redrose06

Received summons from Velocity Investments is Arbitration in the best way to go?

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I received a summons from Velocity Investments for a loan with Avant taken out back in 2014.  It was taken out when I lived in Florida for a company that I owned.  The interest rate was 35.90%.  I did pay on it until Sept of 2017 with the loan still had time remaining on it.  The company did not make it and I moved to Georgia.  I was served to pay a balance of $8920  and  $1372 in interest.  I paid a total of $9679 principal and $15311 of interest they said with the payments I  already made on the loan of $18,600.   I never heard anything from anyone, no letters from any collection agency, Avant sent 1 letter about the balance early 2018 and marked it paid in full and in good standing on my credit report.  I plan on sending a response to he court stating i am not indebted to Plaintiff in any amount.  I do not feel i should owe any thing due to it being for  business that did not make it and the fact the interest is way above any normal limit.  I also lived in a different state at the time not sure if that is a big defense

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They claim I owe $10,292.57.   Plaintiff demands judgment against Defendant for the sum of$8,920.38 in principal, $1,372.19 in interest and fees, and $110. 00 as court costs.   There is an arbitration clause in it where you go to either AAA or JAMS and they will advance the fees if you ask the to.  If the final judgement of the arbiter is over $10 K you can appeal the decision.You pay your attorney fees and other expenses.  if allowed by law attorney fees and other reasonable fees re allowed  by law.  I  win I pay nothing.  If the arbitrator awards me funds we dont reimburse them any fees. 

I am thinking I should file for an arbitration ?   thoughts?

 

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Can you explain this further? What is the timing of everything i quoted below in relation to the current lawsuit? Why was the interest $15,000 when the principal was only $9,600?

22 hours ago, redrose06 said:

  I was served to pay a balance of $8920  and  $1372 in interest.  I paid a total of $9679 principal and $15311 of interest they said with the payments I  already made on the loan of $18,600. 

 

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the original loan  was $18,600 back in Sept of 2014.  My last payment was made was Sept of 2017 and at that time I had paid the a total of the following:  Principal $9679.00 - Interest $15311.00 for a total of  $24,990.00 interest rate of 35.90%.  Based on the paperwork I received those are the totals of how they applied my payments of 4 years.  Velocity is saying I still owe $10,292.57. Which is remaining principal $8920.00  and remaining interest $1372.00 along with $110 in court costs.  That makes up the total $10,292.57.  

I did file a motion to Compel and a answer to the court last week stating the Lack of Subject Matter Jurisdiction – The underlying contract contains a private arbitration clause which the Defendant has elected to exercise. Therefore, This Court does not have jurisdiction to hear this matter”.

Today I got a notice that the judge told the clerk to set it up for a court date but I don' think they had time to see my Motion to Compel although it was accepted.  According to the strategy and other posts I should show up to court and state that I have filed the Motion to Compel and do not wish to have this heard in this court.  due to the above statement unless I hear differently.  I have not done filed  with the arbitration company yet and with the notice from the judge that I see today i am unsure if i should go ahead and do that yet. I am sure they hope he will deny the arbitration motion.  Is there anything else I should do before then?  Am I on the right track?  My goal here is to pay them ZERO...  they have gotten enough from other people they did not know how to fight back or could not  and I don't want to line their pockets any further.  Please let me know your thoughts and advice.  

Thank you

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59 minutes ago, redrose06 said:

My goal here is to pay them ZERO...  they have gotten enough from other people they did not know how to fight back or could not  and I don't want to line their pockets any further. 

Unfortunately those probably weren't the terms you agreed to when you took the loan...

 

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The terms of the loan was for a business that went under and technically I cannot be personally be gone after for a business loan.   Which is what they are doing.  So your comment is not quite correct Goody_Ouchless. 

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2 hours ago, redrose06 said:

The terms of the loan was for a business that went under and technically I cannot be personally be gone after for a business loan.

Technically or LEGALLY?  There is a major difference.  You need to read the loan agreement you signed.  MOST business credit is issued with a personal guarantee as a back up for businesses that have not been established for an average of five years or more or with a solid Dun and Bradstreet history.  @Goody_Ouchless is very much correct in that the terms of what you signed dictate what will happen in court.

On 2/21/2020 at 8:39 AM, redrose06 said:

I do not feel i should owe any thing due to it being for  business that did not make it and the fact the interest is way above any normal limit. 

