Received notice of intent to file suit (Hunt & Henriques)

[Sunshine2020]

I received a notice of intent to file suit today from law firm Hunt & Henriques. This is the first correspondence I have received from them, though I get a call weekly from them. I have yet to speak with them. This is for a debt that I owe to Citibank that is within SOL in California. I am unemployed and my financial situation is bad. Due to the pandemic, I’m having a hard time finding work. I don’t own a house, nor a car, and have no assets, or any way to pay right now. It sounds like they will be suing soon and I’m worried and not sure what to do next. The letter was dated 9 days ago and I received it today. I’m wondering if it would help at all to call them and explain my situation in the hopes it can stop any potential lawsuit. My intent is to settle or come up with a payment plan when I’m able to. I would appreciate and advice. Unfortunately I cannot afford an attorney. 

[BackFromTheDebt]

You won’t be able to settle this now. 
 

Here are the cold, hard facts.  There is good news and bad news.  
 

First, the bad news.  They have zero incentive to settle right now.  Their only incentive to settle would be if you had some way to pay the settlement.  You don’t.  
Their best bet is to get a judgment against you, let the interest charges rack up against you until you are back on your feet, then garnish wages that will really hurt until paid off.  
And the garnishments will happen when you need money the most to get back on your feet. 
 

The good news: there may be ways to fight this.  Things may be easier for you in California. 
 

We don’t have enough information to tell you your best strategy.  Your best strategy may be arbitration. The problem is, Citi has a small claims exclusion for arbitration.  The way around that is to file in arbitration before they sue if the amount is small enough for small claims.  If not, wait until sued is usually the best bet. 
If you are broke, you can arbitrate for free in California   

In addition, there may or may not be other ways to fight this. There are techniques specific to Cali I really don’t know much about.  
 

Your first step is to do some homework.  You can buy a little time by sending a DV letter to the attorney.  They can’t collect until they answer the letter.  
 

In the meantime,  look up the arbitration thread mostly by @fisthardcheese

[Sunshine2020]

I appreciate you taking the time to answer my post. Here is a bit more information. The debt is just over $6000 which I believe does not qualify for small claims court. The last payment made to Citibank was in February of this year. I’ve also searched my name in the court for my county and came up with no search results. Does that mean they have not sued me yet? I will do my research on arbitration now. Thank you again. 

[BV80]

23 minutes ago, Sunshine2020 said:

I’ve also searched my name in the court for my county and came up with no search results. Does that mean they have not sued me yet?

It means a lawsuit has not yet been filed.  That is why you were sent an “intent” to sue.  

[womanonfire]

On 11/22/2020 at 4:05 AM, BackFromTheDebt said:

We don’t have enough information to tell you your best strategy.  Your best strategy may be arbitration. The problem is, Citi has a small claims exclusion for arbitration.  The way around that is to file in arbitration before they sue if the amount is small enough for small claims.  

The notion that you can file arbitration before you are sued is very interesting. Can this really work? I have three Citi cards, one is business debt and two are personal and nine Synchrony cards, all personal. I've started the debt settlement process to pay these down but if I can't get everyone to around 40%, it probably won't work. 

Have you or @fisthardcheeseseen this tactic used before this way? I'm not sure how this works if you actually owe the debt. Is this an offensive or defensive action? 

And I really wish folks would come back and let us know what happened. 

[WhoCares1000]

For Synchrony, either settle or wait until they sue you. They have a great arbitration clause and even if the Magistrate Court does not accept it, you simply appeal to the State or Superior Court who will know about it.

As for Citibank, that depends on if the amounts due are low enough to be in Magistrates Court. If they are, then you might need to consider a preemptive strike with arbitration. If not, then wait for those to be filed too.

[WhoCares1000]

Also, the business debts are not eligible for the reduced arbitration rates so you might want to be careful with those (or aggressively settle those first).

[womanonfire]

6 hours ago, WhoCares1000 said:

For Synchrony, either settle or wait until they sue you. They have a great arbitration clause and even if the Magistrate Court does not accept it, you simply appeal to the State or Superior Court who will know about it.

As for Citibank, that depends on if the amounts due are low enough to be in Magistrates Court. If they are, then you might need to consider a preemptive strike with arbitration. If not, then wait for those to be filed too.

Thanks! I wonder if a suggestion of arbitration for the Synchrony cards would be a helpful negotiating tool. I want these folks to work with me and I don't want piss them off but I also want to them to know that I'm not going to make it easy for them in the least. 

Citi is low enough to be in Magistrate Court; they add up to around 7k total between three accounts. But one is a business card with $1500. 

On a side note and regarding another account I have that may have arb agreement (Webbank, Paypal Working Cap), I can't find anyone in any forum that has ever been sued by this particular branch of Webbank. I did see some usury litigation again other branches though. This one is also biz debt, obviously. The business was sold at a loss. 

