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Being sued by kohn law firm/midland


Afrankeee
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Hey y’all, 

im new to this stuff but I’m being sued by Kohn law firm/midland in Wisconsin i received summons paper but it never gave me an option to file and answer. The debt is only $600 and I’ve been trying to set up a payment plan with them for $100 a month and they absolutely refuse and keep telling me they  would get more garnishing me. I’m tight on money and can’t afford a lawyer. I don’t know what to do any help would be appreciated 

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The filing of an answer is usually through a court form that you can get from the Wisconsin Courts website or through pleading paper. I would look for the form first.

It would help us to know who the original creditor is and if there is an arbitration clause in the contract. If there is an arbitration clause, you can force them into a very costly battle to collect $600 (or even get them to accept less than full balance or nothing at all to get this to stop).

Finally, I think Wisconsin has a process in the courts where you can force the creditor to accept payments which are reasonable (and $100/mo on a $600 debt is reasonable). It sounds like they are more interested in the interest that can be earned on the judgement (which is way more than bank interest) and will garnish you at a later date when they can get much more money.

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Here are the Small Claims forms and instructions for Wisconsin. The form you need to answer is SC-5200V

https://www.wicourts.gov/forms1/circuit/ccform.jsp?FormName=&FormNumber=&beg_date=&end_date=&StatuteCite=&Category=38

I would also read what the process is in small claims court. Those are in the above link too.

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1 hour ago, WhoCares1000 said:

The filing of an answer is usually through a court form that you can get from the Wisconsin Courts website or through pleading paper. I would look for the form first.

It would help us to know who the original creditor is and if there is an arbitration clause in the contract. If there is an arbitration clause, you can force them into a very costly battle to collect $600 (or even get them to accept less than full balance or nothing at all to get this to stop).

Finally, I think Wisconsin has a process in the courts where you can force the creditor to accept payments which are reasonable (and $100/mo on a $600 debt is reasonable). It sounds like they are more interested in the interest that can be earned on the judgement (which is way more than bank interest) and will garnish you at a later date when they can get much more money.

That would be a Chapter 128 voluntary amortization of debts.  The costs may or may not be lower.  There is an administrative fee but not interest, and the debt is paid over 2 years. 
 

You can combine debts. 
 

In the meantime, who is the original creditor?

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Midland has a policy under which they drop cases if you are in dire financial straights due to medical issues, but if you are working, this doesn't apply.  

 

What county are you in?  

The reason I ask -- Credit One has an arbitration agreement, BUT there is a small claims exemption.  

Wisconsin has a law that you can automatically appeal a case from small claims to Circuit Court.  Once you are in Circuit Court you can file a Motion To Compel (MTC) arbitration, because you are no longer in small claims court.  I do know of a case on this forum in which that worked in Dane County, but then Dane County has the most consumer-friendly judges in the state.  

To be honest, it is extremely difficult to beat Kohn.  They are the most competent debt collection firm in Wisconsin.  

There are ways to fight the case.  You may not win, but you can at least delay things.  You say you don't have money, but these things would take time rather than money.  

What you might do -- if you can really afford $100 a month, start saving up $100 a month while you fight this.  

In the meantime:

1. Answer the case in Small Claims.  Deny everything.  You also have a few defenses, which probably won't work, but you never know:

1.a.  You are supposed to be sent a Notice of Right to Cure Default under Wisconsin state law.  The problem is, the courts have pretty much decided to ignore this.  I think some courts decided that this doesn't really apply once the file is charged off.

1.b.  Under Wisconsin state law, the sale of the account to a JDB isn't valid unless the original creditor mails you a notice that they are selling the account.  Again, the courts pretty much ignore this.  

1.c.  Under Wisconsin laws, you can demand a full accounting down to zero balance.  The problem is, courts have generally ruled that this does not apply to JDBs.  

2.  You will almost certainly lose in Small Claims.  No big deal.  

3. You can automatically appeal the case to Circuit Court.  From there it is tried de novo.  Which means, the original ruling is thrown out, and you start all over again.

4. At this point, you file your answers with all of the defenses above, but also add in an affirmative defense of improper venue due to the arbitration agreement.  File an MTC, along with the entire Credit One card agreement.  If the judge is a good one, you will get the case put into arbitration.  Midland rarely follows into arbitration.  You may have to pay the AAA fees (for which you have been saving money!), but that would be all.  

5. Some judges won't allow you into arbitration.  Judges pretty much do whatever they feel like doing, no matter what the law says.  Or, they may rule that since the case started in small claims, the exemption applies.  In that situation you lose.  

6. By this time, you may or may not have saved up enough money to pay off the entire debt.  At that point make an offer to settle for what you have saved up already.  If they reject that, offer what you have plus $100 a month until paid off.  If they reject that ...

7. You can always file Chapter 128.  There is a filing fee and some administrative costs, but this pays the debt off with no interest over 2 years.  Because of the filing fees and administrative costs, this may or may not be worth it.  But it is an alternative.  We are talking about maybe $25 - $30 a month instead of having your paycheck garnished.  If you have other debts, this is a good way to consolidate your debts and pay them off in two years without interest.  

 

 

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26 minutes ago, Afrankeee said:

Update I’ve been researching and it looks like they have broke 2 UDAPP violations... they threatened garn without a judgement and even tasked about court fees that I owe without judgement. Would this help in court? 

The only answer is maybe.  The reality is if they get a judgment yes you can be garnished and if you read the card agreement if they sue and you win you are expected to also pay the court fees.  My guess is the judge will simply shrug and say "if I give them a judgment they can garnish you and I will award them the fees."

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3 hours ago, Afrankeee said:

Update I’ve been researching and it looks like they have broke 2 UDAPP violations... they threatened garn without a judgement and even tasked about court fees that I owe without judgement. Would this help in court? 

Probably not but it depends on the wording. They might not have a judgement yet but if they were going for one when they called (or you called them), then they can say that they will garnish once the judgement is entered and that will probably fly.

As for the court fees, if the original contract says that they can get court fees, they can ask for those if they paid those out.

What I would do is find out how much the fee is to appeal to regular court + $250 for the arbitration fee and on the day of trial, offer that in settlement of the debt stating that if they don't take it here and now, you will make this the most expensive $600 to collect. The contract may allow for court fees (you need to read it to see if it does) but most of the time, arbitration fees are not charged to the loser and those get to be way higher than court fees.

And sometimes you will get a better deal when you are face to face with the attorney at the courthouse rather than on the phone. They will also give it to you in writing.

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