Mhopeful

Sued by Midland for multiple accounts

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I would look to the arbitration clauses in the cardmember agreements.  There might be a prohibition on combining arb cases.  I think the fact that there are 3 different OC accounts, with presumably different arb clauses, works in your favor.  

You could file the MTC Arb with the court, and, after it is granted, open 3 different arb cases (yes, that will also cost you more).  Let Midland be the one to argue that they should be combined.  You could then argue that this puts you at a disadvantage, as you have already paid arb fees for 3 cases.  All you can do is try.  It might work, or it might not.

Now, that assumes that all are filed with the same arb forum.  If one agreement has JAMS and the others AAA, you would have to file separate cases.  If a clause says AAA only, you can't use JAMS for that account.. 

 

 

 

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All the rest of the info, I think

1. Who is the named plaintiff in the suit? Midland Credit Management Inc

2. What is the name of the law firm handling the suit? Anthony Barone, Cleveland Ohio

3. How much are you being sued for? $8000

4. Who is the original creditor? Lowe's, Home Depot, Fifth Third

5. How do you know you are being sued? (You were served, right?)  served by certified mail

6. How were you served? (Mail, In person, Notice on door) mail

7. Was the service legal as required by your state? yes

8. What was your correspondence (if any) with the people suing you before you think you were being sued? None before

9. What state and county do you live in? Hamilton County, Ohio

10. When is the last time you paid on this account? Approx 2 years

11. What is the SOL on the debt? 6 Years

12. What is the status of your case? Suit served? Motions filed?  Just served today

13. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?) no

14. Did you request debt validation before the suit was filed? No

15. How long do you have to respond to the suit? 28 days

16. What evidence did they send with the summons? partial copies of statements, no affidavits or assignments

 

The strange thing is, they don't claim to be the owners of the debts. Literally, Count One states:

1. There is due to Plaintiff from the Defendant upon a(n) account the sum of $1457.52.

2. A copy of said Account is attached hereto as Exhibit "A".

3. Defendant defaulted on the Account by failing to pay as agreed, which resulted in the balance due to the Plaintiff.

4. Although due demand has been made, the Defendant has failed to liquidate the balance due and owing.

The Account referenced is Lowe's, the Exhibit is a page from a statement, that's it, no assignment, no affidavits?

Is this normal or is the lawyer just expecting us to not show and so put no work into it?

 

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I don't know the legal implications, but this seems highly irregular.  I might consult with a legal firm.  Doesn't sound very legal to me.

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11 minutes ago, admin said:

@MhopefulSuing you on multiple debts in same suit.  The ultimate in laziness. 

I thought it would be more fun to separate them, make them pay $15,000 in arbitration fees. is it normal to not have any other documentation that they own the debt?

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47 minutes ago, Mhopeful said:

I thought it would be more fun to separate them, make them pay $15,000 in arbitration fees. is it normal to not have any other documentation that they own the debt?

Just because the documentation wasn’t attached to the complaint doesn’t mean they don’t have it.

Also note that if you file 3 separate claims, you have to pay 3 initiation fees.

Midland might refuse to arbitrate and agree to dismiss the lawsuit.  However, for $74,000, they might agree to arbitrate.

Note that IF separate arbitration claims could be filed, while you would probably not be responsible or their arbitration fees, they really wouldn’t lose the money.   Their fees would probably be tax deductible because it’s an expense that could be considered part of doing business.  Businesses would not include arbitration in their agreements if it caused them to lose money.

As @adminpointed out, arbitration may not be the best strategy for $74,000 of debt.  I’d be speaking to a bk attorney.  

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1 hour ago, BV80 said:

Just because the documentation wasn’t attached to the complaint doesn’t mean they don’t have it.

Also note that if you file 3 separate claims, you have to pay 3 initiation fees.

Midland might refuse to arbitrate and agree to dismiss the lawsuit.  However, for $74,000, they might agree to arbitrate.

Note that IF separate arbitration claims could be filed, while you would probably not be responsible or their arbitration fees, they really wouldn’t lose the money.   Their fees would probably be tax deductible because it’s an expense that could be considered part of doing business.  Businesses would not include arbitration in their agreements if it caused them to lose money.

As @adminpointed out, arbitration may not be the best strategy for $74,000 of debt.  I’d be speaking to a bk attorney.  

I know, they probably have something more than what they filed.

My question is: in their lawsuit they do not claim to be the holder of the debts? Is that normal?

As I read it, they have no standing to sue as they are not any of the 3 creditors and do not claim to be the owners of said debts.

 

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3 hours ago, Mhopeful said:

I know, they probably have something more than what they filed.

My question is: in their lawsuit they do not claim to be the holder of the debts? Is that normal?

As I read it, they have no standing to sue as they are not any of the 3 creditors and do not claim to be the owners of said debts.

 


The allegation is that “there is due to Plaintiff”.  All that’s usually required in a complaint is enough to let the defendant know the claims against him.  If you believe there is not enough to establish standing, you would need to file a Motion to Dismiss in lieu of an answer.  However, the judge could allow the plaintiff to amend the complaint.  Or the judge could grant the motion, but the plaintiff could simply refile with a more detailed complaint.  

