Jump to content

Letter of intent to file suit


Recommended Posts

Hello everyone (or anyone who reads this).

So I've been scouring the site looking for tips and the like in order to assist in the situation i currently find myself in.

I currently have a debt with Portfolio Recovery Associates which has been sent up to Hunt & Henriques, their law firm. I recently received a letter of an intent to file suit on the account and am not sure where to go from here.
The current debt is for a total of $2,797.74.
I have not sent a letter of Debt Validation and have had little to no contact with the Firm.

In truth, I wouldn't mind paying partially on the account, but I seem to no longer have any way of negotiating terms. I have called PRA and they won't discuss anything with me on the account. I contacted H&H and asked them about the account, without agreeing that the debt was mine (wasn't sure if what I said would get me stuck in the long run). When speaking to H&H I informed them that the "intent to file suit" was the first correspondence I had received from them and if there should have been a letter allowing me the chance to ask for Debt Validation. The lady on the line told me if I wanted DV, that I could just send a letter (as she laughed at me).

Also, quick and random question....the original debt from PRA and the supposed debt from H&H don't match up. Does this matter?

So my questions are:

1. How do I go on from here about possibly negotiating a reduced amount? (is it too late? I have seen on some posts that some people have received letters for a reduced amount before going to court.)

2. Should I wait and see if H&H pursues this account further into court?

3. Why am I so stupid?

 

Any advice or help would be greatly appreciated.  Please help. Thank you.

Link to comment
Share on other sites

48 minutes ago, danny0220 said:

1. How do I go on from here about possibly negotiating a reduced amount? (is it too late? I have seen on some posts that some people have received letters for a reduced amount before going to court.)

It is not too late but before you get there ( you have LOTS of time to settle this if you want to ) who is the original creditor that PRA bought the debt from?

49 minutes ago, danny0220 said:

2. Should I wait and see if H&H pursues this account further into court?

Maybe.  When did you default on the account?

49 minutes ago, danny0220 said:

3. Why am I so stupid?

You aren't.  You are just entering a world you have no experience in but soon enough you will learn a lot and won't be so intimidated.

  • Like 1
Link to comment
Share on other sites

Hello! Thanks for the response!

Who is the original creditor that PRA bought the debt from?
Synchrony Bank Banana Republic Credit Card

When did you default on the account?
October 28, 2016

Thank you for the encouraging words. I keep jumping around topics on the forum for insight but everything is becoming a jumbled mess of words in my head. Plus...there's that fear of court looming over me.

Link to comment
Share on other sites

I would send the DV request anyways as the first thing. No sense in throwing away your rights. Since the threshold for answering the DV is so low, they will probably answer it anyways. That will at least buy you a little time to do research before they can file in court (because the law office must answer the DV). Familiarize yourself with the FDCPA and the Rosenthal Act (the CA state version of the FDCPA which gives even more rights).

2 things to note about the California courts. They are very very slow because of huge backlogs and the system is consumer friendly compared to other states. There are strict rules that the plaintiff must follow in order to win a judgement in a case where the defendant files an answer and fights back. Most of the time, JDB's such as PRA cannot follow those rules when a prepared defendant forces them to.

The 2nd thing you need to do after send the DV is try to find the last card agreement before you defaulted. Since the default is new, you might have it in your records. If not, a copy should be available on the CFPB website. You want the last agreement made for your card before default. What you want to do is find the arbitration clause. Synchrony is famous for using those so you should have no issue finding it. You want to verify that JAMS is the preferred (or only option), that there is no small claims exception to arbitration, and that they plaintiff (Synchrony) will pay the arbitration fees. If the contract has these items (and odds are high that it does), then you have 2 options:

  1. Do nothing and wait to go to court and then file a MTC arbitration forcing them into a set up where they would have to pay tens of thousands of dollars what might not get reimbursed in order to collect $2800 from you (which PRA will not do)OR
  2. Send a letter to H&H demanding arbitration right now. You can include a small settlement amount as a way to make you go away (but I would not make that more than $500 as you will see below).

The 3rd thing to do is learn how the court system works in California so that if you are forced down that path, you know how to make your stand there. Learn the rules of CCP 98 and how you can use them to your advantage (and associated case law). There are many examples of that here on this site.

Finally, as I said before, the settlement amount should be small and not any more than $500 on this debt. Since this is relatively new, PRA probably paid about $250 for this debt and hence, even a $500 settlement is profit for them. Some on this site will tell you not to settle and fight as described above instead but I think it is best to show all possibilities and let they poster decide. If you do come up with a settlement amount, make sure you get something in writing stating that the amount settles the debt AND do not give H&H any electronic access to your accounts. Payments will  be via cashiers check or money order only. Once you send in the payment, staple the receipt to the agreement and keep that in your records for the rest of your natural life because this debt will be resold and this will resurface. You know anyone at H&H or PRA is lying to you if their mouths are moving and the sounds they are making are that of any intelligeble language.

