Small Claims Outcome

[treehugger1]

I stated earlier that I would post the result of the first small claim against me. We met with the mediator in a room. The plaintiff stated their claim first. They clearly addressed the different name of the original creditor on the summons. They mentioned that I had been making payments on the two debts and then simply stopped. They did not feel that they had "intentionally" violated the cease-and-desist.

When it came my turn, I acknowledged the debt (there was no getting around this.) I brought up the violations of the C&D and stated my counterclaim and the fact that small claims court is a recognized venue for hearing such claims. I carefully watched both the plaintiff and mediators' faces and body language.

When I was done making my statements, the plaintiff simply said that we should perhaps go to a full on hearing before a judge as we would probably not be able to reach an agreement. We then took several minutes to think about "any other options" that might come to mind. I gave considerable thought to HH's comments on my other post, and decided I probably didn't want the risk of a judge hearing this. In such a case, after failed mediation, their is a clear winner, and I doubt I would escape judgment and wage garnishment. I brought up potential payments and made an offer of $350 over 6 months.

Keep in mind that my intent has always been to attempt to get reasonable payment plans that I can afford. I stated that I would be willing to discuss payment on the original debts only with all interest/fees stopped. After more bantering back and forth, we finally agreed upon a 5 month payment plan on a total debt of $383.00. This was quite a change from the CA not willing to give me any reasonable payment plan in the past.

Did I win? No. Did I get what I feel is a reasonable compromise? Yes. The case is officially dismissed and as long as I can make the payments, I will avoid the default judgment. Can I make the payments? I can't say for sure what will happen in the future, but I will attempt to make these payments and work with each creditor/CA that files suit, small claims or other.

The greatest outcome for me was that I put off paying this debt for approximately seven months.

My next small claims hearing is scheduled for the end of August. In this case, I will have to go to the next county and we will meet with a judge. I may not be able to keep away from a judgment in this case, as a judge may only look at the debt (I obviously owe) and simply not consider a payment compromise. But, then again, perhaps my willingness to show up an dwork with the creditor will have some meaning. Small claims in Oregon are not necessarily meant to "follow the letter of the law." They also serve to allow parties to workout differences and compromises.

I have several more possible small claims filings coming my way in the next 30 - 90 days. I will reply to any and all that are served on me. While I could survive 25% wage garnishments over extended periods of time, I'd prefer to continue working toward reasonable payment plans. As always, if a creditor/CA does eventually get a judgment and wage garnishment, all my work might go for naught.

[AngelinaCat]

Congratulations on this settlement. I hope the next one will go as well, and that you will be able to make the payments. Good luck!

[GoingDown]

Since you're facing possible wage garnishment, and voluntary repayment as well, how far are you away from filing bankruptcy? Or would you lose some valuable assets if you filed bk?

If I had wages that could be garnished, I would probably go ahead and file bk to protect them.

[treehugger1]

Keep in mind that I would be in a 90% - 100% K 13 plan. No big deal, but my student loans of $70+K would have been put in interest-bearing deferrment for 5 years. No other options in m district. As a result, I would pay back about 100% to unsecured creditors and exit a BK 13 owing an additional $30+K in interest on student loans. The only thing I would seem to gain would be some protection from an automatic stay and the net gain would be to payoff about $35K of $$130K (student loans of $70K + $60K in unsecured) in five years. I'd come out still owing the $70K in student loans + the $30K in interest. Believe me, I spoke with many attorneys in my district and they all agreed that the student loan issue would create a problem.

Worst case scenario is that should I fail in my endeavors, I'll have less total to pay in BK 13 down the road. Best case scenario is that congress takes a stand and clearly states that student loan payments should be subtracted as a "preferred" unsecured debt and is subtracted prior to determining dispoable income. In such a case, I would file in a heartbeat. Until then, I'll continue to attempt to work through all of this one step at a time.

In three years, I could take early "retirement," draw my pension, etc and easily qualify for the BK 7 means test.

Until then, both my unsecured debt and student loan debt is slowly going down.

[fltoo]

I love following your story. Very proactive.

Who initiated the small claims case? Not following whether you did to get them to a settlement or they did to sue you.

Forgive me for being lazy this morning if you addressed this in other posts.
Sounds like they did but which cc company took it to small claims?

[treehugger1]

All I'm attepting is to either buy time or get a better deal than I would have in a BK 13. I'll have a better sense in the next 12 months.

The small claims were due to a local CA collecting on a couple of accounts.

The next claim hearing (end of August) is a $1200 - $1300 unsecured debt with AG Finance. (Also a local office)

Local creditors/CA's can set a small claim summons up quite inexpensively and I always expected them to do so.

In Oregon, one can initiate an action in small claims for any amount under $7500. Not exactly my definition of a small claim, LOL. But, if it is local, then there is always that one last shot at mediation before a hearing before a judge.

Interestingly, the other day I assumed that if you failed to reach a compromise in front of a mediator, then you immediately went down the hall to the judge. It turns out that if you cannot reach an agreement during the mediation session, then a new hearing is scheduled in front of a judge. This can then take another 4 - 6 weeks in my county due to backlog. This was another good piece of info to learn.

[treehugger1]

I'll add I have four other under $1500 accounts locally that could go to small claims.

I have one $5000 local account that would be eligible for small claims.

I have had agreements with each of these, but the monthly payments spread out my remaining income a bit too thin.

I'm hoping that I have a shot at using any mediation results and contracts to argue that if I'm sued, then I would at least like the opportunity to attempt a reasonable payment plan. Small claims issues here really do seem to be more about getting people to work out agreements prior to any party getting a judgment.

Having said that, there is always the chance that a party can refuse mediation and immediately ask for a hearing and attempt an immediate judgment. I figure at $45 to answer the small claims summons and demand a hearing, at least I'll find out. What the "heck," you never know until you try.

And, in this economy, perhaps most creditors would rather have small payments rather than spend 1 - 3 hours of employee time in small claims courts before a judge.

[treehugger1]

I just got served two nights ago by another local creditor. This is another $500 - $600 small claim. Again, I have 14 days to "deny and request a mediation hearing." I'll do just that, and I assume the hearing will be in early September. Looks like the calendar is filling up. LOL

I do intend to take other agreements/offers from other creditors to show the mediator and plaintiff. Hopefully, they will see some sense in working with me.

The way the local small claims court works is that if you and the plaintiff cannot come to a mutual agreement through the mediator, then the case proceeds to the actual hearing befor a judge. However, this does require another date, and can take another 4 - 8 weeks to schedule due to backlogs.

I want to believe that 6 - 9 month payoff agreements on these amounts are worth it to the creditor. I guess I'll find out.