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Settling with Kohn Law Firm, told lawyer will cost them $$$ for debt validation....what do I do?


Meg870
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Got an e-mail from my lawyer telling me that Kohn Law Firm, who has had two months to get the debt validation papers,said that they will incur costs to obtin debt validation.  Doesn't this sound fishy to anyone ? I dont know what to do. The debt was for $5000 from a credit card. I'm very scared and don't want to end up paying a large KLF bill alongside my settlement.

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You are absolutely entitled to a DV, are they suing you? Then they should have had all the necessary documents before they even filed.

So if I go down to your local courthouse, file a suit against you and say you owe me 10k, and you say, no I don't, prove it. I say we'll that's going to cost me a lot of money to prove it, and then you will have to pay that to, are you sure you want me to?

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They have filed a lawsuit against me.  I would have thought they'd have these documents already as well.  I just wonder if anyone else has been through something similar.  Is arbitration still an option for me?

The card agreement will have the parameters for when you can elect arbitration. It can usually be elected any time before a judgment is awarded. But since this is a JDB suing you, I say screw arbitration. Tell them to knock themselves out getting whatever they need to prove the debt is yours and see what they come up with. If it's undisputable (100:1 odds it won't be), then elect arbitration.
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I am still learning a lot of this myself, but I feel like I may be able to shed some light :-)

 

How long ago did they file the suit against you?

 

Have you already answered?

 

You should post your answers to racecar's 16 questions! The real experts here can help a little more.

Your lawyer seems to be more of a negotiator. Shellieh98 is right, though. They have to already have the proof they need to even file. When they do file, they do so as a "sworn statement they have it." From what I have read on more sites than this, now being more level headed, they usually don't.

 

To put things into perspective, I went to my court house today to file my answer and ask for a public schedule of cases I can sit in for. They told me they have ONE date this month for "trials" and the next was Oct 5th with more "trials." She said most of the time they result in default judgments, and very rarely go to a real trial. She said sometimes people can sit in on something but there is not much to see.

 

Who is the plaintiff that the law firm is representing?

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They filed WI small claims court in July for a US BANK credit card debt and had a lawyer answer for me.  My lawyer asked for debt validation and they have had a month to get them but just now contacted my counsel to say that it would cost money to get the DV.  

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That is only because they purchased your debt as part of a portfolio full of everyone else's and their grandma's debt, and they get a generic bill of sale that says "We, the bank of your OC, sold debts in the amount of $5,000,000 for $20." These are extremes, of course, but the JDB buys the debt as is and usually they have squat to use for it.

 

They would have to somehow, monetarily, obtain documents from the OC that prove you are actually indebted to the OC, and then prove they (JDB) now own that debt.

 

Look at it this way: You buy a TV from Best Buy and want to return it later. What's the first thing they ask for? The receipt. If you walk in with a receipt from McDonalds for a cheeseburger, they wont accept it. Much like you wont accept BS documents that says the JDB bought bulk debt from the OC. Right?

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I really want to just settle for a decent amount and be done. The one thing I have going for me, at least for another year, is that I qualify for state medical aid, which in Wisconsin exempts you from wage garnishment. Other than my wages I have no assests for them to take.

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The card agreement will have the parameters for when you can elect arbitration. It can usually be elected any time before a judgment is awarded. But since this is a JDB suing you, I say screw arbitration. Tell them to knock themselves out getting whatever they need to prove the debt is yours and see what they come up with. If it's undisputable (100:1 odds it won't be), then elect arbitration.

Here in Calif, the caselaw and standard court procedures say you have to elect arbitration before discovery is started, so really you must make the motion before or after the answer and before doing any discovery. All the times it was tried after discovery was denied because arbitration has different discovery procedures.

and by participating in discovery and answering discovery too the arbitration would be ruled waived, I'm afraid.

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I really want to just settle for a decent amount and be done. The one thing I have going for me, at least for another year, is that I qualify for state medical aid, which in Wisconsin exempts you from wage garnishment. Other than my wages I have no assests for them to take.

Before making that decision, you will have to look at how long they can have a judgement. 20 years down the road the original debt will be doubled possible tripled. If your situation changes ie you win the lotto, the nobel prize, or just get a really good job they could come out of the dark and ruin it.

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The card agreement will have the parameters for when you can elect arbitration. It can usually be elected any time before a judgment is awarded. But since this is a JDB suing you, I say screw arbitration. Tell them to knock themselves out getting whatever they need to prove the debt is yours and see what they come up with. If it's undisputable (100:1 odds it won't be), then elect arbitration.

 

Some courts have ruled that engaging in litigation (requesting discovery, for example) can cause a party to waive their right to arbitration. 

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First off, I think the OP confused DV with what they would need to prove their case in court. It sounds like they filed a case and are now finding out that they will have to pay quite a bit of money to get the proof needed to win their case. I would simply have your lawyer remind them that they cannot charge you the fees for getting the proof as part of their legal fees. What the probably have is a list of accounts and a Bill of Sale that if you lawyer demanded it, would say the accounts are as it with no warranties (in other words, who knows if the debts are really owed).

As for settlement, they almost gave you carte blanch to go as low as 10% - 20% so I would start at $500 and be willing to go up to $1000. That assumes that you have that money to settle up front (don't do payments or a stipulated judgement). If you don't, your only option is to fight and hope that the other side gives up.

Personally, I would have the attorney start discovery and pound the fact that they have no evidence hard. They might give up. In the mean time, if they do want to talk settlement, make your offer. Any offer cannot be used against you in court so you have no worries.

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@WhoCares1000

 

Thank you.  That makes sense.   I wondered why the attorney would request DV after his client has been sued.

 

@Meg870

 

As WhoCares said, since you've been sued, it would seem the attorney has made discovery requests.  Yes, getting extra docs to prove their can cost the JDB, but the only way you'd bear that cost is if they get a judgment against you.

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Tell your lawyer to read this case. It is a violation of 15 USC 1692f to charge for debt validation.  They can be sued for statutory damages and your lawyer can get his fees paid.

 

http://scholar.google.com/scholar_case?case=3806173933790387160&q=sandlin+v.+shapiro&hl=en&scisbd=2&as_sdt=3,33&as_ylo=1996&as_yhi=1997

Also, if I'm not mistaken, they had to file an affidavit with the complaint asserting that the facts are true and correct.  If they did not have any of the necessary documents, how could they ascertain this?  This might be another FDCPA violation.

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