I know this sound like quite a bit to figure out but many people with no legal experience before you have come here and have fought their cases. No question is considered too stupid here.

Link to comment
Share on other sites

Thank you for the response!

I will be sending a DV letter right away.

Do you think it best to avoid all conversations via phone? I personally like the idea of demanding arbitration and paying a settlement fee, but not sure if that'll apply to me. Sorry, I read through the Arbitration provision on the site but it reads like a computer manual.
 

43 minutes ago, WhoCares1000 said:

Send a letter to H&H demanding arbitration right now. You can include a small settlement amount as a way to make you go away (but I would not make that more than $500 as you will see below).

Now on this part. Is there a specific format I should be writing this in or is it in my words expressing my demand for arbitration?

I really appreciate your insight and help @WhoCares1000.

Thank you.

 

As for arbitration on the CC that i had, I could only find what was currently available online and not sure if it mentions anything about JAMS?

I'll just post what it states rather than a link.

19. ARBITRATION PROVISION. Please read this arbitration provision carefully. IT PROVIDES THAT ANY PAST, PRESENT OR FUTURE LEGAL DISPUTE OR CLAIM OF ANY KIND, INCLUDING STATUTORY AND COMMON LAW CLAIMS AND CLAIMS FOR EQUITABLE RELIEF, THAT RELATES IN ANY WAY TO YOUR ACCOUNT, CARD OR YOUR RELATIONSHIP WITH US (“CLAIM”) WILL BE RESOLVED BY BINDING ARBITRATION IF EITHER YOU, WE OR BANANA REPUBLIC ELECTS TO ARBITRATE.

Right to Reject Arbitration: You may reject this arbitration provision, in which event neither you nor We will have the right to require arbitration.  Rejection will not affect any other aspect of these terms. To reject the arbitration provision, you must send us a notice within 60 days after you have applied for a credit card. The notice must include your name, address, and account number and be mailed to PO Box 981429, El Paso TX 79998-1429. This is the only method you can use to reject the arbitration provision.

As used in this provision: “We,” “Us,” and “Our” mean (1) Synchrony Bank and all of its respective parents, subsidiaries, affiliates, predecessors, successors, assigns, employees, officers and directors (collectively, the “Bank”), and (2) Banana Republic and all of its respective parents, subsidiaries, affiliates, predecessors, successors, assigns, employees, officers and directors (collectively, “Banana Republic”).

This arbitration provision covers all Claims, except that We will not elect to arbitrate an individual Claim brought by you in small claims court or its equivalent, unless that Claim is transferred, removed, or appealed to a different court. This provision replaces any existing arbitration provision between you and Us.

With respect to any arbitration:
• Notice: If you or We elect to arbitrate, the other party must be notified. Your notice must be sent to Synchrony Bank- Americas, Legal Operation, 777 Long Ridge Road, Stamford, CT 06927. Notice can be given after a lawsuit has been filed, in which case it can be made in papers in the lawsuit.
• Administrator: The person who starts the arbitration proceeding must choose an administrator, which can be either the National Arbitration Forum, P.O. Box 50191, Minneapolis, MN 55405, www.arb-forum.com (800) 474-2371; or the American Arbitration Association, 335 Madison Avenue, New York NY 10017, www.adr.org, (800) 778-7879. The actual arbitrator will be selected under the administrator’s rules, and must be a lawyer with at least ten years of experience.
• Applicable Law: These terms involve interstate commerce and this arbitration provision is governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq. (the “FAA”). Utah law shall apply to the extent state law is relevant under Section 2 of the FAA in determining the validity of this provision. The arbitrator has to follow: (1) the substantive law, consistent with the FAA, that would apply if the matter had been brought in court, (2) this arbitration provision, and (3) the administrator’s rules. The arbitrator is authorized to award remedies that would apply if the individual action were in a court (including, without limitation, punitive damages, which shall be governed by the constitutional standards employed by the U.S. Supreme Court). The arbitrator has no authority to conduct an arbitration on a class action basis or to make an award to, on behalf of, or against, any person who is not a named party to the arbitration.
• Location/Fees: The arbitration will take place in a location reasonably convenient to you. If you ask us, we will pay all filing, administrative, hearing and/or other fees the administrator or arbitrator charges up to $2,500. If the cost is higher, you can ask us to pay more and we will consider your request in good faith. Under all circumstances we will pay all amounts we are required to pay under applicable law.
• Judgment/Appeals. Any court having jurisdiction may enter judgment upon the arbitrator’s award. The arbitrator’s decision will be final and binding except for: (1) any appeal right under the FAA; and (2) any party may appeal decisions relating to Claims of more than $100,000 to a three-arbitrator panel appointed by the administrator, which will reconsider all over again any aspect of the appealed award. If you appeal, We will consider in good faith a request that We pay any additional fees of the administrator or arbitrator.

