collect the money. What legal rights do they have to pursuing the debt and what's the best thing someone can tell them when they call? I always went with I have no idea what you're talking about please don't call back.

If they're a debt collector and not the original party you can give them written notice not to contact you under the Fair Debt Collection Practices Act. If they contact you after that you can sue them for breaking the law.

Will most attorney's take the case for percentage of settlement in these instances? During this period, can you still request it be knocked off your credit report?

Most attorneys will ask for a cut, yes.

FDCPA doesn't handle credit agency reporting, but you can always dispute charges yourself via the federal free credit report website.

If you tell them not to contact you, are they still able to just sell that debt to another party? If so, how often does that happen?

Fairly often, they can sell your debt several times over.

When they do this, are they able to tack on the additional fee's associated with the new debt collection agency?

Generally not. The fees only come in when sent to a law firm. Interest, however, continues running.

What was the saddest case you worked on?

There are a few sad ones that blur together for the same reasons. I had a few cases where a person maxed out their credit cards to pay for healthcare for their loved ones who eventually passed away. Many are left a widow/widower while having hundreds of thousands of dollars in debt.

I had a case where I called the guy to discuss his debt and he informed me that his wife died the day before and he would call me after the funeral.

American healthcare, huh? :(

You know it.

What do ou know about bird law?

Not enough to fly by.

What was the salary like at such a place?

50k-100k.

If you owe money how would you suggest people delay/manage the collectors?

It really depends on what your specific situation is and what you hope to accomplish. If you're dealing with in-house collectors for the bank, your best bet to prolong the process is to enter into a payment plan. That will stop the debt from being transferred to a debt collector or debt collection law firm.

Once it's in the hands of a debt collector or law firm then the Fair Debt Collection Practices Act (FDCPA) takes hold and a few more options open up, which includes filing a request that they no longer contact you. If they violate this request then they'd be liable to you for breaking the law. Keep in mind, doing this would mean they'd have an incentive to file suit.

He was asking for the secret word to get rid of debt.

"Banana Truffle"

Was there an amount owed where you'd just say "fuck it" because the amount you'd actually be able to collect was less that what you'd have to pay to collect? Or did you (or the Bank) just say "we'll gladly spend $2,000 to collect $400 because we can."

I assume the latter.

No bank would ever send a $400 debt to collections because it's not cost-effective. But, here's the dirty little secret. A bank would write off the $400 debt, send it to collections, charge an automatic legal fee of $600, tack on interest, and then filing fees for court costs and boom, you have a $400 debt that balloons into a $2,000 debt over the course of a few months. Interest is by far the worst part of it.

You can imagine the shock when a debtor gets a phone call telling them that they now owe $5,000 on a credit card that had a $400 limit.

...and then get sent a 1099-C from the Bank. It's a nice racket, this.

Most of the time it wouldn't matter because the bulk of the debtors were insolvent, so it had a minimal impact on them. The 1099-C's purpose is for people who have the means to pay the debt back and instead are screwing over the system to get rich without working.

Wait, it's possible to get rich by screwing over the system?

There are some people who will max out their credit, move to another country for 7 years, live like kings, come back, and repeat. So yes, it's possible.

live like kings? Like how much money can you get credited ... ? 7 Years in south america living like kings should still be around 200k dollars?

You can live like a king for less than $100k in many countries. Not saying they're the best countries...

Your firm never sued a bill less than $400?

My firm sues for anything over $250.

We also sue bounced checks from Foodtown. Sometimes the original check was only about $20.

We were $1k and above.

When banks write off the debt, then try to collect on it, isn't that double dipping? Don't they get a tax credit for the write off?

I don't know the taxation implications, but I imagine they have to report what they collect as income.

But hey, who are we kidding? We know they're going to end up paying little to no taxes in the long run.

Is there one particular case you filed that stands out in your memory as wrong or unnecessary?

The fraud cases and the debts due to healthcare costs. Those just felt terrible.

What percentage of the people you tried to collect from declared bankruptcy?