Also, while  the allegation doesn’t specifically state that Midland owns the account, it states that the money is owed to Midland.  Claiming that money is  owed to Midland could be enough to survive a motion to dismiss. 

Midland would have to prove ownership at some point, but it doesn’t have to be proven right when the complaint is filed.

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On 3/16/2021 at 4:23 PM, BV80 said:


The allegation is that “there is due to Plaintiff”.  All that’s usually required in a complaint is enough to let the defendant know the claims against him.  If you believe there is not enough to establish standing, you would need to file a Motion to Dismiss in lieu of an answer.  However, the judge could allow the plaintiff to amend the complaint.  Or the judge could grant the motion, but the plaintiff could simply refile with a more detailed complaint.  

Also, while  the allegation doesn’t specifically state that Midland owns the account, it states that the money is owed to Midland.  Claiming that money is  owed to Midland could be enough to survive a motion to dismiss. 

Midland would have to prove ownership at some point, but it doesn’t have to be proven right when the complaint is filed.

Thank you!

I think I will end up having to file 3 MTCs, one for each different alleged account. It sounds like the other 2 would not be constrained by filing just one MTC.

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20 hours ago, Mhopeful said:

Thank you!

I think I will end up having to file 3 MTCs, one for each different alleged account. It sounds like the other 2 would not be constrained by filing just one MTC.

I'm not sure you would need to file 3 MTCs.  (Check your local court rules and fee schedules; some courts have hefty filing fees for motions, and doing 3 motions could get expensive.)  I think one MTC would do, if carefully written.  After all, the plaintiff combined 3 accounts into one lawsuit.

But, with the actual arbitration, you would want to file 3 arb cases.  Maybe for the heck of it, if both JAMS and AAA are available, file one in AAA, the others in JAMS.  A crapshoot, yes, but I think it would prevent Midland from combining them all.

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On 3/16/2021 at 8:26 AM, BV80 said:

... they really wouldn’t lose the money.   Their fees would probably be tax deductible because it’s an expense that could be considered part of doing business.

Assuming that's true, why then do debt buyers generally have an aversion to arbitration?

Perhaps they have less of an aversion in recent times, with the broad adoption of virtual arbitration hearings, where even their custodian (or other witness) can appear over zoom.

But historically they haven't liked arbitration all that much.  But why if it doesn't cause them to lose any money?

 

On 3/16/2021 at 8:26 AM, BV80 said:

Businesses would not include arbitration in their agreements if it caused them to lose money.

It doesn't cause them to lose money overall, in the aggregate, yes.

But It is included primarily for one, and only one, reason. It allows the contractual exclusion of class action claims.

Those are the sort of claims that can really get expensive for business.  But perhaps even those costs could be deducted as a business expense, so why should they care?

Why should a business care about any cost at all if they can just write it all off? 

 

 

On 3/16/2021 at 8:26 AM, BV80 said:

arbitration may not be the best strategy for $74,000 of debt.  I’d be speaking to a bk attorney.  

Bk is always available after other strategies with potentially less damaging/long-lasting implications have failed.

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1 hour ago, kittycat said:

But historically they haven't liked arbitration all that much.  But why if it doesn't cause them to lose any money?

Debt buyers did not write the credit agreements and did not create the arbitration provisions.  They purchase debts because it’s easy.  They don’t provide any services to merchants or consumers.  They want the easy money.  

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4 hours ago, kittycat said:

But historically they haven't liked arbitration all that much.  But why if it doesn't cause them to lose any money?

The goal is the default judgment.  Statistics have long shown that 90% or more of defendants sued by creditors do not even bother to answer the suit let alone defend it.  If the JDB pays pennies on the dollar for a pool of defaulted accounts and they sue for half and get default judgments in 90% of those the collection could total more than the entire pooled debt.  Once they have a judgment they can garnish wages in all but 8 states and levy bank accounts in all states unless the funds are exempt.  Not only does the judgment entitle them to the full debt but the costs of suing and collecting and post judgment interest.  Arbitration is time consuming compared to a trial and expensive.  If they have to drop the effort on the extremely small percentage of consumers that get a MTC granted then the 90% they do get a default judgment on more than makes up for it.  It isn't an aversion it is merely a sound business decision in their minds.

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Arbitration is more expensive and time consuming  than court.  That is why the debt buyers don’t like it.  However,  many OCs like arbitration because it protects them from class action law suits.  They are willing to pay the extra money for the occasional arbitration to avoid the potentially devastating class actions. 
 

Debt buyers are getting the expense of the occasional arbitration without the benefits, but they pay so little for the debt it doesn’t matter. 
 

As @Clydesmom pointed out, it is a sound business decision for debt buyers to walk away from arbitration and pick up the low lying fruit.  Especially since the low lying fruit can be over 90% of the debts they purchased 

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6 minutes ago, BackFromTheDebt said:

Debt buyers are getting the expense of the occasional arbitration without the benefits, but they pay so little for the debt it doesn’t matter.