IMPORTANT LIMITATIONS AND RESTRICTIONS: IF A CLAIM GOES TO ARBITRATION, NEITHER YOU NOR WE WILL HAVE THE RIGHT TO: (1) HAVE A COURT OR A JURY DECIDE THE CLAIM; (2) ENGAGE IN DISCOVERY (I.E., THE RIGHT TO OBTAIN INFORMATION FROM THE OTHER PARTY) TO THE SAME EXTENT THAT YOU OR WE COULD IN COURT; (3) PARTICIPATE IN A CLASS ACTION IN COURT OR IN ARBITRATION, EITHER AS A CLASS REPRESENTATIVE OR A CLASS MEMBER; (4) ACT AS A PRIVATE ATTORNEY GENERAL IN COURT OR IN ARBITRATION; OR (5) JOIN OR CONSOLIDATE CLAIMS(S) WITH CLAIMS OF ANY OTHER PERSON. THE RIGHT TO APPEAL IS MORE LIMITED IN ARBITRATION THAN IN COURT. OTHER RIGHTS THAT YOU OR WE WOULD HAVE IF YOU OR WE WENT TO COURT MAY ALSO NOT BE AVAILABLE IN ARBITRATION. ONLY A COURT MAY DETERMINE THE VALIDITY AND EFFECT OF PARTS 3, 4 AND 5 OF THIS PARAGRAPH. IF A COURT SHOULD HOLD SUCH PART(S) TO BE INVALID, THEN THE ENTIRE ARBITRATION PROVISION SHALL BE NULL AND VOID. HOWEVER, THIS WILL NOT LIMIT THE RIGHT TO APPEAL SUCH HOLDING. IF A COURT SHOULD HOLD ANY OTHER PART(S) OF THIS ARBITRATION PROVISION TO BE INVALID, THE REMAINING PARTS SHALL BE ENFORCEABLE. IN NO EVENT SHALL THE INVALIDATION OF ANY PART OF THIS ARBITRATION PROVISION HAVE THE EFFECT OF AUTHORIZING AN ARBITRATOR TO MAKE AN AWARD TO, ON BEHALF OF, OR AGAINST, ANY PERSON WHO IS NOT A NAMED PARTY TO THE ARBITRATION.

This arbitration provision will survive the termination of your account and the card and will remain in force no matter what happens to you or your account. In case of any conflict or inconsistency, this agreement controls over any rules and procedures of the arbitration administrator.

Right to Reject Arbitration: You may reject this Arbitration Provision, in which event neither you nor We will have the right to require arbitration of any Claim. Rejection of the Provision will not affect any other aspect of this Agreement. To reject the Provision, you must send us a notice ("Rejection Notice") that we receive within sixty (60) days after you have applied for your credit card account. Any Rejection Notice will apply only to this Arbitration Provision and not to any other arbitration provision or arbitration agreement, which may apply to a prior agreement with Us. The Rejection Notice must include your name, address, and account number. You must mail your Rejection Notice to Arbitration Opt Out, P.O. Box 981064, El Paso, TX 79998-1064. In the event of any dispute concerning whether you have provided a timely Rejection Notice, you must provide a signed receipt. This is the only method you can use to reject the Arbitration Provision. If the Rejection Notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the Rejection Notice on your behalf.

Scope: This Provision covers all Claims, except that We will not elect to arbitrate an individual Claim brought in small claims court or its equivalent, unless that Claim is transferred, removed, or appealed to a different court.

Starting an Arbitration: To start an arbitration, you or We must give written notice of an election to arbitrate. You must send this notice to GE Consumer Finance, Legal Operations, 777 Long Ridge Road, Stamford, CT 06902. Notice can be given after a lawsuit has been filed, in which case it can be made in papers in the lawsuit. If a notice electing arbitration is given, the Claims shall be resolved by arbitration under this Provision and the rules of the Administrator. You can choose the Administrator in your notice, or by informing Us of your election in writing within twenty (20) days after Our election to arbitrate. The arbitrator will be selected under the Administrator's rules, except that the arbitrator must be a lawyer with at least ten years of experience.

Location and Costs: Any arbitration hearing that you attend will take place in a location that is reasonably convenient for you. At your written request, we will pay all filing, administrative, hearing and/or other fees charged by the Administrator or arbitrator for Claim(s) asserted by you in the arbitration up to $2,500. If you are required to pay any fees in excess of $2,500 and are unable to obtain a hardship waiver from the Administrator, we will consider in good faith a reasonable written request by you to pay all or part of such additional fees. Each party must pay for its own attorneys, experts, and witnesses, regardless of who wins the arbitration, except where applicable law and/or the Administrator's rules provide otherwise. However, we will not seek or accept reimbursement from you of amounts paid by us for attorneys, experts, and witnesses. We will under all circumstances pay any fees or expenses we are required to pay by law.

