Does DV and C&D work

[treehugger1]

I thought I would make a post here related to debt validation and C&D phone calls.

Every collection agency I have ever requested debt validation from has never validated any debt, especially if the original creditor was a national or regional company. In addition, my state laws (OR) refer to original creditors as well as CA's.

I also requested that the agency not contact me except in writing. Now, these are not extremely large debts, and a couple of months of garnishment would take care of them, but still I do not hear from these folks.

One of the things I've learned should it come to a small claim ($7500 or less in Oregon) is that you should always deny the claim against you and request a hearing. Why? Well, its cheap ($45.00) and it takes 4 - 8 weeks to schedule a mediation hearing. I'd always taken the stand that if you owe the debt, then there is no reason to deny it. It turns out that in the majority of counties here, denying the claim leads to automatic mediation that gets scheduled weeks in the future. In addition, one has the right to request a re-scheduled hearing date if the request is received at least 7 days in advance (I'm speaking of my county, here.) This can add another 4 - 8 weeks!

Since I've never received a return on a request for a DV, I'm wondering if there is some giant IT info center out there that tracks your name and account numbers that state you requested a DV. As such, no one wants to take on an assigned account from an OC. Or, do you go to the bottom of the pile until someone is ready to sue you? I still have many un-settled accounts, but I seldom hear from these folks. I don't get it.

I have several postponed small claims issues that will not come to hearing for another several weeks. I'll let you know how these eventually turn out. I do have to wonder if the CA will even show up for the hearing (the first scheduled hearing is for $580.) There are no attorney fees allowed to be added on in small claims in Oregon. There are "prevailing party fees," whatever the h*ll those are, but it appears that they seldom exceed $85.00 from records of the court I can access. So, why on earth would a local CA bother to file a claim on $580? I think the answer is clear. Most folks simply allow the default judgment and this requires no additional time or effort from the CA. All they need is a court clerk's stamp for acknowledgment of a default judgment, and they can quickly move to garnishment.

I've recently learned that should I have a credit card account where I have been sued in a larger circuit court, it is in my best interest to request the case be removed to small claims, if the claim is under $7500. My understanding is that this costs me nothing, other than stamps required to mail my request to the creditor or CA along with my request to the circuit court.

In summary, if you are trying to buy yourself time, there is nothing to be lost by DV'ing, requesting the CA/OC cease and desist, and answering every civil summons you receive. It does seem to set all parties back a notch or two. In particular, it appears that debt-related small claims cases and larger amounts in circuit court cases are beginning to grind things to a turtle's pace. Not responding appears to lead to quick judgment, while any response at all appears to set things back a bit. Just my experience, and I would love to hear others.

If you know you owe the debt, and you know folks will come after you, then what do you have to lose while exercising what "you believe are your civil rights?" In a worse-case scenario you have the sword of bankruptcy, chapter 7 or 13.

Keep in mind that running late on payments for months may be more painful to your credit than an immediate filing for BK, but if your credit is secondary, exercise your rights if you can afford to. Request validation of debt, and request that you are only contacted via USPS mail. The result is that you may get sued immediately, but this itself does not imply immediate action can be taken against you. Communicate, communicate, communicate...

The law and courts appear to be neutral until a case actually appears for hearing or trial.

My humble opinion and interpretation of things.

[BigJohn]

Did you send the DVs and C&Ds by certified mail?

[treehugger1]

I only use return-receipt certified mail for all issues related to my financial crisis. Interestingly enough, several CA's assigned to collect on some big CC debt with national companies stopped calling, as did the original creditors. Not sure what the deal is here. I would expect that the few big CC's that did not want to work with me got notice through the CA's not to contact me via phone. I still get statements, but no phone calls. Strange, don't you think? It is clearly a case of "what do we do now?" from CC's that probbaly believed the collection agencies would handle it.

This is not to say that the accounts are being prepared for a lawsuit. But, I expect this and figure, "so what?"

I haven't pulled my credit report for two months so I don't have any idea what might be going on, charge-offs, collections, etc. I'll pull a recent reprot mid-July. No need to hurry as I am working with those who agree and ignoring those who won't agree.

As always, if worse comes to worse, I can file a BK 13 and let the local trustee swing a hammer at them.

I recently received a letter that our local CitiFinancial branch was closing due to national lay-offs. The agreement I have with them is only local through the branch, so I will be quite curious to see what the "big boys" want to do with my account. I do feel sorry for the dozen folks who will lose their jobs due to the lay-offs, but then we all assume some risk in the finance business, loaner and debtor. The local folks bent over backwards to help me out, but I'm not sure I'll receive the same grace from whoever receives my account. But, I have nothing to lose waiting to find out.

