Sued in MN - elected Arbitration - Next Steps and a few concerns

[justlooking]

Sued in MN and to date, the case has not been filed in Court. JDB (LVNV) hired attorney who sent a Summons/Complaint, sent back an Answer, they sent back an intent to file MSJ, I sent the MTC Arbitiration. Received letter about 2 weeks later stating they would put a "stay" on the case until I filed with AAA or JAMS. But - this is MN. There is nothing yet filed with the Court ( and I verified) so I have a few concerns. One is that I thought they had to file the case with the Court before I could or should file with the arbitarion company. 

Does the plaintiff have to file in court in order to lallow the MTC to do its work? 

What else should I do? Should I call and offer a settlement valid until they file in court? Or should I say, I'm not entering into arbitration until you file your lawsuit with the Court? 

I am ok to file the arbitration but I feel they are perhaps trying to allow the case to toll or something, doing all this in arbitration without filing the suit and then the MTC etc. I may not be explaining things properly, so apologies. I just don't have a good feeling about this.

The other concern is that the debt is not a few thousand dollars. It's over $15K. What do I need to consdier with strategy so that arbitration has a better chance to work for my situation? 

Please help. I have read the arbiration strategy, makes sense, but need to learn more on the tactical steps now that I'm in it. 

Thank you. 

[BackFromTheDebt]

Minnesota has a very strange civil court system.  All sorts of things can go on before the case is even filed with the court. 
 

The letter they sent gives you some small amount of protection. I can’t say exactly how much.  From what little I can gleam from your post, it appears they won’t file anything for a couple of weeks so you have a chance to file in arbitration. 
 

Your best bet is to file in JAMS if permitted, and to do so ASAP.  After you have filed you can discuss settlement or not.  If you don’t file, you have a MSJ staring you in the face.  

[Clydesmom]

Minnesota is what is known as a "pocket docket" state.  @WhoCares1000is our resident expert on the Minnesota courts.  I am sure he can help answer you questions accurately.

[WhoCares1000]

Minnesota does not require them to file a case in court to start the case. All that is needed to start a case is to serve the other party. Cases are filed in court later when there is an issue where a judge is needed OR no answer is given and the debtor wants to get their default judgement. Do not expect them to file in court right now. The summons and complaint should have told you that. This is what is called pocket docket because the plaintiff puts the complaint "in their pocket" rather than files it with the court and is one of the few states that allow this (and the most well known).

They agreed with you when you sent the paperwork because they did not want to pay the $300+ filing fee to get started in court. You should be fine with that because you would have to pay the $300+ filing fee to file your answer too, plus $75 to get your motion heard. Since they agreed with private arbitration, you do not need the MTC or to go to court. You need to get the arbitration started however. If you don't, they will get tired of waiting and will eventually file in court and state that you have no intentions of following through. This all sounds strange but this is how things work in Minnesota.

You might have a problem with them following you into arbitration with a $15k debt. You might not eat into the profit enough to not make it worth their while. I would suggest getting together a decent settlement ASAP to make that enticing to continuing to pay for arbitration. What that amount is, I don't know but I would expect it to be at least $5k and possibly more.

[justlooking]

Thank you @WhoCares1000 @Clydesmom @BackFromTheDebt

I appreciate this advice and will go ahead and file. I have heard that AAA is better because you (the debtor) does not have to pay as many fees (or something like that). Do you have an opinion on choice of arbitrator? 

Also, strategy. I made notes on the points in time for when to offer a settlement using @fisthardcheesemethod. What else could I be looking for? I know the debt is higher than ideal to bank on this approach, but are there any strategies that could help me? 

I don't think I could come up with a 15K payment, not any time soon. Could I end up in a judgment anyway, if I don't fare well in arbitration? How long is the arbitration process? What should I be looking for when they provide "discovery" during the arbitration process? Is there somewhere on this site that outlines what to request during a discovery process and other recommendations? (I am not sure it is called discovery in arbitration, but I presume there is some level of something like that - the JDB sent nothing.)

I welcome any other advice on this. I don't mind paying, it's that unfortunately I have a lot I'm paying back right now.

thank you.

[BackFromTheDebt]

I never used AAA. Always JAMS. 
 

The reason: although JAMS is about $50 more expensive for the consumer, it is even more a financial burden for the creditor.  
 

The idea being if the creditors prefer AAA go with JAMS.  They might be a little more likely to settle.  