Roughly 10-30%. Bankruptcy will often times put the kibosh on the collections process. I didn't practice bankruptcy law, so I don't know the exact effect bankruptcy would have on a debtor's rights, but I can tell you that once we had a suggestion of bankruptcy, the collections suit grinds to a halt.

How many decibels should your voice be when you declare bankruptcy to make it official?

At least 10. Make sure you puff out your chest too to make it official.

I have a friend who's mother died. The family found years later that she owed $4k on a credit card. The credit card company then sued my friend for the debt because his mother left him the house in her will.

Since there is zero earned equity in the house (she bought it zero down 6mos before she died) they now have a lien on my friend's house & he will probably lose it.

Time for the question: Is it common to go after family members for the debt of their dead relatives? Especially if the family never benefited from the loan.

Under what technicality is this process legal?

Your friend needs to get an attorney. Now.

As for your other question, collection agencies would often contact surviving relatives and try to make them feel obligated to pay their dead relatives' debts. Nothing illegal with the creditors making a suggestion to pay it, but there usually aren't any laws that obligate a person to pay their relatives' debt.

But, I've heard of some collection firms kindly requesting that a person pay their relative's debt a little bit, and that person will make a payment because they feel obligated. The firm will then use that payment as evidence that the person assumed the entire debt and should now pay for everything. Bottom line, don't ever pay a relatives' debt. Ever.

in the us you inherit wealth but cannot inherit debt? that seems shady ..

You can inherit a person's wealth AFTER their estate has answered for its debts. So, if an estate has more debts than assets, an heir inherits nothing.

How does this apply to spouses? Spending from a joint account?

I would presume that if it's a joint account you're liable, hence, joint. But if your spouse in their own name racks of up debts they can't pay and dies or whatever, are you still obliged to pay for it?

If it's say, your parents, that debt would become a lien against the estate around here. If you accept the estate as inheritance you have to settle its debts (but you don't have to accept it). But I'm not sure what US law is like on this.

*purely curiosity. not asking in any sense for legal advice.

Joint means both would be liable. If it's part of the estate, the debtors would have to get their money through the administration phase of the assets. An heir would not automatically be responsible for the debts incurred by the person who passed away, but the creditors would have a shot at the estate's assets.

What is the best way to handle a collector contacting family members? I've had family members receive multiple calls from a collector, they've stated that I don't live there (which is true) and to not contact them again. This, however, has not stopped and reached levels of harassment in my opinion.

FDCPA no contact letter. After that, keep a record of the calls you receive and file a suit against them.

Wouldn't a collector essentially bank on the fact that one isn't likely to file a suit because of the costs involved? It's easy to say, "just file a suit" or even say to a collector, "I'll sue you," but doing it is a different story. Unless I'm unaware of the File a Suit kiosk in the mall.

Collectors can get in serious trouble for violating the FDCPA and they're aware that there are enough resources available online that would allow a debtor to file suit pro-se with a little bit of research. I believe that a judgment pursuant to FDCPA entitles the prevailing party to court costs too. There are attorneys out there who do nothing but file FDCPA suits against banks and make a decent living on it.

Do you know how much one usually wins in this sort of suit?

If you document the evidence and they break the law, there's a good chance you'll win.

Edit: A couple thousand, usually.

I think trashboy is asking about how much money you can win.

Noted.

Oh hi!

I have a $200~ dollar debt that's been floating around for oh, about 4 years now. The history is that I overdrew I think exactly $0.02, told them to fuck off and close the account (since they happily tacked 35 extra bucks on it).

I still get calls on it to this day -- How would you suggest I proceed? Is it enough for them to take me to court?

Well first, they're likely charging interest, plus fees, so the principal is likely at least $500 by now. They could send it to a collection firm and tack on attorney's fees, and inflate it to above $1,000. That's the bad news.

Good news? You're on the cusp of being outside the statute of limitations depending on your state. Look up what the limitations is for debt and see when the cutoff date is. Also, if they're a collection agency and not the actual bank, send them a FDCPA no contact letter and that should stop the calls.

