Being Sued / Received a letter from O&L Law Firm Representing Velocity Investment for Prosper Loan

[MDanish4]

Hello all, i am lost and in desperate need of help. I am very uneducated when it comes to law.

I had a unsecured personal loan of $10k from Prosper which i paid for for first 8 months then financial crisis hit and couldn't make payments. Stupid of me. Anyways prosper then sold the debt to Velocity Investment LLC after few months of being delinquent. It was $8295

I contacted velocity to try to negotiate but velocity did not want to negotiate. I was still trying to negotiate with them but that time i had some family emergency and had to stop everything. 

Today in the email i received a letter which i am going to paste below.

"

Re: Debt owed by XXXXXXXXXXXXX for a Prosper Funding LLC account
number *6686 ] now assigned to VELOCITY INVESTMENTS, LLC

Dear XXXXXXXXXXXXXX:

Please be advised that this firm has been retained to represent VELOCITY INVESTMENTS
LLC, the assignee of the above referenced debt.

Account balance (as of the date of this letter):
$8,295.29

Unless, within thirty days after receipt of this notice, you dispute the validity of the debt or any
portion thereof, we will assume the debt to be valid. If, within thirty days after your receipt of this
notice, you notify us in writing that the debt or any portion thereof is disputed, we will obtain a
verification of the debt or, if the debt is founded upon a judgment, a copy of any such judgment,
and we will mail to you a copy of such verification or judgment. If the original creditor is different
from the creditor named above, then upon your written request within thirty days after the
receipt of this notice, we will provide you with the name and address of the original creditor

This communication is from a debt collector and is an attempt to collect a debt. Any
information obtained will be used for that purpose.
Sincerely,
O&L LAW GROUP, P.L."

Can someone please direct me to right direction? What do to who to contact? I still can't make the payment of $8k.

[Harry Seaward]

Do you have the original loan contract? I believe Prosper has pretty decent arbitration clause. If that's the case, best to just lay low and wait to get sued, then hit them with a motion to compel private arbitration. 

https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/

 

[MDanish4]

7 minutes ago, Harry Seaward said:

Do you have the original loan contract? I believe Prosper has pretty decent arbitration clause. If that's the case, best to just lay low and wait to get sued, then hit them with a motion to compel private arbitration. 

https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/

 

yes, i do have the contract. Also, i see in there an arbitration clause. I will paste the clause below

"22. Arbitration. RESOLUTION OF DISPUTES: YOU ACKNOWLEDGE THAT YOU HAVE READ THIS PROVISION CAREFULLY, AND UNDERSTAND THAT IT LIMITS YOUR RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU AND US. YOU UNDERSTAND THAT YOU HAVE THE RIGHT TO REJECT THIS PROVISION, AS PROVIDED IN PARAGRAPH (i) BELOW.

(a) In this Resolution of Disputes provision:

(i) "You" and "your" mean the individual entering into this Agreement, as well as any person claiming through such individual;

(ii) "We" and "us" mean Bank and Prosper Funding LLC and each of their respective parents, subsidiaries, affiliates, predecessors, successors, and assigns, as well as the officers, directors, and employees of each of them;

(iii) "Claim" means any dispute, claim, or controversy (whether based on contract, tort, intentional tort, constitution, statute, ordinance, common law, or equity, whether pre-existing, present, or future, and whether seeking monetary, injunctive, declaratory, or any other relief) arising from or relating to this Agreement or the relationship between us and you (including claims arising prior to or after the date of the Agreement, and claims that are currently the subject of purported class action litigation in which you are not a member of a certified class), and includes claims that are brought as counterclaims, cross claims, third party claims or otherwise, as well as disputes about the validity or enforceability of this Agreement or the validity or enforceability of this Section 22.

(b) Any Claim shall be resolved, upon the election of either us or you, by binding arbitration administered by the American Arbitration Association or JAMS, under the applicable arbitration rules of the administrator in effect at the time a Claim is filed ("Rules"). Any arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted. If you file a claim, you may choose the administrator; if we file a claim, we may choose the administrator, but we agree to change to the other permitted administrator at your request (assuming that the other administrator is available). You can obtain the Rules and other information about initiating arbitration by contacting the American Arbitration Association at 1633 Broadway, 10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or by contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949) 224-1810, www.jamsadr.com. The address for serving any arbitration demand or claim on us is Prosper Marketplace, Inc., 221 Main Street, Suite 300, San Francisco, CA 94105, Attention: Compliance.

(c) Claims will be arbitrated by a single, neutral arbitrator, who shall be a retired judge or a lawyer with at least ten years' experience. We agree not to invoke our right to elect arbitration of an individual Claim filed by you in a small claims or similar court (if any), so long as the Claim is pending on an individual basis only in such court.

(d) We will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and we will consider your request to pay any additional arbitration costs. If an arbitrator issues an award in our favor, you will not be required to reimburse us for any fees we have previously paid to the administrator or for which we are responsible. If you receive an award from the arbitrator, we will reimburse you for any fees paid by you to the administrator or arbitrator. Each party shall bear its own attorney's, expert's and witness fees, which shall not be considered costs of arbitration; however, if a statute gives you the right to recover these fees, or fees paid to the administrator or arbitrator, then these statutory rights will apply in arbitration.