[WhatMoney]

treehugger,

The hearing fee in small claims for claims over $1500 is $82.50 for the Defendent. ($44.50 under $1500).

Since I've never received a return on a request for a DV, I'm wondering if there is some giant IT info center out there that tracks your name and account numbers that state you requested a DV. As such, no one wants to take on an assigned account from an OC. Or, do you go to the bottom of the pile until someone is ready to sue you? I still have many un-settled accounts, but I seldom hear from these folks. I don't get it.

DV'ing may label you as a possible "non-default" defendant. They actually have to exert effort and money if you respond and appear. I expect the local collection attorney firms have enough debtors that they never hear from - so they just sue them and get their default judgment. That is the business model they use. An activist/knowledgeable debtor is like that wormy apple at the top of the tree.

DVing an out-of-state OC or CA is probably just ignored because they never intended to sue you in the first place. That would require hiring an in-state attorney. We are lucky most of the high volume national CA's are on the east coast or midwest and not in Oregon, so most have no licenses here. I have never bothered to DV an out-of-state collector, although I've had dozens of initial letters from them. I felt it was a waste of time and postage.

I have only DV'ed one collection attorney, because he was in state. He did respond, with a letter acknowledging my letter, but no DV. Just a statement that they were returning my request to their client (who was a JDB) for further review, and any legal action or attempts to collect would cease until I was sent my requested DV. Been waiting for 3 months and no DV yet.

I've recently learned that should I have a credit card account where I have been sued in a larger circuit court, it is in my best interest to request the case be removed to small claims, if the claim is under $7500. My understanding is that this costs me nothing, other than stamps required to mail my request to the creditor or CA along with my request to the circuit court.

OK, but why would a Plaintiff want to spend more money on fees and the formality of circuit court on a claim under $7500? Since 99% of the small claims cases go to default anyway, it is the cheapest way to get a judgment. Usually you want to transfer from small claims to circuit court so you can use an attorney to defend yourself. There are transfer fees from small claims to circuit of course. There is also no appeal from a decision in Small Claims court, btw, in case the judge was crooked or stupid.

If you respond to a circuit court claim over $10,000 it will cost you $188 btw, and the Plaintiff $189 just to file.

[treehugger1]

Thanks for the response. Yes, the small claim defendant fee is more than 44.50 for claims over $1500.00.

In terms of the cost of answering a circuit court claim. the actual cost depends upon a variety of circumstnaces that one can appeal to. As a defendant, you have the right to defend yourself at no cost depending upon your "econimic" condition. This would not be true in my case, as I make good wages, but this does not prevent me from filing an answer with a letter stating I cannot afford to defend myself. I don;t have time to go in to the particular details, but thre are county courts here that do accept modest payment plans from defendants. At least that what I've heard.

I guess my point in my post was that rolling over for the plaintiff is not always the right thing to do. In addition, simply doing nothing is not always the best course of action. Each situation is quite different, and only the parties involved can measure the risk of their actions.

[BigJohn]

As for debt validation, over 3 years ago I cleaned up my credit report. I sent out debt validation letters and after I believe 2 months, I rewrote them that they had not provided validation of the debt in a reasonable time frame and I said as far as I was concerned, the debt was no longer valid. If they didn't remove it from my credit report, I followed up with another letter.

[epiphany]

HBSC turned my account over to a collection agency. They were the first to do this and it was shortly after I had begun researching this mess that I got myself into. I had been ignoring their phone calls and they eventually called my sister-in-law. That got my attention. I sent them both a debt validation request and a C&D,except for in writing.

About 5 weeks later, I recevied basically the same dunning letter, only this time from a law firm collection agency. By this time I had learned that speaking to my creditors and letting them know that I was filing bankruptcy worked pretty well to keep them at bay. However, I called this attorney collection agency, and they refused to speak to me--they said they couldn't because of the C&D I had sent the former agency. I sent them a DV too but never got anything back on that either.

I emailed everyone in the firm I could find email addresses for and let them know of my BK and gave them my attorney info.

Well, since then, they have served me and could receive a default judgement any day. I will be filed hopefully before the shit hits the fan or me, but the bottom line is, I wish I had not C&D'd them in the first place. I think if I had spoken to them instead of being afraid to answer the phone, I wouldn't be on pins and needles right now to see if my filing will beat the default date but I can't be sure.