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About 3/4 of the cases were from banks, the others were from "debt-buyers" (look it up). Most of the time, banks have a rather efficient system that lets them readily prove their cases. When we would get files, we would get all the necessary documentation that would allow us to prove it, and banks of people who's sole responsibility is to act as a testifying telephonic witness at trial.

Keep in mind, debtors could throw a monkey wrench into all this merely by demanding that the trial take place in person and that the bank reps must personally show up to the necessary proceedings. Banks don't like flying people across the country just to pick up a few thousand dollars.

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The prove it part usually isn't hard for the banks. It's getting the bank's warm-body needed for a trial or mediation that really slows the process down.

Does the bank actually have to appear? I was under the impression that they could just have a mediator represent them if the debtor bothered to even show up in court.

It always depends on your jurisdiction, but a mediator must always be an impartial third party that helps to facilitate a settlement and cannot directly represent a party in the case. Some courts allow the bank to appear over the phone or they'll even waive the appearance completely. Other courts require a bank rep to appear in person.

That's interesting. I thought that was the job of a mediator too but when I settled in court (in Mass.) with Capital One it sure seemed like the mediator was not impartial. I mean, it was just me and him in a room so I'm not sure what he was mediating, exactly. I was also under the impression that the plaintiff needed to appear in court so I figured I might be able to win just by showing up (the other ten people on the docket didn't bother). Is it the kind of thing where I would've had to ask the judge directly to have the plaintiff appear in court and if I don't say anything I waive that right?

I can't speak for Massachusetts law, but generally a plaintiff can appear through its attorney and not have to appear during most court proceedings. Mediations and trials can be different.

The fact that you showed up is better than most who don't and have their case defaulted.

So what is the saddest case you've been working with?

Husband spend all his money on cancer treatment for wife. Wife dies. Next day I call him. Don't think for a second that an attorney isn't a human being and doesn't feel absolutely awful in that situation.

Ugh. I owe about $6,000~ in Car / Bank / Medical bills. I currently am out of work and just retreat whenever I get collections phone calls because I nearly have a panic attack. I feel like there's no use talking to them being that I can't even afford to pay installments right now. This thread makes me feel bad :c

Don't feel bad, everybody goes through rough patches. If you can get access to any kind of lump sum (~2,000-3,0000) you could be able to settle everything completely. For the time being, send them an FDCPA no contact letter to get them to stop calling.

does sending an FDCPA no contact letter prevent them from seeking litigation collection?

Thanks! I used to be very good at managing my money but ever since my boss didn't pay me for a month, I quickly had went through my meager savings and with all the late fees the bank has charged, losing my car insurance and my discounts, my boss put me in a huge financial bind and am only now seeking some way of suing her but my issue is providing proof. Before I was just juggling my debt but paying it, as opposed to now where all the things have dropped on to the floor.

FDCPA no contact letter does not prevent them from filing suit.

Have you ever heard of pay to delete? Its where you negotiate a payment of your debt, but in the terms, you require the debt be lifted from your credit. Did you see this tactic used, and if so, how successfull were the people in their use of it?

My firm didn't use it. We would do payments on a settlement in full, but this wouldn't affect their credit report.

which case was your favorite to take to court and why?

My favorite case involved a situation where I was against the bank. My client had a $10,000 credit card debt and a lawsuit was brought against him. He was a family friend so I agreed to take care of it for him. I answered the complaint, filed some discovery, and scheduled the case for mediation.

The day before the mediation, the bank's attorney called me to try to settle it, I declined and told him "we'll see you tomorrow, don't forget to bring your corporate rep." He paused and asked if I was serious. I replied that I was as the local rules required a corporate representative to attend. The bank was in Nevada, the court was in Florida. Plaintiff's counsel informed me that there was no way that they were going to fly in a person last minute. I explained that was fine, but since they weren't going to comply with the rules, I would move for sanctions, including attorney's fees of having to drive 300 miles and attend the mediation (~2,500).

He dismissed the case that day.