[BackFromTheDebt]

A general rule of thumb is not to file pre-emptively unless there is a good reason to do so. 
 

I filed preemptive arbitration thrice.  
1.  Small claims case with Citi, I filed in JAMS right before they filed in small claims.  Oops.  They dropped the case like a hot potato. 
 

2.  My wife had some valid claims against an OC, but wasn’t capable of representing herself in court.  She filed in arbitration and listed me as an unpaid non-attorney representative.  That would be much tougher in court.  
 

3.  I had a Discover card where the Delaware SOL had expired but not the local SOL.  Since then, Discover changed their arbitration agreement to use the local SOL to avoid people like me.  
 

If you have a special situation like that, or if you are filing against a telecommunications company with an extremely good arbitration clause, file preemptively.  
 

If you are in a situation where a court case on your record could hurt your career (such as banking or national security clearance), file preemptively. 
 

If you don’t have a good reason to file preemptively, don’t.  

[Clydesmom]

7 hours ago, WhoCares1000 said:

As for Citibank, that depends on if the amounts due are low enough to be in Magistrates Court. If they are, then you might need to consider a preemptive strike with arbitration. If not, then wait for those to be filed too.

California does not have a Magistrate Court.  They do have small claims but they do not allow attorneys or creditors to sue there so the OP does not have a conflict with the small claims carve out.

[WhoCares1000]

15 hours ago, Clydesmom said:

California does not have a Magistrate Court.  They do have small claims but they do not allow attorneys or creditors to sue there so the OP does not have a conflict with the small claims carve out.

The person in this thread is from Georgia.

[fisthardcheese]

On 1/23/2021 at 2:39 PM, womanonfire said:

Thanks! I wonder if a suggestion of arbitration for the Synchrony cards would be a helpful negotiating tool. I want these folks to work with me and I don't want piss them off but I also want to them to know that I'm not going to make it easy for them in the least. 

Citi is low enough to be in Magistrate Court; they add up to around 7k total between three accounts. But one is a business card with $1500. 

On a side note and regarding another account I have that may have arb agreement (Webbank, Paypal Working Cap), I can't find anyone in any forum that has ever been sued by this particular branch of Webbank. I did see some usury litigation again other branches though. This one is also biz debt, obviously. The business was sold at a loss. 

If the Banks still hold your accounts, I would not take them to arbitration.  They will win the full amount and you will have effectively sued yourself for no reason.  If Citi has sold your debts to a debt buyer, then I would do the following:  Settle the business debts first above anything.  Get them cleared out the best you can.  Second, I would file a JAMS case preemptively for the disputed debt.  The JDB will simply ignore JAMS and the case will eventually be closed due to their non response, but we believe this can be used as a strong argument to circumvent the small claims exception if they later sue in small claims court.

Everything else I would wait until it gets to court to deal with unless you have the ability to settle with them prior and just want to get it put behind you.

[womanonfire]

On 1/23/2021 at 2:59 PM, BackFromTheDebt said:

A general rule of thumb is not to file pre-emptively unless there is a good reason to do so. 
 

I filed preemptive arbitration thrice.  
1.  Small claims case with Citi, I filed in JAMS right before they filed in small claims.  Oops.  They dropped the case like a hot potato. 
 

So you filed pre-emptively against Citi as the OC or after it was sold? 

 

 

[womanonfire]

On 1/30/2021 at 2:47 PM, fisthardcheese said:

Settle the business debts first above anything.  Get them cleared out the best you can.  Second, I would file a JAMS case preemptively for the disputed debt.  The JDB will simply ignore JAMS and the case will eventually be closed due to their non response, but we believe this can be used as a strong argument to circumvent the small claims exception if they later sue in small claims court.

Everything else I would wait until it gets to court to deal with unless you have the ability to settle with them prior and just want to get it put behind you.

Settle the biz debts first because I will be forced into expensive arbitration?  So I'm assuming that for those business debts that have the arb clauses, they will likely open arb cases instead of sue in regular court? That's a bummer because I've seen the Webbank debt challenged because of ursry interest. 

I would like to wait to settle some of these because I don't have the money to settle them all. My problem with waiting to be sued is so many creditors. I have 23 however 9 of those are Synchrony but if they sue as an OC, then I'm screwed I suppose. Only one of my accounts has been sold as far as I know. But annualcreditreport.com is offering weekly credit reports because of Covid I can keep a closer eye on this. 

Thanks for helping me with my strategy. It's pretty overwhelming trying to decide who to give priority to. On a positive note, I did settle JPMC amazon card yesterday for 36% of the balance but the balance was only $1300. 

