Collectors and Law Suits

[thelitman]

I have a friend who has a question..

He received a letter from a bill collector, stating he owed $265.00, they said he has ignored there previous attempts, and within the next 5 days they are going to do a Personal Asset investagation to determine what his assets are, then they are going to recomend the client consider legal proceedings... My question for him is this, how many debt collectors or whatever will actually try to take someone to court half way across the country to collect on $265.00? and when they run his personal asset thing they will find he has $70,000 in student loans, and $140,000 house... and only makes $30,000 a year. So they know he doesn't have money....

Now I know no one can give me a real answer, but has anyone got opinions, or first hand experience on if they think this debt collector is using a scare tactic or if they are serious?

[HHM]

This sounds like a scare tactic, and frankly, could be a violation of the Fair Debt Collection Practices Act. (threatening to sue with no real intent is a violation).

But that depends on what the debt is for? Often times, when a lawsuit is brought on a small claim, most states allow for the prevailing plaintiff to collect their attorney's fees and costs as part of the judgment.

[thelitman]

This sounds like a scare tactic, and frankly, could be a violation of the Fair Debt Collection Practices Act. (threatening to sue with no real intent is a violation).

But that depends on what the debt is for? Often times, when a lawsuit is brought on a small claim, most states allow for the prevailing plaintiff to collect their attorney's fees and costs as part of the judgment.

The debt is for some satalite direct tv thing he did. It was an afflite program he signed up for stating he would stay with them for 1 year at 29.00 a month or pay an early cancellation fee of $265.00, he cancelled early. Now even if they could collect the court cost and everything, would they be willing to waste their time, on collecting a debt for $265? Especially if when they chek his assets realize he has a ton of debt?

[ChainSmokin]

[thelitman]

Thats wht I told him, I didn't think $295 would be something they would come after.. The reason he is ignoring it for now at least is because like I stated he is about $200,000 in debt, his student loans and his house payment. He only makes around $40,000 a year. His bills come to $2,950 a month with groceries, he doesn't go out at all during the week, and he makes $3,000 a month. He has decent credit, but can't afford the extra $295 right now, so he was going to file bank ruptcy, I informed him the only thing that it would do is discharge the $265 because he wants to keep his house, and student loans are not discharageable. So it would be pointless, but he is afraid they will sue him for that $265 I told him in my opinion it was a threat, they were not going to do it, and just pay it back in a couple months when he gets the money. he contacted them today and they said they wanted it now, and would not set up a payment for a couple moths, my opinion they are not going to do anything like sue and told him to wait till he can afford it then pay it.... even if the collection does report it to his credit, it is still better than BK on credit....

So I honestly think they will not really sue, and it is a scare tactic.