Here are a few:

1. Did you ever deal with cases where you thought the person deserved whatever they were getting? If so, why?
2. Were there any cases where someone's case was thrown out (i.e., they were given more time/leniency)? What would cause that?
3. How much debt are we talking? What was the most common amount? What were the largest/smallest amounts you can remember?
4. Do you feel like the people doing this were mostly just doing their own job or was it more like what you'd say in a movie where they were purely self-interested, openly horrible people? Did the type of person change as you moved up the management chain?
5. It looks like you're against this practice now; what would you suggest as a better way to handle debt, credit, etc?

1. Yes, I had one debtor who owed $20,000. I looked up his assets and discovered a beach-side mansion in Miami with a yacht bigger than my house parked outside.
2. Judges can be sympathetic for the common man, so yes.
3. Accounts ranged from $1,000 to $125,000.
4. Mostly good, decent people. Every now and then you'd get real "go getter" collectors who made it their mission to break a new record for the month. It became a sort of game to them.
5. I'm not against the practice per se, but it needs to be much more consumer friendly and the debtors need to be informed. People need to research the law.

Taking with a grain of salt that every situation is complex and different, and that any answerto this question does not constitute legal advice,

When it comes to an individual being sued, how likely are they to be able to fight a suit on grounds such as chain-of-custody of the debt, proof of origin, etc?

Very hard to fight when it's first-party and the lawyer is representing the bank itself. A little easier when it's third-party and the creditor is a debt buyer.

Not to say that you can't win. There are plenty of tricks such as requiring in-person appearances by plaintiffs at the appropriate proceedings.

If I understand correctly, under the FDCPA, the debtor can require the collection agency to prove every penny owed, line by line item. Is this correct? And if so, how likely would an agency be able to do this once the debt has been sold and passed around several times for the past 7 years or so?

Not just under FDCPA, but under your state's laws, they need to prove what you owe them in order to prevail in court. Keep in mind, however, this can be very easy, depending on your jurisdiction. In my practicing states, it was as simple as attaching a bill to the complaint and stating that you didn't dispute it.

The 7 years thing though, that seems like it wouldn't be permitted due to statute of limitations.

Any chance you know which states have the most lax/tight legislation on proof? I am assuming (or speculating) Northeastern states and CA the most and the south central states the least.

Not sure off the top of my head. I recall that Kentucky has something absurd like a 15 year statute of limitations for written contracts.

Just some personal observations from a small rural town in northern Nevada.

My GF was just 6 weeks ago sued for a credit card debt that a collection firm in Las Vegas claims to own. This county has the volunteer police serving the notices and collecting a fee for it. She was served on a Monday. I asked him how many people he was serving that day. His count: 28. He would not answer if all 28 was from the same firm but this was an astute question on my part. I got the impression that this legal firm does this in batches when they have clients in a particular area.

A trip to the court resulted in a lot of volunteered information about our rights and responsibilities via handouts. She is 70 and retired with no assets of note. Her mobile home and property is homesteaded and therefore exempt. Her pensions are exempt. A vehicle valued to $15,000 is exempt. Personal property to $15,000 is exempted. A vehicle used in business nets an additional $4,500 exemption so the truck used for our chicken raising might count.

She did file a response with the court and the creditor within the 15 day limit following a format given her by the court. With that response she included the page of exemptions that Nevada permits. In her case it appears that merely filing the responses in a timely manner will protect her few assets making bankruptcy unnecessary. Any judgement would be worthless as she has no assets or ability to pay.

My point is: The collection companies do not do these filings one at a time but in batches to cut down on expenses and hope many people will fail to file a response so the collection company can obtain a default judgement. It appears that this process is largely automated.

Often the elderly can have much of their personal property protected by law. Pensions and retirement funds can be protected. Nevada permits up to $550,000 in IRAs and 401(k)s. A house to $550,000 or a mobile home in a park (I don't remember the amount offhand). The local senior center also has a lawyer who assists the elderly in cases like this--she is the one who advised my GF that bankruptcy was not necessary and to wait out the statute of limitations for debt collection.

My GF is a military widow and was swamped with bills when her husband died. She lives month-to-month so repayment would be a burden to her. LOL, one of the creditors is Bank of America for $44,000.