[shadow99]

I've used both, but never got to active arbitration.

JAMS was nice.  I submitted everything through email, paid online by CC once they sent me a bill, and was quickly given a case manager who answered any questions I had and kept emailing the bill to the JDB's attorney.  We finally settled for a $0 dismissal.

AAA was the only option per the agreement on another case. I submitted everything online and paid at the same time - very quick and easy.  However, from there, it went into case review for weeks.  Even after I settled with the JDB, it took about 3 more weeks for someone to get to me so they could cancel everything.  Because there was such a delay and they had not reviewed the case yet, they refunded me the $200.

In looking at AAA, the arbitrator fees seem to be set at a certain amount while the JAMS arbitrator fees are open ended based on what the individual arbitrator wants to charge.  When I have the choice, I will use JAMS in the future.

I've read cases here where it took about 10 months start to finish to go through arbitration. I'm sure some take longer and some take less time.

 

[justlooking]

Thank you @shadow99and @BackFromTheDebt.

I suppose I was choosing AAA because someone on the forulm suggested that AAA does not require the debtor to pay any of the creditor's fees or something. <Checked notes and the site.... and found it. It was a post from @Harry Seaward ending "... AAA rules expressly prohibit the arbitrator from reallocating the JDBs fees back to you making it that much more unattractive for the JDB to follow you into arbitration. " From <https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/>

If this is something I don't need to worry about, maybe I should choose JAMS. I do want to use the least favorable party to the creditor, I suppose for obvious reasons. 

[shadow99]

1 hour ago, justlooking said:

Thank you @shadow99and @BackFromTheDebt.

I suppose I was choosing AAA because someone on the forulm suggested that AAA does not require the debtor to pay any of the creditor's fees or something. <Checked notes and the site.... and found it. It was a post from @Harry Seaward ending "... AAA rules expressly prohibit the arbitrator from reallocating the JDBs fees back to you making it that much more unattractive for the JDB to follow you into arbitration. " From <https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/>

If this is something I don't need to worry about, maybe I should choose JAMS. I do want to use the least favorable party to the creditor, I suppose for obvious reasons. 

That's a good thing to consider too.  I've only read of 1 or 2 people who were ordered to pay the JDB's legal fees in arbitration. I think one person filed bankruptcy.  The other may have appealed and had the decision reversed. But, it's expensive to appeal.

Arbitration is often used to negotiate a better settlement offer so that's another thing to consider.  I've used it 3 times. Twice on debts around $2-3K that ended up in $0 payment for a mutual dismissal.  The third was for a settlement of $500 for a debt of over $6K. I have one in the works now that involves over $15K - I'm thinking I'll have to pay between 30 & 50% on this one, but we'll see.  I'm trying to get the 50% saved up before I file with JAMS.

[BackFromTheDebt]

Negotiating a better settlement is right. 
 

I can’t tell you the amounts of the settlements, but the aggregate amount of money was $2000.  That is, that is what was paid to me.  I always had good claims and counterclaims.  

[justlooking]

@BackFromThank you @shadow99and @BackFromTheDebt.

I suppose I was choosing AAA because someone on the forulm suggested that AAA does not require the debtor to pay any of the creditor's fees or something. <Checked notes and the site.... and found it. It was a post from @Harry Seaward ending "... AAA rules expressly prohibit the arbitrator from reallocating the JDBs fees back to you making it that much more unattractive for the JDB to follow you into arbitration. " From <https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/>

If this is something I don't need to worry about, maybe I should choose JAMS. I do want to use the least favorable party to the creditor, I suppose for obvious reasons. 

[justlooking]

@BackFromTheDebt Can you tell me what kinds of "counterclaims" I would look for? This is with a debt buyer not the OC and has evidently had it for a while but not reached out until now. I have been served no paperwork/discovery. I assume that will still be done with arbitration. Also, what kinds of information would I look for in the discovery?Thank you.

[BackFromTheDebt]

Counterclaims?

 

It depends.  
 

These days debt collectors are a LOT more careful.  This forum and the late “other forum “ are part of the reason. Consumers found out that the FDCPA and other laws could make life difficult for debt collectors.  Add to that aggressive AGs in MN and NY. Andrew Cuomo may have been a total sexist pig but he put a lot of the worst Buffalo debt collectors out of business  

 

The days when debt collectors could just bully their way through a payment and never face repercussions are gone.  So they are more careful. 
 