(e) Any in-person arbitration hearing will be held in the city with the federal district court closest to your residence, or in such other location as you and we may mutually agree. The arbitrator shall apply applicable substantive law consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if requested by either party, provide written reasoned findings of fact and conclusions of law. The arbitrator shall have the power to award any relief authorized under applicable law. Any appropriate court may enter judgment upon the arbitrator's award. The arbitrator's decision will be final and binding except that: (1) any party may exercise any appeal right under the FAA; and (2) any party may appeal any award relating to a claim for 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 by you for us to bear the cost.

(f) YOU AND WE AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN OUR INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and we agree otherwise in writing, the arbitrator may not consolidate more than one person's claims. The arbitrator shall have no power to arbitrate any Claims on a class action basis or Claims brought in a purported representative capacity on behalf of the general public, other borrowers, or other persons similarly situated. The validity and effect of this paragraph (f) shall be determined exclusively by a court, and not by the administrator or any arbitrator.

(g) If any portion of this Section 22 is deemed invalid or unenforceable for any reason, it shall not invalidate the remaining portions of this section. However, if paragraph (f) of this Section 22 is deemed invalid or unenforceable in whole or in part, then this entire Section 22 shall be deemed invalid and unenforceable. The terms of this Section 22 will prevail if there is any conflict between the Rules and this section."

[Harry Seaward]

I normally advise using AAA for these cases, but based off this statement from the agreement, I think I'd use JAMS instead. 

5 minutes ago, MDanish4 said:

d) We will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and we will consider your request to pay any additional arbitration costs. If an arbitrator issues an award in our favor, you will not be required to reimburse us for any fees we have previously paid to the administrator or for which we are responsible.

The reason is JAMS has "consumer minimum standards" which dictates that the consumer in an arbitration action only has to pay a $250 filing fee, so the "up to $1,000" language from the agreement is moot. There is some debate over what can happen with fees at the conclusion of the case, but if you read that link I posted earlier, you'll see this case will never make it to the "end".

[Harry Seaward]

I just read that statement again. 

"We will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000"

I think one could make an argument that they are saying they will pay all filing and administrative fees, and separately pay arbitrator fees up to $1,000. Like you would have to pay nothing where you would normally have to pay the $250 consumer portion of filing/admin fees. 

[MDanish4]

12 hours ago, Harry Seaward said:

I think one could make an argument that they are saying they will pay all filing and administrative fees, and separately pay arbitrator fees up to $1,000. Like you would have to pay nothing where you would normally have to pay the $250 consumer portion of filing/admin fees. 

Should I still wait to be sued?

Is there a way i can get them to negotiate somehow so i dont have to deal with this court thing?

[Harry Seaward]

It's entirely possible you'll never get sued if you just leave this be. 

One approach to arbitration is preemptive arbitration where you assert your own claims against them pre-lawsuit. Say they violated the FDCPA in some way. You bring that claim to arbitration before they sue you. The problem I have with this approach is that, as I said, they may have never sued you, but now they are contractually forced to arbitrate your claim. In response, they will almost certainly bring counter claims against you for the debt you owe. You will have effectively sued yourself. You will then have the upper hand in negotiating, but if your goal is to avoid the "court thing", you've done it by creating an arbitration thing that will require you to be 10x more (pro)active than you would have ever had to be if you had just let them sue you first. 

[MDanish4]

3 minutes ago, Harry Seaward said:

It's entirely possible you'll never get sued if you just leave this be. 

One approach to arbitration is preemptive arbitration where you assert your own claims against them pre-lawsuit. Say they violated the FDCPA in some way. You bring that claim to arbitration before they sue you. The problem I have with this approach is that, as I said, they may have never sued you, but now they are contractually forced to arbitrate your claim. In response, they will almost certainly bring counter claims against you for the debt you owe. You will have effectively sued yourself. You will then have the upper hand in negotiating, but if your goal is to avoid the "court thing", you've done it by creating an arbitration thing that will require you to be 10x more (pro)active than you would have ever had to be if you had just let them sue you first. 

Understood. As suggested, I will just stay low. If they do decide to sue me than I will just proceed to arbitrate. Thanks you for the explanation, much appreciated. In future, i will be needing your/this forum's help.

[MDanish4]

Hello,

Unfortunately I have been sued. I have not been served yet but o can see the case on County of Clerk's website. 

My question is now that should I still file motion to compel private attribution OR should I hire a lawyer? Will hiring a lawer cost me fortune? Is there any chance laywer will be able to win the case? Please advise

[Clydesmom]

20 minutes ago, MDanish4 said:

My question is now that should I still file motion to compel private attribution OR should I hire a lawyer?

Who is suing you?  The original creditor or a junk debt buyer?  Whether you can even elect arbitration very much depends on this.  Some creditors have a carve out against arbitration on small claims or debt cases and Capital One has outright removed it as an option almost a decade ago.

22 minutes ago, MDanish4 said:

Will hiring a lawer cost me fortune?