You have a pretty good understanding of the process. People are sued in huge batches and the goal is to collect the most amount possible on average, not against each account.

How long does it take before the bank just says fuck and decides to settle with the guy in debt.

It's a process. The bank will usually try to collect in-house, but after a period of no success they'll write the debt off, which gets them a tax break in the process, and outsource it to a debt collector or law firm. Generally, suit will be filed about 3 months to 2 years after the debt was written off.

Can you talk about the difference (if any) between settlement and payment-in-full? How does it matter to the individual? Do you know who does the credit reporting and how to negotiate more favorable reporting? Are there situations where it's better to pay more than to take a settlement?

Settlement allows you to get a discount on what's owed, whereas payment-in-full means you paid back every cent they said you owed. The main difference comes on how it's reported to the credit agency. Paid in full would be better from that standpoint. Keep in mind, however, you could end up paying a lot less via the settlement route.

Is there any negotiating that can be done with collection agencies? I have heard that you can settle for less than you owe.

Yes, ALWAYS negotiate. Tell them you're in poor health, tell them you have a lot of debt, tell them all the ways your life is terrible. The worst your life appears, the greater authority they have to negotiate your debt down.

Aside from Capital One, are any banks dumb enough to pay an attorney to try and get say, less than $1k? It seems like if your debt is small enough it would cost them more money trying to collect it in court than to write it off. Especially if it's a debt collector that bought your $700 debt for $100 or whatever. Also, when does the 7 years statute begin? From the last charge on the card? When the account was closed by the bank?

Generally, they'll inflate any debt less than $1k by adding attorney's fees, and interest to get it above the threshold. Regardless, banks realize that they're going to lose money on some accounts, but they recoup that through other accounts and the interest they charge on paying debtors.

But once they sell your debt to a third party they can't really do that, can they?

They can and do.

Age range? Where did you go to law school? How did you get involved with this practice?

30s. I went to law school in the SE, it was my first job after graduating.

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I don't know enough about student loans to give you a definite answer but I do know that student loans last for much longer than credit card debt.

A collections company keeps sending me a bill claiming I owe ~$300 to t-mobile. I've never been a t-mobile customer. I just toss it.

Should I threaten them with a mail fraud suit? Should I keep ignoring them? Should I offer them $20 to keep my credit rating pristine?

1. FDCPA no contact letter to collections company.
2. Contact T-mobile and explain the situation, offer to file an affidavit attesting to the fact that you didn't have an account.
3. Monitor your credit agency and dispute any flags.

What's your SS number?

562-10-0296

Tell them Mr. Mouse sent you.

if the SOL is up on your debt, but it's still being reported on a credit report b/c it's not been 7 years, is there anything you can do to remove it on your report, or have it marked disputed?

Get your free credit report and dispute it there. You may get lucky and they may not answer the dispute.

Don't go to freecreditreport.com, they'll charge you. Instead go to the actual free website: https://www.annualcreditreport.com/cra/index.jsp

Do you still practice law? If so, what kind?

My wife used to be an insurance defense attorney (auto, construction defect), hated it, and is now a ghost writer.

I still practice law. I now do insurance defense, representing businesses against bs claims in premises liability actions.

Hi,

I have a small debt (I think) that I have some questions on. It is less than $200 dollars, last time I checked, and I believe it has passed to a collection agency.

I incurred this debt by going to a hospital and spending 10 minutes in there to get a prescription/diagnosis for tonsillitis. I did not have insurance because I had recently switched from my mother's insurance to University insurance and there was a period of time that was not covered. I just happened to get sick and had a flight the next day, so I was in a rush.

I also don't have the means of paying for this easily. My family is poor and I am literally going through University on a full scholarship. We (my mother and I) did get a check in the mail for the amount a few weeks after the diagnosis, but my mother just told me some mumbo jumbo about how the hospital was government funded and we didn't really need to pay so I was like "??? ok?" and went on with my life.

The collectors started calling me and after the first few times of answering and getting no where, I stopped picking up. It has been a few months, and they keep calling.