I do not recommend the C&D.

ep

[treehugger1]

I don't think there is any way of knowing what will happen when you request DV or you request a C&D. However, if you have nothing to lose (no assets,) and anyone looking at your credit report can see you are in very deep with 30 - 90 day late payments running red across the screen, what does one have to lose?

I do think it comes down to individual decisions. Can you answer a summons to court? Do you care about your near-future credit? Can you survive on 75% takehome after garnishment? Every individual is a different situation. Who knows why one company moves toward suit and judgment while others sit in the background.

I do believe you are correct in assuming that cutting off communicaiton to creditors is not the best course of action.

[CompTweaker]

Good luck Treehugger, I'm going through some similar action now. What gets me is the lawyer that unifund has hired or sold the account to hasn't even sent me a chance to request debt validation.....and I'm already showing up on local records with a summons and complaint....now I'm just waiting to be served. But they won't get anything since Im protected through my state's exemptions (SC), if I file for BK. But before I file, I would like to try and fight them just to see what happens. Unifund never validated the debt when I sent them the request through certified mail, return receipt requested. And the lawyer who has filed the summons is in my state.

So what puzzles me is what if a large agency like unifund sends you a chance to request validation, you request and they dont, but then all of a sudden a few months before the statutes of limitations expire, theres a debt collection attorney starting the lawsuit process, and he hasn't sent me a chance to request validation for his records? Shouldn't he be required to do that too? I think "WhatMoney" told me in another post, was to file a motion for discovery as my next move after I'm served. I've looked up several cases that unifund has brought in my area and about 90% of them are "default uncontested". A few I've seen where it looks like the debtor tried to fight it got vacated or settled.

TreeHugger, keep us posted on your situation. I will do the same with mine too since theres not any stories here of someone actually fighting the CA in court and what their results were.

[treehugger1]

So far, I have three small claims against me. One I filed a counter-claim for and the hearing is set for the third week of July.

I just received a new one this monring! This one is for a debt of $1300.00. In fact, I had been paying a reduced amount under verbal agreement (I know this doesn't count) and it appears they want closure. The small claim was filed 60 miles away (they have this right because that is where the original contract was issued.) I'll wait until day 11 and fire off my $44.50 and request a hearing. I called the clerk in the other county and she said it would be 6 - 8 weeks before the hearing was scheduled. Fine with me. I have another small claim amount of $250, but I'll let that default, and I think they will accept a payment plan afterwards. If not, they can get it out of my wages.

It doesn't sound as if you've been served yet. Is the attorney acting on behalf of unifund? Or is the account now with another agency? Definitiely get an answer in. A default judgment takes a few seconds, but a contested debt can take months to get to a judgment.

There is plenty of arguing regarding what happens if a CA does not provide requested DV. Some claim that passing on the debt without replying to a DV is "continued collections" activity. But, I doubt this has much weight when you actually owe the debt.

Once you get served, you should definitely answer the summons. This at least sets the tone that you might not roll over easily. I was looking at a large county in the northern part of Oregon and I'm beginning to see a lot of cases listed as "eligible for arbitration." I also see judgments granted without a fight. I'm guessing that if one puts up a fight here, then you are automatically put in the long, long list for eligible arbitration. While I don't know exactly how this works, it appears that an answer to a summons automatically sets up arbitration. From the length of the list, it appears that the wait could be very long! On the other hand, I would assume that once you are served and answer and go to the arbitration que, collection attempts are suspended. Not bad, if you need time to sort things out.

A few of my other creditors that I'd been working with have closed offices here and things are really a mess, with the mothership unaware of what the offspring were doing. Things could get messy for me again. I was getting close to workable arrangements, and now I see all kinds of changes with who holds what accounts, as one creditor sells the account to another. These are creditors doing this, not CAs.

While I try to keep track of my 15 debt accounts, there is no way of knowing if something will sneak up. I went to a paper paycheck, and closed all bank accounts except one. I keep the balance at zero except for the rent check and a few other bills. I'm cash-and-carry, MO's, and prepaid disposable debit cards at this time. Its not as inconvenient as I thought it would be.

The nice thing is that I now know exactly what my finances are at any moment in time. I even budget for the possibility of a 25% wage garnishment. If folks want to take me to court, I figure I have nothing to lose (other than court costs and probably attorney fees for plaintiff,) but they need to work for it.

I suspect that there is a possibility that I cannot survive both meeting the payment arangements with creditors and surviving wage garnishment, so something may have to give. Until then...