They Will Sue You For $.08 !

Yes, 8 Cents !

 Incredible but true !  These days, creditors will sue in court for very small sums of money that only several years ago would be very quickly written off  as obviously not worthy of pursuing in the Courts. However, this is no longer the case. In fact, In New York State, in the upstate County of Erie, a consumer credit lawsuit was recently filed (January, 2018) against a resident of a local town to collect the sum of $.08. Yes, that's right ! Eight cents! Here is the case: CACH, LLC vs. Fallon, Supreme Court of the State of New York, Index No: 800670/2018, Filed on 01/15/18. (See it here.)

Clearly,  a lawsuit for 8 cents is not the norm, However, the very fact that this lawsuit was filed with the NYS court system should give you an idea of just how aggressive and relentless the creditors and their collection attorneys have now become. And, this is why it is highly recommended that you contact The Credit Card Defense Center immediately if and when you are served with a summons to collect a debt. Your financial good health could be at risk and is certainly in jeopardy.

What Happens When You Default 

on Your Credit Card or Loan  Payments ?

When you default on creditor debt, whether business or consumer credit, there is a very specific process that then takes place when the attempt begins to make you pay up! In other words, the debt collector is coming! But debt settlement is always possible, as you will see.

Original Creditors Are Different !

The “original creditor” is not a debt collector. Instead, it is the company or bank that originally gave you the credit card, loan or line of credit with respect to which you have now defaulted. American Express, Discover, Capital One Bank and Bank of America are not debt collectors They are examples of “original creditors”.

 Retailers who extend credit to consumers or businesses by issuing their own department store credit card are also “original creditors”. Examples include major retailers like Macy's, Walmart, Home Depot and Target, all of whom issue their own credit cards to consumers for use exclusively in their stores. These entities are never considered debt collectors, although they will try and collector the debt,

 No matter who the “original creditor” is, if you fail to pay, the original creditor will always initiate and continue their own collection activities for about 60 to 90 days, before they call in a debt collector, including the usual dunning letters and emails as well as repeated collection phone calls.

 Again, this initial collection effort by the original creditor will only be for a limited time because original creditors are often not equipped to conduct extended collections on long overdue debts. (American Express is an exception.) And many original creditors want to avoid the negative customer relations that collecting past due debt will often engender. For these reasons, after 60 to 90 days, when no debt settlement has been reached, original creditors often send the claim to an outside collection agency, or, in other words, a debt collector.

Collection Agencies

Outside collection agencies – debt collectors - are hired by original creditor to collect long overdue debt. And original creditors pay the collection agency a percentage of the money it recovers or a flat fee. The collection agency now represents a client - “client” - because the original creditor still owns your loan. And the original creditor will often have a contract with the collection agency for a set period of time before the debt is reassigned to another more effective debt collector for a fresh, and probably more determined attempt, at getting you to pay. Debt settlement at this point is still possible because this new debt collector will have another set period of time to collect or settle your debt. However, if they are unsuccessful as well, the debt may be reassigned to yet a third collection agency, and so on. And this is why you, the customer, will typically receive multiple send increasingly aggressive communications from defend outside collection agencies as the debt ages.

 Now, you should also know that a debt collector or collection agency cannot file a lawsuit in its own name. If a lawsuit must be filed, the collection agency will return the claim back to the original creditor to file the lawsuit. This is why you may have multiple collection agencies contacting you but then, when you are finally sued, the original creditor is on the lawsuit.

Beware of the Third-Party Debt Buyers

Often, after a debt is default for an extended period of time, the original creditor may sell your debt to a third-party debt buyer. American Express is the exception because it is the only original creditor which does not sell its debt claims to third party debt buyers. If you owe Amex money, it is Amex itself will eventually sue you if they deem it necessary to elicit payment.

 Note that these third-party debt buyers will most often purchase your debt for pennies on the dollar from the original creditor and will typically buy thousands of delinquent accounts at once. Now, once it makes such a purchase of overdue debt, and unlike the “collection agencies”, which try to collect as an agent for the original creditor, never actually owning the debt itself, the third-party debt buyer now own the debt. However, the good news is that because the debt buyer has typically purchased your debt as part of a package of thousands of debt claims, and most often for pennies on the dollar, third party debt buyers can usually offer the most favorable settlements terms and still turn a profit for themselves.