Governing Law and Discovery (Getting Information): This Agreement involves interstate commerce and this Provision shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq. ("FAA"), and not by any state law concerning arbitration. The arbitrator shall follow applicable substantive law to the extent consistent with the FAA, this Arbitration Agreement, the Administrator's rules, statutes of limitation and claims of privilege, and shall be authorized to award all remedies permitted by the substantive law that would apply if the action were pending in court. Upon the timely request of either party, the arbitrator shall write an explanation of the award's basis. The arbitrator will set rules of procedure and evidence consistent with the FAA, this Provision, and the Administrator's rules. In addition to the parties' rights to obtain information under the Administrator's rules, either party may ask the arbitrator to allow it to obtain more information from the other party.

Effect of Arbitration Award: Any appropriate court may enter judgment upon the arbitrator's award. The arbitrator's decision will be final and binding except for: (1) any appeal right under the FAA; and (2) any party may appeal awards of more than $100,000 to a three-arbitrator panel appointed by the Administrator, which will reconsider de novo any aspect of the appealed award. The panel's decision will be final and binding, except for any appeal right under the FAA. Unless applicable law provides otherwise, the appealing party will pay the appeal's cost, regardless of its outcome. However, We will consider any reasonable written request for Us to bear the cost.

Continued Effect of Arbitration Provision: This Provision will survive the termination of your account and remain in force no matter what happens to you or your account. A party who has asserted a Claim in a lawsuit may still elect to arbitrate any other Claim asserted in the same lawsuit by another party. Except as otherwise provided above, if any portion of this Provision cannot be enforced, the rest of the Provision will continue to apply. In the event of any conflict or inconsistency between this Provision, and the Administrator's rules or other provisions of this Agreement, this Provision will govern.

Link to comment
Share on other sites

58 minutes ago, WhoCares1000 said:

Finally, as I said before, the settlement amount should be small and not any more than $500 on this debt. Since this is relatively new, PRA probably paid about $250 for this debt and hence, even a $500 settlement is profit for them. Some on this site will tell you not to settle and fight as described above instead but I think it is best to show all possibilities and let they poster decide.

I agree that it's not wrong to settle if that works for you - maybe you make $10,000 an hour as a Hand Model, so any time spent defending this is a waste of money.

And please, for the love of <###>, haven't we outgrown the idea that what they paid for a debt has any bearing, whatsoever, on what they will settle for? Whether they paid two cents or two grand, the debt is still for $2,797.74 - which is what they will get if they win. Probably worst advice ever, starting with the first time it was given 15 years ago.

Link to comment
Share on other sites

11 hours ago, Goody_Ouchless said:

I agree that it's not wrong to settle if that works for you - maybe you make $10,000 an hour as a Hand Model, so any time spent defending this is a waste of money.

And please, for the love of <###>, haven't we outgrown the idea that what they paid for a debt has any bearing, whatsoever, on what they will settle for? Whether they paid two cents or two grand, the debt is still for $2,797.74 - which is what they will get if they win. Probably worst advice ever, starting with the first time it was given 15 years ago.

They get the $2800 IF they win. That is not a given anymore and a bird in the hand is still better than 2 in the bush so to speak. It is always a good idea to know what the other side has invested in the process because it will affect how they act. An OC will act more aggressively to get their money in court than a JDB because they have more invested in the debt. The JDB may be more willing to settle in face of having to invest more money which will eat into their profit with the possibility of a negative return on their investment if they lose in court. True, they can sit and demand the full amount or else but even the courts frown on that position.

So yes, knowing what the other side has invested in the debt is a good negotiating tactic today as it was 15 years ago. He who has the most information in a negotiation is the one in power.

Link to comment
Share on other sites

33 minutes ago, WhoCares1000 said:

Ummm, I doubt that is an arbitration agreement that would apply in 2016 because the Minnesota Attorney General put NAF out of business years ago for bad practices. You might want to search for a more recent agreement.

It does apply.  AAA is included, so it is considered a valid agreement.

You are in CA, so many people will tell you not to bother with arbitration because they have good outcomes defending these cases in court.  However, I still believe arbitration is the easier route.  It will cost you nothing and PRA has yet to actually follow through with any arbitration because they will have to pay the $5k cost (making it a loss even if they win the $3k from you).

Since they have not yet filed a suit, you have the option to file a case now in AAA against them to head them off, or if they file suit you would have to file a Motion to Compel Arbitration in court.

Link to comment
Share on other sites

Realize that they can go small claims to get around the arb agreement. The limit there is $10K.

