Re: Arbitration

Posted by Ray (69.41.242.66) on January 01, 2004 at 16:31:02:

In Reply to: Re: Arbitration posted by Drew on January 01, 2004 at 12:55:45:

Drew, you’re promoting alarmist fears about being sued. You cite anecdotal evidence of Discover suing for $20. They did once. But I have my own anecdote of having had over $20k on two Discover cards, and they sold my accounts at the 6 month charge off point. MBNA also sold two accounts of mine at the same 6 month charge off point. Neither sued to get judments to make them worth more than the pennies on the dollar charge offs they sold them as. Judgments are Not worth more on the debt buyer market because they are Not readily transferable to new parties to be enforced in the various states which all have widely varying judgment enforcement procedures, while 80% of all judgments are never satisfied no matter how long they may be enforced. Judgments sell for the same pennies on the dollar that charge offs sell for. Nobody is paying thousands of dollars in legal fees to get a worthless paper judgment that may only be worth 5 cents on the dollar instead of the usual 3 or 4 cents on the dollar in the debt marketplace.

Lawsuits are strictly business. They are not done haphazardly nor routinely. Each individual case is analyzed for ability to pay and available assets before lenders spend the money on lawyers. Lawsuits cost huge amounts of money to a lender if a debtor makes even the slightest objections in court. Anyone who shows in court is an Unwilling or Unable payer, making collection from that person even less likely. Lawsuits destroy business relationships with people and forever make them angry consumers. As word spreads of Discover and Cap 1, fewer people will be willing to carry their cards. Lawsuits are exceedingly rare when compared to the millions of never paid charge offs each year, and are usually only reserved for people who have the ability to pay but are unwilling. We hear so often of them on this forum, since these are the people most in need of advice. They are the exception, not the norm. The credit card companies are doing just fine without your helping them along in collecting from people here by scaring everyone about lawsuits. I won’t downplay lawsuits, but this being a consumer forum, neither should we be overestimating their likelihood either.

P.S. Are you speaking from some experience here? You state matter of factly that “Discover will sue for $20 and they don’t care what assets you have.” Do you have some inner line to Discover’s legal department? Could you ask them why they didn’t sue me for $20 thousand dollars while they are apparently suing everyone else for anything over $20 bucks according to you. Not that I’m complaining mind you, but you present this information so matter of factly like you actually know what’s going on.

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