 Third party debt buyers can and most often do in file do file lawsuits in their own names to collect these debts, although many such debt buyers have problems in court proving ownership of the debt, or providing other evidence needed to obtain a judgment against you.

 When The Lawyers Get Involved

Collection lawyers can and will be retained if no other attempt to get you to pay what the creditor thinks you owe within a specific period time is successful. Exactly when the collection lawyers will get involved is dictated by the creditor’s individual internal debt collection protocol. And either the original creditor can retain the attorney, as in the ace of American Express debt, or when a third-party debt buyer has pushed the debt, that entity will itself retain a collection attorney. Usually, the retention of a lawyer to collect debt is the most expensive way for a creditor to proceed and, therefore, the collection lawyers are not retained until the creditor has no other option because all previous attempts at collection have failed to elicit payment from you. However, once the lawyers are retained, the inevitability of a law suit is a foregone conclusion and you will soon be hearing from the lawyers by letter and possibly via phone calls and, eventually, by a lawsuit.

 Now, receiving a lawyer letter or phone communication does not necessarily mean that you are going to be sued. In fact, many collection law firms are in fact glorified collection agencies in disguise, with large collection departments. And, therefore, the economics of the collection process dictate that the collection lawyers make a final attempt to collect just prior to filing suit against you. And you can in turn often settle the claim at this stage and avoid actually having a lawsuit filed and made public on the Court’s website. But, make no mistake about it. If the lawyer’s pre-suit collection efforts fail, collection lawyers will in fact sue you in Court and will have every intention of using the law to collect the outstanding debt. Remember that they are out to satisfy their clients by getting your money.  And they are obligated, ethically and financially, to show their client that they will proceed against you with all deliberate speed if they cannot get you to pay up voluntarily within a relatively short period of time after the case has been referred to them for action.

When The Lawsuits Start

Now, once you are sued in Court all is not lost. So, here is no need to panic at this stage. In fact, there are usually defenses you can raise and negotiations that you can engage in to resolve the claim before you suffer a court judgment. Sometimes, for example, a lawsuit is not filed absent you within the statute of limitations -- the time limit set by law - varying on a state –by- state basis- within which a creditor or third party debt buyer must bring a lawsuit to collect on a defaulted debt. (See our  Statute of Limitations page to check the statute  of limit for debt collection lawsuits in your state.

 So, if a lawsuit is filed, it is not too late to contact the attorney and try to negotiate a settlement, although by this point, any settlement amount may have attorneys' fees added onto it. And you should be very aware of court deadlines even if you are trying to negotiate a settlement because, often, while toy think too are negotiating in good faith with the non-attorney representatives of the collection law firm, the collection lawyers themselves at that very same firm are nevertheless continuing their case in court absent you, even while you are not there to defend yourself. because you think you are engaging in settlement negotiations.

                                   Getting the Best Debt Settlement

As a general rule, however, the longer you wait, or more specifically, the longer and harder you fight back with the help of attorneys associated with the Credit Card Defense Center, the more favorable settlement offers you are likely to receive. For example, the third party debt buyer who purchases your debt two years after a default will offer a better deal than will the original creditor when you are only 60 days in default.

 There can be a significant drawback to waiting, however, which is damage to your credit. As time goes by, there will likely be multiple negative markings on your credit report due to the extended default of the loan. And you may not want to deal with years of phone calls from debt collectors, letters and collection activities by the different debt collectors as your debt gets transferred and sold. (Learn more about the  pros and cons of credit card debt settlement.)

Your Best Bet in 2018 ?


Hire Experienced Credit Card Defense Attorneys Today !!

Experienced CREDIT CARD DEFENSE LAWYERS know what questions to ask and what discovery documents to  request to possibly get your case dismissed and give you the very best opportunity to get the best outcome by objecting to the improper use of hearsay evidence against you, determining whether the debt is time barred against collection by a statute of limitations and whether or not you were afforded due process in the ways you were served with the summons and complaint in the first place.

Free Consultation:
Attorneys associated with 

The Credit Card Defense Center
 are now available for 

Free Consultation regarding your situation. 

Contact us now for details.

We are Licensed NYS Attorneys 
Concentrating in defending business and individuals 
who are being sued by creditors in New York State 

244 Fifth Ave.
NYC 10001


Contact the Credit Card Defense Center Now


And Learn About Your Rights As A Credit Consumer !

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