Not necessarily.  Most good consumer attorneys will do the first consult for free.  While waiting to be served you can consult a few and see what your options are.  Some offer a lump sum fee for representation but they should tell you exactly what to expect to pay up front and what you get for that fee.

23 minutes ago, MDanish4 said:

Is there any chance laywer will be able to win the case?

There is always a chance.  NO lawyer should guarantee you a win however,.  No one can guarantee that.

[MDanish4]

21 minutes ago, Clydesmom said:

Who is suing you?  The original creditor or a junk debt buyer?  Whether you can even elect arbitration very much depends on this.  Some creditors have a carve out against arbitration on small claims or debt cases and Capital One has outright removed it as an option almost a decade ago. 

My original creditor was Prosper, they sold the debt to Velocity Investment LLC and now O&L Law Group is representing Velocity LLC (JDB). 

[Clydesmom]

5 hours ago, MDanish4 said:

My original creditor was Prosper, they sold the debt to Velocity Investment LLC and now O&L Law Group is representing Velocity LLC (JDB). 

Okay, we have encountered Velocity here before.  A MTC arbitration is your best option.  I can recall at least 2 other threads where they folded when a MTC was approved by the court.

[MDanish4]

14 hours ago, Clydesmom said:

Okay, we have encountered Velocity here before.  A MTC arbitration is your best option.  I can recall at least 2 other threads where they folded when a MTC was approved by the court.

For MTC, I will have to send my MTC along with my answer, right? Also, will I still have to appear in court to get the MTC approved? 

What happens after filing and answer/MTC?

[RA coleman]

So, we were in the same boat. Did a motion to dismiss or compel arbitration. Then requested arbitration against  Prosper. Odd thing is Prosper is now offering me $1000 to settle without arbitration. I wonder how this affect things with velocity when the settlement states “all parties have not and will not in any manner, assign, transfer, convey or sell any rights, actions, cause to actions related to the matters and that they are the only persons entitled to recover for any damages under such claims. 

[LaneBlane]

On 4/17/2019 at 5:39 PM, Harry Seaward said:

I normally advise using AAA for these cases, but based off this statement from the agreement, I think I'd use JAMS instead. 

The reason is JAMS has "consumer minimum standards" which dictates that the consumer in an arbitration action only has to pay a $250 filing fee, so the "up to $1,000" language from the agreement is moot. There is some debate over what can happen with fees at the conclusion of the case, but if you read that link I posted earlier, you'll see this case will never make it to the "end".

The arbitration clause spells out what will happen with fees at the conclusion of the case:  "If an arbitrator issues an award in our favor, you will not be required to reimburse us for any fees we have previously paid to the administrator or for which we are responsible."  According to JAMS consumer rules, they would be responsible for anything above and beyond the consumer's filing fee.

[Ihatelawsuits]

On ‎4‎/‎17‎/‎2019 at 6:06 PM, MDanish4 said:

Hello all, i am lost and in desperate need of help. I am very uneducated when it comes to law.

I had a unsecured personal loan of $10k from Prosper which i paid for for first 8 months then financial crisis hit and couldn't make payments. Stupid of me. Anyways prosper then sold the debt to Velocity Investment LLC after few months of being delinquent. It was $8295

I contacted velocity to try to negotiate but velocity did not want to negotiate. I was still trying to negotiate with them but that time i had some family emergency and had to stop everything. 

Today in the email i received a letter which i am going to paste below.

"

Re: Debt owed by XXXXXXXXXXXXX for a Prosper Funding LLC account
number *6686 ] now assigned to VELOCITY INVESTMENTS, LLC

Dear XXXXXXXXXXXXXX:

Please be advised that this firm has been retained to represent VELOCITY INVESTMENTS
LLC, the assignee of the above referenced debt.

Account balance (as of the date of this letter):
$8,295.29

Unless, within thirty days after receipt of this notice, you dispute the validity of the debt or any
portion thereof, we will assume the debt to be valid. If, within thirty days after your receipt of this
notice, you notify us in writing that the debt or any portion thereof is disputed, we will obtain a
verification of the debt or, if the debt is founded upon a judgment, a copy of any such judgment,
and we will mail to you a copy of such verification or judgment. If the original creditor is different
from the creditor named above, then upon your written request within thirty days after the
receipt of this notice, we will provide you with the name and address of the original creditor

This communication is from a debt collector and is an attempt to collect a debt. Any
information obtained will be used for that purpose.
Sincerely,
O&L LAW GROUP, P.L."

Can someone please direct me to right direction? What do to who to contact? I still can't make the payment of $8k.

 

[Harry Seaward]

11 hours ago, LaneBlane said:

"If an arbitrator issues an award in our favor, you will not be required to reimburse us for any fees we have previously paid to the administrator or for which we are responsible."

Good catch! 

[fisthardcheese]

It's too bad we never get followups to these cases so we can help others better.

[debtfree2022]

This was the most helpful thread I have found on this matter. I have also received a letter from a law firm representing Velocity LLC on a charged off debt from Prosper. My question is how do i go about filing a MTC? Is there a form out there that I need or am I just writing a letter?