Unless you filed bankruptcy for the business its going under is not a defense.  Plus, as I said above if there is a personal guarantee in that loan contract you are responsible UNDER CONTRACT LAW.  You also have a major problem in that even though they are suing you under the personal guarantee this was a business loan which means you do not have the consumer protection laws like the FDCPA to support you.

As for the interest being high:  that tells me that your business had no solid financial background which increases the chances there is a personal guarantee involved.  You certainly had no problem with that interest rate when you signed the loan documents and took the money.  The rate won't be a defense in your case.

On 2/21/2020 at 8:39 AM, redrose06 said:

I also lived in a different state at the time not sure if that is a big defense

It is not.  Georgia does not have a borrowing statute.

9 hours ago, redrose06 said:

Today I got a notice that the judge told the clerk to set it up for a court date but I don' think they had time to see my Motion to Compel although it was accepted. 

Are you being sued in Magistrate Court?  If you are then the Judge hasn't even looked at the motion and won't until the day of trial.  You do not file them in advance in Magistrate Court.  

What county is this in?

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Being that this was a business debt, you will be liable for 1/2 of the arbitration fees, if you pursue that route. 

Do you have proof of the payments you made comprising the $24,990? Was this paid to the original creditor? Do you have something from this entity saying the debt was satisfied? 

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I do have proof of the payments the original creditor is Avant  and all payments were mad to them.  I do not have anything in writing saying it was satisfied.  The loan was taken out when I lived in Florida and the business was incorporated in Florida.  From what I see in the state of Florida it states:   In Florida, the maximum interest rate that can be charged is 18% for loans that are up to $500,000 and 25% on loans that are greater than that amount.   The are only suing me in Fulton county Georgia because I live here now.   Should the rules not be adjusted to he state where the load was taken out in? Not where you live in presently?

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It appears on 3/12 there is a motions hearing at 9 am then on 4/6 here is a magistrate meditation set up at 11 am.  Letters were mailed but I dont have them yet.  I just have to ask a question here I have read all the posts to all threads in the forum pertaining to velocity investments as well as to others companies.  In none of the other threads do I see some of the the same type of comments as I have seen in some of my thread.   the reason I posted here was because I saw a place to provide advice and support.  We are all human and no one is perfect... every person on here signed a load agreement, they all owed technically or legally what the balance was listed however that is not what I read in the other posts and that is why I choose to put my circumstances out there. However, the answers I got were vastly different then others got.   They are also vastly different then  even I got from my paid lawyer.   That is fine though.. but my interest here was the strategy support that others got.  I guess i should not assume that is something that goes out to everyone. 

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On 2/26/2020 at 12:54 PM, redrose06 said:

the original loan  was $18,600 back in Sept of 2014.  My last payment was made was Sept of 2017 and at that time I had paid the a total of the following:  Principal $9679.00

.Ok, so you still owed over 1/2 of the loan amount when you stopped paying?

If so, this part below sounds about right.

On 2/26/2020 at 12:54 PM, redrose06 said:

Velocity is saying I still owe $10,292.57. Which is remaining principal $8920.00  and remaining interest $1372.00 along with $110 in court costs.  That makes up the total $10,292.57.

 

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5 hours ago, redrose06 said:

In Florida, the maximum interest rate that can be charged is 18% for loans that are up to $500,000 and 25% on loans that are greater than that amount.

The problem is Avant/Web Bank is an internet based company not FL which changes the interest rate restrictions.  The laws of FL do not apply in regards to the rate.  WebBank is incorporated in Utah.  Your next major problem is "usury" interest rates only apply when there is no contract.  When there is a written contract between the parties then higher than statutory interest rates can be charged if both parties agree to the rate.

Your next major problem is this is a business loan.  That FL cap is for personal credit not business. Usury does not apply to business loans.  You cannot use it as a defense.

5 hours ago, redrose06 said:

The are only suing me in Fulton county Georgia because I live here now.   Should the rules not be adjusted to he state where the load was taken out in? Not where you live in presently?

Because they are suing you based on your personal guarantee of a business loan they have to sue you where you currently are.  Avant is internet based so the laws of FL will not apply. Even then it doesn't matter.  You cannot use usury interest as a defense for a business loan regardless of what state they sue you in.  

2 hours ago, redrose06 said:

so what exactly are you saying Harry Seaward  by your comment?

Do you no longer agree with the link you provided previously?

