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chicamarie

Settling while lawsuit is in process

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Hi there.  I have another thread going about my lawsuit with Unifund/Citibank and Daniel Gordon, PC.  But my question is about settling during this whole process.

 

The reason I'm even here is that my husband and I ended up on the wrong side of the housing bubble and resulting market and construction industry crash.  He lost his building work for a year, we had two tiny kids, a construction loan and a half-finished house.  We survived by maxing out 8 credit cards that were virtually unused before then.  When it all shook out I decided the only option was to try to settle with the credit companies for lower amounts, with a loan from a friend.  Every single company worked with us - Chase, B of A, US bank.  Except Citibank. I could never offer them enough.  So, I ignored them through the last 3 years until I got sued by Daniel Gordon and Unifund.

 

I offered them a paltry sum to settle, right after I got served.  I got a response that was basically the whole 15,000 (it started out around 9,000) in one lump plus payments.  I sent another slightly higher offer, and receieved an offer for 12,000 in lump sum.  I haven't responded back since there's no way I can come close to that, but I'm ready to send another counter-offer.  And FYI, my settlement offers are vague and do not claim that I actually owe Unifund any money.

 

So, I guess I'm asking if this is even worth it.  I actually would love to pay something and finish the whole affair.  That was my original plan anyway.  But will they be more or less likely to settle as the case progresses?  I have returned the requests for admission and am at the stage where I need to submit my own discovery requests.  It's Oregon, so arbitration is mandatory but has yet to be scheduled.

 

I know this board is more about defeating the JDBs outright, and I would love to do that if I have to, but my sanity is strained and my stress level is high, so settling isn't off the table.

 

Thanks!

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The only problem with settling for less than what you owe is the potential that they'll sell your debt to another JDB or that they'll file a 1099-C for the remainder. That becomes income that you'll owe taxes to the IRS on. 

 

There's certainly nothing wrong with settling if it makes the most sense for you, just be careful that you do it correctly so there's no future issues.

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Thanks, Spikey.  We got 1099s for the other settlements and we were able to claim that we were insolvent at the time.  I'm not sure that will fly this time, but the taxes on the 1099 amount will still be much less than paying the full amount.

 

Also, in a well-crafted settlement letter, doesn't the wording preclude the reselling of the debt?  I haven't had to settle with a JDB before, just the OC, so maybe it's a tighter ballgame.

 

Thanks.

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@chicamarie it sounds like you have some experience with the 1099 thing, which is good.

As far as the settlement letter, yes, a well crafted letter will take care of a potential resale issue. Just something I wanted to mention so you were aware of it.

 

Something I didn't mention is that a potential settlement should become more favorable the closer you get to trial assuming you put up a good fight. They don't want to go to trial with you, they just want some of what you owe. They likely paid pennies for your account so anything they get out of you above that cost and lawyers fees is gravy for them.

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The fact that it is a jdb's increases your chances of winning. They paid maybe 150 .00 for your account, and are trying to collect 1000%. That being said, you will most likely lose mandatory arb, they are creditor friendly. But you can appeal with a trial de novo where that is actually have a good chance of winning. It will cost you time, and study. The people here can walk ypu thru the process.

The further you get into litigation, the better your chances are they will settle for less. Especially if you do the trial de novo after arb.

Read the threads by @Huey Pilot who has experience with this law firm, and is also from Oregon. We will be here to help you if you choose to fight, for however long.

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With DNGPC you are against a very hard line on settlement. They have a very high success rate of bamboozeling people either into default or very high settlements. DNG doesn't really care if you default or settle. Their money machine as bill collectors if very effective. DNG has very few attorneys on staff but process thousands of law suits. That should tell you something. DNG get's a flat rate on each account they process (rumored $300.00) and percentages of what they settle for via means of legal fee's. Their business model is not to spend to much time in Court fighting lawsuits because of the added expense, court costs, and manpower costs. 

 

If you owe Unifund, Asset Acceptance, Midland or one of the other Junk Debt Buyers say $10,000.00 and fight with your best defense and go through arbitration and on to trial de novo someone like DNGPC will have 8 - 10,000.00 in matching expenses. It's just not worth their time to fight you when they have 100 other accounts that will just roll over and they can garnish wages and vacate funds from bank accounts, savings, and sometimes even pensions. 

 

When you borrow $10,000.00 from family or friends to settle you still are going to have to pay back the loan. My suggestion is pure economic - spend the $1500.00 dollars in filing fees, court costs, mailing expenses spread over 4 - 5 months and back them down and get them to dismiss.  It's your 1,500.00 against their 10,000.00.  Who's coming out ahead on that deal. 

 

Your case will probably get dropped in a heartbeat. Post your Plaintiff's request for Admissions and Production of documents so we can help your get them answered. Deny everything - admit nothing - you provide them nothing they have no evidence anyway so let them make their own phony case and fight them. 

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