BV80 said, in this thread, which concerns only a debt buyer, that;

On 3/16/2021 at 8:26 AM, BV80 said:

... they really wouldn’t lose the money.   Their fees would probably be tax deductible because it’s an expense that could be considered part of doing business.

The implication of which is that there is no extra expense, at least not one for which they would ultimately "lose the money" (incur an expense).

It follows that even if arbitration is less easy in terms of effort, any extra effort that need be expended is just more tax deductions.

So, I was just asking BV80, if the costs of arbitration ultimately aren't real costs, what is the reason that debt buyers bail?  His answer seems to be that arbitration is less easy.  Apparently the costs of arbitration are not the leverage, the lack of ease is the leverage.

The OP apparently initially misstated the amount.  It is not 70k+, it is 7-8k.

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6 hours ago, kittycat said:

BV80 said, in this thread, which concerns only a debt buyer, that;

The implication of which is that there is no extra expense, at least not one for which they would ultimately "lose the money" (incur an expense).

It follows that even if arbitration is less easy in terms of effort, any extra effort that need be expended is just more tax deductions.

So, I was just asking BV80, if the costs of arbitration ultimately aren't real costs, what is the reason that debt buyers bail?  His answer seems to be that arbitration is less easy.  Apparently the costs of arbitration are not the leverage, the lack of ease is the leverage.

The OP apparently initially misstated the amount.  It is not 70k+, it is 7-8k.

Costs may be tax deductible, but effort is not.  Why go through arbitration when most cases end up either settled at the beginning or awarded as a default date?  They have preprinted summons and complaints, affidavits, and motions.  All they have to do is change the relevant details.  JDB attorneys will usually spend more and effort on lawsuits when consumers fight back, but it’s not that difficult to do when they have their prepared motions and case law.  In many cases, they could probably do it in their sleep.

Chances are that JDB attorneys have never been through arbitration and don’t understand it.  As pointed out by @Clydesmomand @BackFromTheDebt, it’s not necessary to waste time and effort on the procedure when the vast majority of their cases require no effort at all.  

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Even if costs and losses are tax deductible, they are real.  If you lose $25,000 chasing a $5000 debt, that is a net loss of $20,000.  If the tax deduction recovers, for example, 30% of that, that is still a net loss to the bottom line of $14,000.  Few businesses will want to eat that kind of loss.

Big banks that still have the arbitration provision do one of three things:

1. They sell the debt to a JDB, thereby never having to deal with the cost of arbitration.

2. They try to discourage people from arbitration by following the cases to the bitter end, spending many times the amount they recover.  This preserves arbitration to prevent class action suits, and also keeps people from using arbitration as a get-out-of-debt-free card.

3. They walk away or settle.  

 

These days fewer OCs have arbitration compared to the old days.  I was able to use the arbitration club against some OCs in the past which have dropped their arbitration clauses since then (such as Cap 1, as well as a few other banks which simply didn't want to bother with me when I told them I wanted arbitration.)  Only a few OCs, such as USAA, have added arbitration.  

 

In short, arbitration clauses can be valuable for OCs, but not for JDBs.  

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1 hour ago, BackFromTheDebt said:

In short, arbitration clauses can be valuable for OCs, but not for JDBs.  

That’s true, but the point is that OCs and JDBs don’t lose as much as some think they lose.  In addition, we have to remember that, unlike OCs, JDBs never lose the full value of defaulted accounts because they did not pay full value for the accounts.  If they paid $1000 for a $10,000 debt, they’re already ahead by $9000.   Between default judgments and high profit, they don’t need to arbitrate.

 

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@Mhopeful - Have you spoken to an FDCPA attorney about Midland's collection notices sent to you yet?  If not, I would suggest doing so - Midland is well known for FDCPA violations and the right lawyer wouldn't even charge you to represent you in the case, if the FDCPA violations are bad enough.  But you need to specifically find an FDCPA attorney...in my experience, other attorney's don't seem to understand the FDCPA at all and have told me these violations are a waste of time, when they could really save your day!  

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On 3/20/2021 at 1:36 PM, Helplessly Lost said:

@Mhopeful - Have you spoken to an FDCPA attorney about Midland's collection notices sent to you yet?  If not, I would suggest doing so - Midland is well known for FDCPA violations and the right lawyer wouldn't even charge you to represent you in the case, if the FDCPA violations are bad enough.  But you need to specifically find an FDCPA attorney...in my experience, other attorney's don't seem to understand the FDCPA at all and have told me these violations are a waste of time, when they could really save your day!  

I have not, I'll look into it, thanks!

 

On another note, I just got served again for the exact same debts by the exact same law firm, but 2 different case numbers, this is plain weird. The first one hasn't been dismissed nor does it have a motion to dismiss filed. Assuming I don't show to either (not happening, I'm going with arbitration) can they get judgements for both? Is that a violation of FDCPA?

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