I still suggest that the OP try to find a newer agreement however. It has been so long since NAF has been allowed to do any consumer claims (settlement took place in July 2009) that I cannot believe they would have left that in there but updated for small claims and made other updates. I could be wrong but it never hurts to look. Especially since the OP has some time now with the DV.

Link to comment
Share on other sites

4 hours ago, WhoCares1000 said:

They get the $2800 IF they win.

Not exactly.  They get the amount of the debt unless the Defendant can conclusively prove the amount is wrong, attorney fees and court costs, and post judgment interest.   Yes, the Defendant may be uncollectable currently but with judgments being  good for as much as 20 years in some states and renewable in most there is no worry to immediately try and collect.  Letting a judgment marinate for a few years racking up interest and waiting for assets to build may be in their best interest.   

Settling is about leverage and who has it.  The side with the most leverage has a better interest in settling.  

Link to comment
Share on other sites

5 hours ago, WhoCares1000 said:

It is always a good idea to know what the other side has invested in the process because it will affect how they act. An OC will act more aggressively to get their money in court than a JDB because they have more invested in the debt. The JDB may be more willing to settle in face of having to invest more money which will eat into their profit with the possibility of a negative return on their investment if they lose in court. True, they can sit and demand the full amount or else but even the courts frown on that position.

So yes, knowing what the other side has invested in the debt is a good negotiating tactic today as it was 15 years ago. He who has the most information in a negotiation is the one in power.

This should be embroidered, framed, and made a "sticky" in thread for "Hall of Fame Losers." Have you ever actually dealt with these people? If anything, we have seen OC's offer much more attractive deals than debt buyers. Putting any stock into what a debt buyer paid is up there with using Sovereign Citizen defense, or the other thing where those nuts argue that money isn't real.

Link to comment
Share on other sites

2 hours ago, Clydesmom said:

Not exactly.  They get the amount of the debt unless the Defendant can conclusively prove the amount is wrong, attorney fees and court costs, and post judgment interest.   Yes, the Defendant may be uncollectable currently but with judgments being  good for as much as 20 years in some states and renewable in most there is no worry to immediately try and collect.  Letting a judgment marinate for a few years racking up interest and waiting for assets to build may be in their best interest.   

Settling is about leverage and who has it.  The side with the most leverage has a better interest in settling.  

My comment though is that they only get the full debt (plus all the other costs) IF THEY WIN. If they lose, they get nothing (and in California where the OP is, can even be responsible for the court costs of the defendant). In this case, the OP has a contract with an arbitration clause and is in a state where the courts are consumer friendly. If H&H and PRA realizes they are dealing with an intelligent consumer who knows what they are doing, the smart thing for them would be to take a reasonable settlement and run because the risk could be getting nothing.

Link to comment
Share on other sites

1 hour ago, Goody_Ouchless said:

This should be embroidered, framed, and made a "sticky" in thread for "Hall of Fame Losers." Have you ever actually dealt with these people? If anything, we have seen OC's offer much more attractive deals than debt buyers. Putting any stock into what a debt buyer paid is up there with using Sovereign Citizen defense, or the other thing where those nuts argue that money isn't real.

It is true that you have to argue with debt collectors/JDBs quite a bit to get them to settle but if you are persistent, you will eventually talk to someone with 2 functioning brain cells that are interconnected that will accept a settlement if it is reasonable. Besides, I am not telling the OP to wait for a deal from the JDB. I am saying that if they want to settle, they offer up the amount first and see what they way. In that case it is either deal or no deal.

Having an idea on what was paid for the debt is part of the information needed to determine the amount of the settlement along with any other information (such as can you create a hell for them in arbitration and are the local courts consumer friendly). All that information allows the person to make a good decision on negotiating a reasonable settlement. It also lets you know if there is room to squeeze for a better settlement or if you might be at the point where it is either take it or leave it.

I also know that knowing what the other party paid for the debt is in no way a defense against the debt and I never told the OP to use that defense in court or arbitration. In fact, I would not say that to a collector in negotiations too. Better to not have them know that you can figure that out. However, in this case, it creates a reasonable low ball offer the OP can do to allow the creditor to walk away from a demand for arbitration with some of their dignity intact. If the creditor does not accept it, we continue on the path and then the OP can later decide to up the ante or stick with the fight.

To sum this up, what was paid for the debt has no bearing as a defense against the debt. It does however have bearing when negotiating a settlement.

Link to comment
Share on other sites

17 minutes ago, WhoCares1000 said:

To sum this up, what was paid for the debt...does however have bearing when negotiating a settlement.

Totally false, and, I believe, dangerous. 

I have been part of several settlement negotiations with debt buyers, using a lawyer. The ONLY figure a debt buyer (like Midland) is concerned with is the current face value of the account. Same story has been repeated here, for years, by others.

