Percent Sued Doesn't Jive With Forum Experience

[ryan]

Something that has me puzzled: Many online debt sites and many sellers of debt settlement courses, claim that .."only 1% of debtors ever get sued".

I've seen this supposed statistic quoted over and over again. I assume it's designed to calm the shaky nerves of debtors in trouble.

Yet, when I read all these BK Forums, and Debt Consolidation Forums, its seems like a very different story.

Many here and elsewhere refer to a general timetable of creditor actions. Typically, I read that first 90 days the defaulting debtor is handled by OC customer service dept. Then next 30- 90 days debtor is put in collection dept or outside collector. Then sometimes a second collection agency....

Then many refer to next step as 'referral to attorney for legal action" . So, 6 to 9 months total, and debtor is being sued.

And when I read the forums, it does appear alot of people are being sued.
....some even faster than the above timetable. I just wonder is there any truth to this '1% are sued" and if not what percent do you think are actually sued?

[GoingDown]

I think from my own experience and the experiences of relatives and friends, it is rather rare to get sued over credit card debt.

When it does happen it is usually because the creditor or collection agency had some reason to feel that it would be worth the money and effort to sue them-- they had a job or assets to go after, or they were easy push overs for them... getting scared on the phone and giving them money.

I send each new collection agency a Cease and Desist Letter and in the letter I tell them I am judgment proof and why I am judgment proof. I think it keeps them from suing me.

[Violet]

I am currently being sued by Discover for $4000. This is after a year of non-payment. The only jobs listed on my credit report are self-employment and a temp agency. I have no house or assets, own a 10-year old car, live in a lower-middle class area and didn't use the card to buy anything expensive or luxurious, ever. I have no idea why they thought I'd be a good candidate to be sued.

[flyinbroke]

There are a couple of companies, based on my research, who are notorious at suing. Discover is one at the top of the list.

[ryan]

I don't know how much a $4000 suit has to do with it being Discover, but I have also read on forums (including this one) that there is a "sweet spot " for lawsuits.

One poster said it was from $1000 to $4000. Reasoning may have been because at that low a number it wouldn;t be worth it for debtor to do BK, but also much higher say, $10K or $15K or $20K+
it might be enough to trigger a BK, that otherwise might not have occurred.

...and under $1000 perhaps would be a bad cost/reward ratio?

[jalex]

I suspect that the forums are also not a good cross section of the general population. It's kind of like when you search for <insert name of car here> problems on google. The people that are out posting things are usually the ones that are upset, having problems, etc. When everything goes right, you don't usually get on the internet and go tell everyone how great your car is.

In this case, I would imagine the people that are being sued are more likely to reach out and ask for help and advice than someone doing a straight uncomplicated bankruptcy.

1% still sounds kind of low to me, even given the reasoning above. I'm sure it is a small percentage, but I don't know if I believe 1%...

[ryan]

On some forums including this one I've read that there is a $1000 to $4000 sweet spot for lawsuits by CC companies.

[fireworks]

1% of debtors - who are the other 99%? Are they including debtors who never fall behind? Those who might fall behind for a few months, then catch up?

Many people go through life without every being more than 30 days behind on their bills, and often then due to forgetfulness rather than lack of money (that was me for many years). Of course they won't be sued.

Many will fall behind for a few months due to job loss, medical issues or some other short-term problem, then will catch up. They aren't ever far enough behind to be sued.

Some people are chronically late, always falling behind and catching up. These people are gold mines for credit card companies especially with constant late fees, overlimit fees, etc. As long as they pay more often then not, they won't be sued.

As Jalex already pointed out most of the folks on this forum are at the end of their rope, financially speaking. By the time folks get here they're likely to be in really bad shape, many are already behind on payments etc.

Personally, I'm amazed that I have yet to be sued. I haven't paid on any of my credit cards in almost a year. Since sometime in February or March of last year I've told many creditors that I'm filing for bankruptcy and given them my attorney's info, that's probably why they haven't filed suit. Eventually I think they'd get tired of waiting and go ahead with a suit anyway. While I'm curious just how long that would take I'd rather not find out.

[walkthaplank]

I was sued by two creditors. One for about $5k the other for about $7k. I was about 9-10 months out from paying either one.

[Bell30656]

I was sued by three creditors. Two were a JDB (the same JDB ironically) for a Ugly Duckling automotive loan that was six years old and a Bank of America Visa card with only a $1500 balance that was several years old. The third was a local small lender called World Finance. The amount on that one was under a $1000.

[lalap123]

I'm a little over a year from not paying and haven't been sued. The strange thing for me is how little contact I've had with any of the companies. I had eight cards, all major credit card companies, and have gotten a few letters from collection companies. Overall I don't get phone calls anymore and rarely see any other communication.

[OhioFiler]

Discover has left us alone for nearly a year with a $9,000 balance. GE Money Bank is the only creditor to have sued us and that was after 9 months. That trial is scheduled for early March so we'll be filing BK in early March.

[GoingDown]

Did any of you who got sued send the creditor or junk debt buyer or collection agency a letter saying you were judgment proof? I think that has made a major difference in my situation.

In the letter I explained to them that I do not own any assets such as real estate, stocks, bonds, etc., that I had no wages to garnish, that I don't use checking accounts or savings accounts, and that I intended to file chapter 7 bankruptcy soon, and therefore their judgment would be worthless and they would never collect a penny of it from me. I personally believe it has kept me from getting sued in most cases. What would you think if you were a debt collector and you got that letter in the mail from me? I wouldn't waste my time with someone like me, if I was a debt collector.

Out of 14 charged off credit cards ranging in debt from $300 to $23,000, only one filed a lawsuit against me... Capitol One for a lousy $300 credit card bill. They filed the lawsuit in Virginia eventhough I live in Arizona. That was more than 5 years ago, and they never collected a penny of that judgment from me, and by Arizona Law, that judgment is beyond the statute of limitations for collection in Arizona, so it is now worthless.

Most of these charged off credit cards are so old now that they are beyond the statute of limitations in Arizona, and so if they do file a lawsuit I will now fight them in court over it and use the statute of limitations against them.

I no longer get collection letters or phone calls from any of these creditors or junk debt buyers. I think they have given up on me.

[optimistic1]

Debt settlement companies will say alot of things to get you to pay them to do something you can do yourself.

[treehugger1]

I had several local companies sue me, butI told them that this was how they were going to get their money. None of these were very large, and they were paid off through garnishment. I am currently under a garnishment for a local personal loan. This should be paid off by May, unless someone else sneaks in a garnishment writ within the 90 day renewal period for the current creditor's writ.

The only national creditor to sue me at this point (and I have 1- 2 1/2 years of non-payment) was Citi. They have a judgment but have not acted on it yet. I expect written interrogatories every day, or a summons to a debtor examination, but nothing has occurred. If they are smart, they won't waste their time with an exam. My credit reports tell the entire story.

I like the idea of telling the creditors/CA/JDBs that other than wages, I have no assets. In terms of wages I can tell them that I am currently on a continuing wage garnishment and my wages are also subject to 15% student loan garnishment.

I also filds a declaration of exemptions and exempt assets in my civil file from Citi. I sent a copy to the attorney. This may be why they are holding off actions. At this point in time, they are way back in the list of garnishments. A student loan garnishment is permanent, thus after a 15% garnishment, there is only 10% remaining. This can take a long, long, time to pay off a $10K judgment.

I've heard that there is a "bankruptcy score" that some OC's and CA's use to measure their risk of not getting a dime out of a judgment.