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

He is trying to get you to understand there is a huge downside to arbitration for business debts.  Consumer laws do not apply.  When a consumer chooses arbitration for a debt from personal credit their expense is capped at $200 or $250 maximum out of pocket expenses depending on which arbitration firm he/she chooses.  If they lose the cost of the entire arbitration process cannot be shifted to them.  The creditor pays the bulk if not all the expense.  That is NOT true for business debts.  The costs can be split 50/50 between the two parties or in a worst case scenario the losing party gets stuck with the entire cost.  Arbitration can cost anywhere from$35,000 to upwards of $100,000 or more depending on how deep it goes and how long it takes.  Oh, and you don't pay at the end. You have to pay as the expenses come in.  As in, it is $X amount to file the case and then when it comes time to pick an arbitrator you now owe another $5k and nothing happens until both sides pay it. Do you have that kind of money to see it through to the end if your motion is granted?  Can you afford to lose and be saddled with the entire cost?

4 hours ago, redrose06 said:

In none of the other threads do I see some of the the same type of comments as I have seen in some of my thread.   the reason I posted here was because I saw a place to provide advice and support.  We are all human and no one is perfect... every person on here signed a load agreement, they all owed technically or legally what the balance was listed however that is not what I read in the other posts and that is why I choose to put my circumstances out there. However, the answers I got were vastly different then others got.   They are also vastly different then  even I got from my paid lawyer.   That is fine though.. but my interest here was the strategy support that others got.  I guess i should not assume that is something that goes out to everyone. 

Here is what you keep trying to ignore:  you are being sued for a business debt.  You are reading the advice given to consumers being sued for personal debt.  Two entirely different legal premises. Why have you been treated differently?  Well for starters the amount of out of control complaining you have done about the amount of money and the interest rate.  The time to be concerned about that was BEFORE you signed the loan contract and took the money.  NOT after the business failed and you defaulted.  If you thought the interest rate was usury then you should have declined. You made a conscious and informed choice to take out the loan.  It isn't Avant or Velocity's problem the business failed.  If they didn't try to recoup all their debts their business would fail too.  

You cannot try your case the same way a consumer would.  You have already made one major mistake in filing your motion to compel in advance when being sued in Magistrate Court.  You haven't bothered to educate yourself on the rules of civil procedure for Magistrate Court.

So here is my advice as someone who lived in GA for 17 years and is familiar with Fulton County Magistrate Court.  You need to re-think your arbitration strategy because given that this is a business loan the consumer rules will not apply and unless you have a spare $50,000 lying around you cannot afford that route.  The Magistrates in Fulton County are REAL judges with tons of legal experience.  They are not going to be cavalier about the law.  They will likely hold you to a more rigid standard because this was a business loan.  

If you want to attempt the usury interest argument then you better have plenty of case law from GA and Utah to support your claim.  I say both because you are being in sued in GA and the contract likely says the laws of Utah apply.  

You need to read EVERY sentence of the loan agreement you signed and be acutely familiar with it especially where it says what state laws apply to the agreement.

Last:  when you go in to Fulton County Magistrate Court drop the butt hurt "wahhh my business failed I shouldn't have to pay back the loan I took out" whiny approach.  The Magistrates will have zero tolerance for it.  Don't believe me? Try it.  I dare you.

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On 2/21/2020 at 3:51 PM, redrose06 said:

There is an arbitration clause in it where you go to either AAA or JAMS and they will advance the fees if you ask the to.  If the final judgement of the arbiter is over $10 K you can appeal the decision.You pay your attorney fees and other expenses.  if allowed by law attorney fees and other reasonable fees re allowed  by law.  I  win I pay nothing.  If the arbitrator awards me funds we dont reimburse them any fees. 

Also keep in mind because this is a business debt the arbitration rules of AAA or JAMS for commercial debt will apply not the consumer terms listed in the agreement.  Arbitration forum rules apply.

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13 hours ago, redrose06 said:

I didn't provide that link in this thread. Business debts are an entirely different animal, and not what the arbitration strategy was intended to counteract. 

A bad case in court is an equally bad case in arbitration. The entire strategy of arbitration is based on the deterrent principal that the JDB will have to pay much more than the debt is worth in order to collect it. Because you, as a business, will be sharing the costs of arbitration (and having it reallocated entirely to you when you lose), that deterrent is significantly reduced. That's not to say velocity won't walk away from arbitration. I'm just letting you know that the amount of your debt, and the fact that it was used for business purposes, changes the dynamics enough that the possibility of catastrophic results in your case is significantly increased. 

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