It is dangerous, in my opinion, as it starts new members off with unrealistic expectations, based on a false premise. I have seen MSJs granted in the middle of "negotiations." It can  happen when Midland offers to settle a 2K debt for 1.8K, and the defendant sits back waiting for them to start negotiating from the $80 they paid for the account.

 

  • Like 1
Link to comment
Share on other sites

55 minutes ago, WhoCares1000 said:

Having an idea on what was paid for the debt is part of the information needed to determine the amount of the settlement along with any other information (such as can you create a hell for them in arbitration and are the local courts consumer friendly). All that information allows the person to make a good decision on negotiating a reasonable settlement. It also lets you know if there is room to squeeze for a better settlement or if you might be at the point where it is either take it or leave it.

I must respectfully disagree.   First, the JDB is not necessarily directly involved in negotiations.    The attorneys appear to have a lot of "say" in the matter.   I believe that's one of the reasons some attorneys dismiss when defendants file an answer.    Those attorneys are merely lazy and only out for default judgments.    We can be pretty much assured that the JDB did not tell the attorneys to dismiss simply under that circumstance, but the point is that those attorneys were able to make that determination.

I've stated it numerous times on these boards that there are both lazy and aggressive attorneys.   That is part of what I believe determines the amount of a settlement, especially with JDBs.   

Another determination is the laws of one's state.   Wage garnishment is an issue.   If a defendant is employed and his state allows for wage garnishment, the JDB has the upper hand.   This also applies to property liens and length of a judgment. 

 

 

Link to comment
Share on other sites

I know when we decided to settle a couple of accounts with Midland in a "bundle," my lawyer felt like we would settle for maybe 10-15% of the total. The cases eventually got separated and we were in court-ordered mediation for one of the accounts. Midland's lawyer wouldn't budge from 85%. When we said "no," she said "OK, we are filing MSJ." While we were going back and forth over settlement number (which, as you can tell, involved no movement on their part) she asked my lawyer "is it a matter of needing another year of billing statements?" They knew they had the goods - what they paid for account never crossed their mind.

Link to comment
Share on other sites

3 minutes ago, Goody_Ouchless said:

I know when we decided to settle a couple of accounts with Midland in a "bundle," my lawyer felt like we would settle for maybe 10-15% of the total. The cases eventually got separated and we were in court-ordered mediation for one of the accounts. Midland's lawyer wouldn't budge from 85%. When we said "no," she said "OK, we are filing MSJ." While we were going back and forth over settlement number (which, as you can tell, involved no movement on their part) she asked my lawyer "is it a matter of needing another year of billing statements?" They knew they had the goods - what they paid for account never crossed their mind.

Not every case is the same. Also, the OP in this case is in a more debtor friendly state than Arizona where it is harder to authenticate records. That is what you are missing here.

Did you ever ask your lawyer where they got that 10% - 15% figure from. After all, my advice to the OP goes even above that range. Just because it never came up does not mean no one ever thought about that. It just means it was not said.

In any case, let's analyze the differences:

Your case:

  1. You were already deep into the court process
  2. You were in a state where the records could be authenticated easily and the courts are creditor friendly
  3. Midland had the records and knew it
  4. Settlement negotiations have been ongoing for a while

In your case, I would have taken the 85% settlement and ran. At that point, what they paid for the debt did not matter because they had the leverage to collect all of the debt if you did not agree to what they offered.

Now, let's look at the OP's case:

  1. Lawyer has indicated an intent to sue so the case has not started yet so they are still very early in the process
  2. OP is in a state where the courts are debtor friendly and business records are harder to authenticate
  3. OP has a copy of a contract which required arbitration
  4. Settlement negotiations have not started yet
  5. Who knows what records PRA even has and if they are admittable

In this case, the OP has more leverage and thus can be more open to seeing if the other side will take a lower settlement. In fact, the OP has a few options besides offering to settle including:

  1. Do nothing and see if they do get sued
  2. Send a refusal to pay letter
  3. Send a demand to arb letter without any offer of settlement
  4. Send a demand to arb letter with an offer of settlement
  5. Send an offer of settlement

Because of those options, at this point, having a general knowledge of what the other side has invested in the debt is important for both how you want to act and what type of settlement to offer. As the case progresses, it will be less important as other factors such as strength of the strategy or information that either side has comes out. I would not stick with my low ball offer if I see things are progressing badly but right now, I would not mind making such an offer in this situation.

So indeed, the importance of what is paid for the debt depends on where you are at in the process and the strength of your cards vs that of your opponent. In this case right now, it is a good piece of information to know.

Link to comment
Share on other sites

3 hours ago, Goody_Ouchless said:

Totally false, and, I believe, dangerous. 