Also the first time they called they spat out some threat like "pay or this will go on your credit report." Is that claim legitimate? Also note that I don't have a credit card, loan of any sort, nor even a bank account. As a side note, I don't even have a state or federal issued ID.

What is the best way to go about a situation like this and what should I know so that in the future I don't get riddled with debt and end up like my mother with a credit score beneath the days in a year (might be an exaggeration, I don't know)?

This isn't legal advice - see an attorney if you want legal advice.

Best way of handling a collector is to call them up, tell them all the reasons why you can't pay, make your life seem like it's terrible, and then offer them a one time lump sum. Basically, tell the hospital collector that you have nothing, you're in poor health, are taking care of your family, etc etc, and offer $50. Hospitals have a ton of wiggle room because half of their costs are written off as is.

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It really depends on whether the plaintiff in that case attempted to progress the case against you. There's an (unlikely) chance that they attempted to serve you via some other mechanism than physical service, and maybe have obtained a judgment against you. To find out for sure, call the clerk of court for the county you were living in and ask them if there was ever a case against you and what the result was.

If there's a judgment against you, they could try to get to some of your assets, but honestly, it's very unlikely.

I think I'm about to be subpoena'd by midlands funds.. Ive never heard of them but during a clearance investigation that was being conducted on my behalf I was made aware of companies who say I owe them. I'm Active duty military and would like to know what I can do. Any debt that I've had is going on that SOL, it's about to be 7 years

Check your state for SoL. If it's outside the limit, they shouldn't file a suit against you. Aside from that, you're always welcome to contact them directly and negotiate, but keep in mind that making a payment renews the statute of limitations and it also gives them an indication of where you live, making it easier to sue you.

Did you ever hear about what happened after you filed the suits? If so, what is the most ridiculous reaction anyone had to the suits or collection methods?

I had to deal with the debtor's directly after filing suit. Most wouldn't bother responding, those that did would do so, resigned to the fact the money was owed. There were a few oddballs out there who would scream and curse.

Is it weird at all if I've been reading this entire thread in the voice of Saul Goodman from Breaking Bad?

Better call Saul.

You just made my week.

In cases where you obtained a default judgment, what kind of success did you have actually collecting even a dime of the judgment? I would assume if someone defaulted on a credit card, it typically meant they had little or no assets that could be seized and sold to satisfy a judgment. Did you find most of the judgments you obtained were virtually worthless?

Many of them, yes. That's when garnishment comes in. I didn't handle too much garnishment law, but I understand that if you're head of household, you often are protected from having your wages garnished. The bulk of the firm's income came from the payment plans we placed debtors on.

What happens when you just never pay the debt even after its been brought to court whats your best option then

Depends on your situation and you should consult with an attorney. Generally, once they get a judgment against you they'll try to garnish your wages or go after any assets you have.

And if I have no wages to garnish and only thing I own is my car then what

Then they can't get to you, nor can they imprison you. Consider it a silver lining to insolvency.

Do you know anything about medical debt?

It's similar enough to regular debt, although hospitals write off a lot of what they charge. They're bills are artificially inflated to negotiate down.

So I have a couple cards in collections for a long time. How do I talk them down if I want to start paying it? I don't want to pay all that interest.

Everyone you talk to has authority to reduce your balance. Everyone. The problem is that everyone is audited or they answer to someone above them so they'd have to justify why they reduced your balance. You need to convince them that you're insolvent and that your life is awful. The biggest sob story you present means the likelier it is they'll reduce the debt. Plus, they'll realize it's likely the most they can get from you.

If it's in the hands of an attorney, they'll have some of the greatest authority for reduction. Generally 50% reduction is permitted, but under exceptional circumstances, I reduced a balance by 95%.

Have you ever had anyone so down in the dumps that they threatened to kill themselves and wish you good luck collecting their debts then?

The most common phrase I would hear on a daily basis was "You can't get blood from a stone." No suicide threats though.

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Contact an attorney in your area that knows the law of your jurisdiction.

Realistically, if they can't garnish anything, they can't get to anything. Your credit will be screwed of course. You could always just restart payments as you were doing previously.

Most depressing lawsuit?

Debts related to healthcare costs.