In the old days it was almost guaranteed that a debt collector would break some law.  They would harass the consumer.  They would robo- call a cell phone illegally.  They would make false claims.  They would threaten to do stuff that was either illegal or they had no intention of doing.  They would call at work when they were not permitted to.  Law firms would threaten to sue in states where they were not licensed to practice.  I even had one case where a well regarded OC lied about the debt. 

I had collectors do all of these and more  

See if the JDB has done any of these things. 

[justlooking]

Fast forward....arbitration case filed and served with arbitration company (JAMES/AAA). A few questions at this point please:

1. Is there a sample or samples of what you file with the arbitration company? I think this is called "initiation"? I suppose it would like a complaint but are there samples, general guidelines, etc., as they have worked with people from this forum?

2. the JDB sent a letter, arrived last week, offering a settlement. I beliieve it was around 25/5 of their claim. I realize no one can really guide me on whether to take a settlement but in my siutation, it's still a bit high. The JDB has not paid their fees yet so it seems a good time to review/offer a settlement. I was going to reply back that I would settle for $0 (I have already paid the arbitration feee) and with a dismiss with prejudice. I have had no discovery, no arbitration process yet so am still figuring out the entire procdess. 

3. The complaint, as mentioned in #1 above. Are there posts on what to look for in terms of violations or inequities with the JDB/complaint? I have found a few citations on the site but most of what Im finding is getting the MTC completed - not the arbitration process. 

Thank you.

[WhoCares1000]

2 hours ago, justlooking said:

Fast forward....arbitration case filed and served with arbitration company (JAMES/AAA). A few questions at this point please:

1. Is there a sample or samples of what you file with the arbitration company? I think this is called "initiation"? I suppose it would like a complaint but are there samples, general guidelines, etc., as they have worked with people from this forum?

2. the JDB sent a letter, arrived last week, offering a settlement. I beliieve it was around 25/5 of their claim. I realize no one can really guide me on whether to take a settlement but in my siutation, it's still a bit high. The JDB has not paid their fees yet so it seems a good time to review/offer a settlement. I was going to reply back that I would settle for $0 (I have already paid the arbitration feee) and with a dismiss with prejudice. I have had no discovery, no arbitration process yet so am still figuring out the entire procdess. 

3. The complaint, as mentioned in #1 above. Are there posts on what to look for in terms of violations or inequities with the JDB/complaint? I have found a few citations on the site but most of what Im finding is getting the MTC completed - not the arbitration process. 

Thank you.

I am not understanding the 25/5 of their claim. Does this mean their claim was $25K and they will settle for $5K? If that is the case, you might want to consider the settlement because $25K is a large figure and enough for them to consider arbitration. The $0 usually recommended is for claims that are in the 4 digit area. With a solid 5 digit claim, you might not get a $0 settlement and remember, a bad case in court is a bad case in arbitration.

[justlooking]

@WhoCares1000Thanks for your response! I am losing my vision a bit and that was a type-o. The offer was 25% of the balance requested; while not a balance of $25K. it was 5 figures (but less than $20K). The point is, I am being sued by multiple parties and getting settlement amounts for these is proving challenging. 

Should I counteroffer at 10% or something in that range? My goal is to come to settlement but I have too much to settle to offer any one party a significant amount. Based onmy health, I have to be mindful of too much debt/repayments because of known probabilily of medical expenses. 

At what point do I take the settlement? I am so afraid of agreeing to a payment plan or something and then getting in a health crisis again. I want to agree an amount, and pay it in one go if I can. 

Thank you.

[shadow99]

8 minutes ago, justlooking said:

The offer was 25% of the balance requested

If they started the negotiations at 25%, it's very possible they would go lower.

I negotiated a $6K debt down to $500 because they didn't want to go to arbitration.

They started with a 50% offer.  I countered with the $250 I would have to pay JAMS. They came down $500-$1000 each time - I only went up $50-100 each time. I thought I was going to be stuck paying $1000, but after a day or so of nothing, they came back and accepted my last counter offer of $500.

I have one coming up that's similar to yours - it's 5 figures, under $20K, but not by much.  I'd be happy to pay 25% on it, but if they started the negotiations at that point, I'd try to counter with a lower offer.

[justlooking]

@shadow99thank you! Your response gave me hope - I am trying to get these old debts paid down but it is a challenge. I don't want to miss a good opportunity but I also know I don't have deep pockets. I really appreciate your perspective.