I have been part of several settlement negotiations with debt buyers, using a lawyer. The ONLY figure a debt buyer (like Midland) is concerned with is the current face value of the account. Same story has been repeated here, for years, by others.

It is dangerous, in my opinion, as it starts new members off with unrealistic expectations, based on a false premise. I have seen MSJs granted in the middle of "negotiations." It can  happen when Midland offers to settle a 2K debt for 1.8K, and the defendant sits back waiting for them to start negotiating from the $80 they paid for the account.

 

Of course the plaintiff is only concerned with the current value. They are on the high end of the negotiation. That does not mean that the other side should not know the low end of the figure and then find a middle ground someplace.

Obviously the defendants in such cases were sitting back as you said and not watching their cases progress. They also probably did not take in other information into account (such as the strength of the case of the other side and the leanings of their state courts). If someone is watching what is going on, they will know when to hold them and know when to fold them.

Link to comment
Share on other sites

22 hours ago, WhoCares1000 said:

Realize that they can go small claims to get around the arb agreement. The limit there is $10K.

I still suggest that the OP try to find a newer agreement however. It has been so long since NAF has been allowed to do any consumer claims (settlement took place in July 2009) that I cannot believe they would have left that in there but updated for small claims and made other updates. I could be wrong but it never hurts to look. Especially since the OP has some time now with the DV.

There is no "small claims exception" in the agreement OP posted, so even in small claims arbitration is still an available option to use.

There are plenty of current card agreements in use today that include NAF.  Courts have rules those agreements are valid because they contain a second option (usually AAA), however, even if they did not, almost all of them say something like "or the equivalent" to NAF, which means the court could order either AAA or JAMS which do the same consumer arbitration listed in the agreement.  The whole NAF thing is moot.

Link to comment
Share on other sites

OK, I reread the agreement regarding small claims and you are correct. That is only if the debtor wants to use small claims.

I am still shocked however that these agreements would still contain NAF. They left the consumer realm almost 9 years ago and those things change as often as some people change their underwear. You would have thought they would have removed that by now. Guess they really don't know what is in their agreements anymore than the consumer does.

Link to comment
Share on other sites

16 minutes ago, WhoCares1000 said:

OK, I reread the agreement regarding small claims and you are correct. That is only if the debtor wants to use small claims.

I am still shocked however that these agreements would still contain NAF. They left the consumer realm almost 9 years ago and those things change as often as some people change their underwear. You would have thought they would have removed that by now. Guess they really don't know what is in their agreements anymore than the consumer does.

I very recently dealt with Equifax who still has NAF in their contracts.  Even after a petition to compel in federal court wherein I pointed out that Equifax is intentionally misleading consumers by continuing to list NAF and provided the evidence of NAF being shut out of consumer arbs for almost a decade now, Equifax did not refute that point in their opposition.  I take that as an admission that this is exactly what they and the banks are doing.  Intentionally attempting to confuse and/or scare consumers into not knowing how to properly use arbitration against them.  These companies try very hard to have arbitration available to them while preventing or hiding it from the consumers to use.

Link to comment
Share on other sites

4 hours ago, fisthardcheese said:

I very recently dealt with Equifax who still has NAF in their contracts.  Even after a petition to compel in federal court wherein I pointed out that Equifax is intentionally misleading consumers by continuing to list NAF and provided the evidence of NAF being shut out of consumer arbs for almost a decade now, Equifax did not refute that point in their opposition.  I take that as an admission that this is exactly what they and the banks are doing.  Intentionally attempting to confuse and/or scare consumers into not knowing how to properly use arbitration against them.  These companies try very hard to have arbitration available to them while preventing or hiding it from the consumers to use.

And no wonder most debtors put their heads in the sand rather than stand up and fight.

Link to comment
Share on other sites

  • 1 month later...

i just realized the arbitration stuff i posted may possibly be out of date. I don't seem to be able to find anything from anything further back than 2017.

as for what I found online for 2017, this is what it states in the card agreement for Gap (banana republic is part of).

 

