Lawsuits - How Likely?

[treehugger1]

Given the concern over lawsuits and legal actions against debtors, I thought I share my opinions.

1) Many states disallow small claims proceedings to have legal counsel representatives. Such is the case in my state and others. So, the cost of a suit begins to grow if the plaintiff has to file in district court or even some small federal court.

2) Many states require the suit to be filed in the same county as the debtor resides. This means that either the OC or CA must find an attorney who can sue within some specified "mileage" of the debtor's legal address. I had American General sue me in a county next to me (I encouraged them) and because I was within some specified "miles" of the court this was allowed. Other than that, the plaintiff's legal counsel could sue me upstate, but then they would eventually need to come directly to my county to force the judgment and issue a writ of garnishment. This does cost a great deal of money when potentially going after a no-asset debtor.

3) The "lawsuit" threat. I once received a DV and the "one more phone call of future intent," (okay via FDCPA and state laws.) I think BB offered this up in a thread somewhere; but here is my recollection of that call:

CA: We are calling to inform you that we will initiate legal action related to this unresolved debt.

ME: Are you an attorney or paralegal?

CA: We are just informing you that we intend to seek legal action.

ME: Are you an attorney? What is your name, please?

CA: That has nothing to do with this call.

ME: Could you please connect me with the attorney who is representing this alleged debt? I need to speak with the attorney who "intends to sue me for this alleged debt."

CA: "Click."

Never heard from them again after almost 16 months. I have no clue what the status of this alleged debt is at this time.

4) Arbitration: My state has it's own arbitrtion clauses in the state statutes. One of these is that any answer supplied to a plaintiff's complaint ($50K or less!), appears to move into arbitration and this adds several weeks (months?) to any result. All of this costs money from both the plaintiff and defendant and takes months to resolve. Given the big financial institutions attempt to immediately grow cash (get out of their bailouts,) I would think it is not in the interest of these folks to authorize suits or arbitration.

Just my thoughts and theories. This isn't to say that suits aren't out there. They are. But each situation is unique to what the debtor might have in terms of assets. Even a suit and judgment won't necessarily lead to immedaite action against assets. With unemployment as high as it is, and other easier prey available, and the chance of the debtor eventually filing for BK creates an outcome for OC, CA, or JDB that cannot be known with certainty.

[albacore44]

Some of my observations while reviewing the riverside ca docket. cap 1 seems very active on small debts, but uses several Law firms from San Diego county some 120 miles away. My thinking is they assume the defendant won't show so they get immediate default judgement.

citi is farming out their losses to a well known JDB in san francisco, Hunt and Henrequis. I dont know if this JDB is using a local office to represent them. again mabee not, they could be depending on default judgement.

Chase is using a firm in Los angeles about 100 miles away. this firm appears to be part of Chase, so it leads me to believe chase is keeping their collections in house.

these were all filed in superior court. did not see any small claimes

[treehugger1]

Do the court documents list the size of debt? If the CA legal arms are using the superior courts for small amounts, then I guess they are assuming the defendant will not file an answer or show up. I'm not familiar with the Calif. laws, but I'll assume there is a cost to a defendant filing an answer to a plaintiff's complaint. Is this correct?

[albacore44]

Do the court documents list the size of debt? If the CA legal arms are using the superior courts for small amounts, then I guess they are assuming the defendant will not file an answer or show up. I'm not familiar with the Calif. laws, but I'll assume there is a cost to a defendant filing an answer to a plaintiff's complaint. Is this correct?

yes, there is a cost, about $200 i believe, but I saw several instances of defandants requesting hardship waivers of fees from the judge and fees being waived. The debts I saw from Cap 1 all seemed to be in the $1K-$2K range.

[coolgurka]

Amount/limit for small claims court

Does anyone know the limit or maximum amount one can sue in a small claims court,in CA?

[albacore44]

Does anyone know the limit or maximum amount one can sue in a small claims court,in CA?

I believe it's $10K

[walkthaplank]

I believe it's $10K

CA small claims limits

California Small Claims Court
# Statutes: Annotated California Codes, Code of Civil Procedure, Part 1, Title 1, Ch. 5.5, Sections 116.110-950.
# Dollar limit: $7,500, except that a plaintiff may not file a claim over $2,500 more than twice per year. Suits on behalf of local public entities are exempt from the twice-per-year filing limit. $4,000 is the limit for suits involving a surety company or licensed contractor.
# Where to file: Where defendant resides or injury occurred. For contract suits, where contract signed or where performance expected.
# Service: Personal service by sheriff or court-approved disinterested adult. Any mail service providing return receipt.
# Hearing Date: 20-70 days after the claim is filed.
# Attorneys: Not allowed unless attorney represents self.
# Transfer: If defendant counterclaims for more than $7,500, counterclaim removed to higher court if judge permits.
# Appeals: By defendant (or plaintiff who lost on a counterclaim) for new trial; to Superior Court within 30 days. Motion to appeal is filed with the clerk of the small claims court.
# Special provisions: Equitable relief available. Interpreters available. Small claims advisor available.

Chase's lawyer states in the letter they send you that even if the amount is lower than the small claims threshold, they'll still sue you in superior court and seek additional legal fees. My amount was lower than the threshold and they filed in superior court.

[treehugger1]

BB, Too bad for Washington.

Here is small claims in Oregon under the revised statutes. It appears that civil penalties can be prayed for in small claims. Then again, I'm no attorney.

46.405 Small claims department; jurisdiction. (1) Except as provided in subsection (6) of this section, each circuit court shall have a small claims department.

(2) Except as provided in this section, all actions for the recovery of money, damages, specific personal property, or any penalty or forfeiture must be commenced and prosecuted in the small claims department if the amount or value claimed in the action does not exceed $750.

(3) Except as provided in this section and ORS 46.455 (2)(c), an action for the recovery of money, damages, specific personal property, or any penalty or forfeiture may be commenced and prosecuted in the small claims department if the amount or value claimed in the action does not exceed $7,500.