[WhoCares1000]

Synchrony never holds on to their debts and sue, they always sell their debts to buyers. That is their business model. Citi and Webbank are hit and miss when it comes to the OC suing vs a buyer. Generally, the creditors who hold the debts are Discover, Amex, and Capital One (the last one does not even have an arb clause in their contracts).

As for JMPC settling, many years ago, they got burned by the CFPB for selling and suing on cases without any documentation. I don't know if their documentation practices improved but after that, they stopped selling and suing on their debts for the most part, instead offering reasonable deals to get someone to pay.

Finally, the reason you should clear out business debts first is that most arbitration forums limit how much consumers spend to get into arbitration. That limit is not available for businesses. That means that arbitration could cost you thousands to get into on business debts. That is why it is good to clear those out first.

[womanonfire]

Thanks @WhoCares1000.

Re: Synchrony, it appears they were sued by Walmart and it was transferred to Capital One. So the original agreement applies here correct? https://apnews.com/article/69fee8ced1004f9c94f67cc0a8679025

 

[BackFromTheDebt]

7 hours ago, womanonfire said:

 

I filed against Citi as the OC

[womanonfire]

Just now, BackFromTheDebt said:

I filed against Citi as the OC

So you pre-emptively filed? Would you do it again? Any other thoughts? 

[BackFromTheDebt]

59 minutes ago, womanonfire said:

So you pre-emptively filed? Would you do it again? Any other thoughts? 

I filed for two cases against Citi. One was already in court, and the judge had already ordered arbitration.

The other case was a small claims case.  Citi doesn't allow for arbitration when the case is already in small claims, so I filed in JAMS before they could file in court.  

In general, don't file a preemptive arbitration unless you have a very good reason to do so.  I did so thrice, and each time I had a very good reason to do so.  

[WhoCares1000]

4 hours ago, womanonfire said:

Thanks @WhoCares1000.

Re: Synchrony, it appears they were sued by Walmart and it was transferred to Capital One. So the original agreement applies here correct? https://apnews.com/article/69fee8ced1004f9c94f67cc0a8679025

 

The agreement that applies is whatever agreement was in force at the time you defaulted on the card. If that was after the sale to Capital One, that Capital One is the creditor and their agreement applies.

[womanonfire]

2 hours ago, WhoCares1000 said:

The agreement that applies is whatever agreement was in force at the time you defaulted on the card. If that was after the sale to Capital One, that Capital One is the creditor and their agreement applies.

Are you sure about this? It makes no sense that a sale could change the terms of the original agreement or contract. Also in the forums, this is one of the questions asked: 

When did you open the account (looking to establish what card agreement may be applicable)?

 

[WhoCares1000]

If there was a sale, what would have to happen is that the new creditor would have to send out a copy of the new contract to the debtors setting the terms of when the new contract becomes enforceable and how to opt out (usually it is determined by use of card), If you default before the new terms become enforceable and cannot use the card, then the old terms are in place. Remember that the terms of credit cards are changed as often as some people change underwear.

When you opened the account is to determine how long you have had the card (and where to start looking for an agreement). Date of First Default is the more important date when determining what agreement was in force.

[womanonfire]

On 2/3/2021 at 7:17 AM, WhoCares1000 said:

Synchrony never holds on to their debts and sue, they always sell their debts to buyers. That is their business model. 

I'm wondering if this tide is turning because they have hired a law firm to collect on one of their accounts, a firm that is known to bring suits but it seems they usually do on behalf JDBs. 

I'm not sure if I should DV or ignore them now but because this firm has two accounts of mine from different OCs, one that I wanted to settle right away because of the amt. and because the OC is B of A, it puts me in a pickle. 

I suppose I can call them weekly and ask them when they plan to sue me lol. 

 

[BackFromTheDebt]

Always DV.  Always. 
 

In the old days it was fairly common for a creditor to fail to validate, or for a collector to collect before validation.  These are much less common now, but occasionally happen. I once had a lawyer quit the firm right after I sent a DV.  It took over a year for them to clean up that mess.  
 

What a DV does is give the other side one more hurdle to jump, and it gives you a few more weeks, sometimes longer.  
 

As for calling them every week, don’t. Harassing that law firm could make a ton of trouble for you.  

[WhoCares1000]

Some say to DV just to make one more hurdle for them to hop over. Others recommend to not DV because it lets the creditor know that they have the right person and where to contact them. Most of this is done by computers today but you never know what can happen on the other side.

As for calling them, don't unless you are going to settle. Either they will sue you or not and that will be up to them. You can settle a debt anytime before the judge states that they are going to render a judgement so you will have plenty of time to settle, even if they file.

As for Sychrony changing how they do business, it could be possible. Especially as the arbitration stuff becomes more popular, the JDBs are either refusing to buy their debts or will purchase at a huge discount because of the clause. In this world, things change constantly so nothing is really surprising.