RESOLVING A DISPUTE WITH ARBITRATION
PLEASE READ THIS SECTION CAREFULLY. IF YOU DO NOT REJECT IT, THIS SECTION WILL APPLY TO YOUR ACCOUNT AND PURCHASES, AND
MOST DISPUTES BETWEEN YOU AND US WILL BE SUBJECT TO INDIVIDUAL ARBITRATION. THIS MEANS THAT: (1) NEITHER A COURT NOR A
JURY WILL RESOLVE ANY SUCH DISPUTE; (2) YOU WILL NOT BE ABLE TO PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING; (3) LESS
INFORMATION WILL BE AVAILABLE; AND (4) APPEAL RIGHTS WILL BE LIMITED.
• What claims are subject to arbitration
1. You and we must arbitrate any dispute or claim between you or any other user of your account, and us, our affiliates, agents and/or Gap Inc. if it relates
in any way to purchases from us or The Gap, Inc., including any of its brands, your account, and this agreement except as noted below.
2. We will not require you to arbitrate: (1) any individual case in small claims court or your state’s equivalent court, so long as it remains an individual case in
that court; or (2) a case we file to collect money you owe us. However, if you respond to the collection lawsuit by claiming any wrongdoing, we may require
you to arbitrate.
3. Notwithstanding any other language in this section, only a court, not an arbitrator, will decide disputes about the validity, enforceability, coverage or scope
of this section or any part thereof (including, without limitation, the next paragraph of this section and/or this sentence). However, any dispute or argument
that concerns the validity or enforceability of the Agreement as a whole is for the arbitrator, not a court, to decide.
4
• No Class Actions
YOU AGREE NOT TO PARTICIPATE IN A CLASS, REPRESENTATIVE OR PRIVATE ATTORNEY GENERAL ACTION AGAINST US IN COURT OR
ARBITRATION. ALSO, YOU MAY NOT BRING CLAIMS AGAINST US ON BEHALF OF ANY ACCOUNTHOLDER WHO IS NOT AN ACCOUNTHOLDER
ON YOUR ACCOUNT, AND YOU AGREE THAT ONLY ACCOUNTHOLDERS ON YOUR ACCOUNT MAY BE JOINED IN A SINGLE ARBITRATION
WITH ANY CLAIM YOU HAVE.
If a court determines that this paragraph is not fully enforceable, only this sentence will remain in force and the remainder will be null and void, and the court’s
determination shall be subject to appeal. This paragraph does not apply to any lawsuit or administrative proceeding filed against us by a state or federal
government agency even when such agency is seeking relief on behalf of a class of borrowers, including you. This means that we will not have the right to
compel arbitration of any claim brought by such an agency.
• How to start an arbitration, and the arbitration process
1. The party who wants to arbitrate must notify the other party in writing. This notice can be given after the beginning of a lawsuit or in papers filed in the lawsuit.
Otherwise, your notice must be sent to Synchrony Bank, Legal Operation, P.O. Box 29110, Shawnee Mission, KS 66201-5320, ATTN: ARBITRATION
DEMAND. The party seeking arbitration must select an arbitration administrator, which can be either the American Arbitration Association (AAA),
120 Broadway, Floor 21, New York, NY 10271, www.adr.org, (800) 778-7879, or JAMS, 620 Eighth Avenue, 34th Floor, New York, NY 10018,
www.jamsadr.com, (800) 352-5267. If neither administrator is able or willing to handle the dispute, then the court will appoint an arbitrator.
2. If a party files a lawsuit in court asserting claim(s) that are subject to arbitration and the other party files a motion with the court to compel arbitration, which
is granted, it will be the responsibility of the party asserting the claim(s) to commence the arbitration proceeding.
3. The arbitration administrator will appoint the arbitrator and will tell the parties what to do next. The arbitrator must be a lawyer with at least ten years of legal
experience. Once appointed, the arbitrator must apply the same law and legal principles, consistent with the FAA, that would apply in court, but may use
different procedural rules. If the administrator’s rules conflict with this Agreement, this Agreement will control.
4. The arbitration will take place by phone or at a reasonably convenient location. If you ask us to, we will pay all the fees the administrator or arbitrator charges,
as long as we believe you are acting in good faith. We will always pay arbitration costs, as well as your legal fees and costs, to the extent you prevail on
claims you assert against us in an arbitration proceeding which you have commenced.
• Governing Law for Arbitration
This Arbitration section of your Agreement is governed by the Federal Arbitration Act (FAA). Utah law shall apply to the extent state law is relevant under the
FAA. The arbitrator’s decision will be final and binding, except for any appeal right under the FAA. Any court with jurisdiction may enter judgment upon the
arbitrator’s award.
• How to reject this section
You may reject this Arbitration section of your Agreement. If you do that, only a court may be used to resolve any dispute or claim. To
reject this section, you must send us a notice within 60 days after you open your account or we first provided you with your right to reject
this section. The notice must include your name, address and account number, and must be mailed to Synchrony Bank, P.O. Box 965012,
Orlando, FL 32896-5012. This is the only way you can reject this section.

 

Also, I have gotten another call from them recently, stating they have filed suit and that I should keep a look out for a summons. I told them that I would like to try to settle the amount of 2800 with an offer of $500. They told me they couldn't go any lower than $2400 with discounts applied. Currently i'm unsure as to what I should do. I don't really understand all the wording in the arbitration portion and am going off of previous entries on the forum about people entering arbitration. I'm not even sure if this route applies to me. I did inform the phone operator that I would possibly be going the arbitration route. Sorry gone for so long. Hopefully you haven't all given up on me.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...