Sunday Process Server

[treehugger1]

I noticed about 3-4 weeks ago that citi had filed another suit against me for a second citi-backed card. I was finally served this morning by a process server. He was quite gracious and we chatted for 10-15 minutes. He said he was seeing increased activity by cap1 and citi. It seems there are more and more suits filed due to defaulted home equity lines of credit.

Once again , I have to wonder what the creditors hope to gain in such a scenario where Oregon is now 3rd in the nation for foreclosures.

It is also incredibly clear here that the number of BK filings are not even close to the number of defaulted unsecured debt suits or foreclosures. I guess more people are simply saying "screw it, sue me," than those who are filing BK.

[ryan]

It is also incredibly clear here that the number of BK filings are not even close to the number of defaulted unsecured debt suits or foreclosures. I guess more people are simply saying "screw it, sue me," than those who are filing BK.

Yeh, there was an article awhile back about the growing trend of "informal bankruptcies", where debtors just stop paying but take no other action legally to defend or wipe out the debt.

[frogger]

Yeh, there was an article awhile back about the growing trend of "informal bankruptcies", where debtors just stop paying but take no other action legally to defend or wipe out the debt.

I'm seeing a lot of that. When you don't have anything, you don't have a decent job, you have no assets to take.......

Why file bk?

Wait until your economic situation starts to improve and then file.

Lots of things can happen between now and filing.

[jacko]

Thats what I am doing.

I'm seeing a lot of that. When you don't have anything, you don't have a decent job, you have no assets to take.......

Why file bk?

Wait until your economic situation starts to improve and then file.

Lots of things can happen between now and filing.

[HHM]

It is also incredibly clear here that the number of BK filings are not even close to the number of defaulted unsecured debt suits or foreclosures. I guess more people are simply saying "screw it, sue me," than those who are filing BK.

I recently saw some numbers out of New York, there is a "single" collection firm (one of the larger ones in the state that has been doing it for 2 decades) files an average of 80,000 lawsuits per year to collect unsecured debt (yet, they only have 14 attorneys).

By contrast, for the 12 months ending in June 2009, only 53,209 BK's were filed in the state of New York.

[GoingDown]

I would imagine that most of those 80,000 lawsuits never get a penny paid back to them.

I think the creditors are scared of what is happening and they are trying to make examples out of every debtor they can to send a message that debtors will be sued in an effort to scare people and keep them from defaulting, but it won't work.

This ecomony is toast.

We're in the 2nd Great Depression.

And we've got an inexperienced president at the helm who doesn't have a clue about what to do to get the economy back on track. All he can think of doing is pie in the sky idealism while Rome (er, I mean the U.S.) burns.

[HHM]

I would imagine that most of those 80,000 lawsuits never get a penny paid back to them.

I think the creditors are scared of what is happening and they are trying to make examples out of every debtor they can to send a message that debtors will be sued in an effort to scare people and keep them from defaulting, but it won't work.

This ecomony is toast.

We're in the 2nd Great Depression.

And we've got an inexperienced president at the helm who doesn't have a clue about what to do to get the economy back on track. All he can think of doing is pie in the sky idealism while Rome (er, I mean the U.S.) burns.

Actually, you'd be surprised at the numbers. Keep in mind, they don't really need to collect on very many of them to be wildly profitable.

Let's assume it is a low value portfolio (meaning the average balance owed is $2,500 or less, the sweet spot for collection lawsuits is $800-$2,500; those portfolios yield the highest returns.

Let's assume the average debt is $2,000
80,000 law suits filed
Purchase price of portfolio, 5 cents on the dollar.
Total collectible amount, $160,000,000
Filing fee $100

Purchase Price of Portfolio, $8,000,000
Filing Fee Costs: $8,000,000
Figure a 15% success rate
Gross Revenue, $24,000,000.
That is a 50% return on investment for only collecting 15% of the portfolio.

This doesn't include the accounts they are able to collect without having to file lawsuits.

[UpaCreekinCA]

Yeah Citi and Chase both coming after my unemployed wife with suits. You can't get blood from a rock. We live in CA which is a community property state so we will both be filing Ch7 most likely next month. I let my AMEX know we would be filing (was current) and they immediately turned it over to NCO who wanted to play "let's make a deal". "F U buddy, now I have another account gone to collections on my credit and you want me to cough up $400 to settle $800, I'd rather pay my attorney a bonus."

The problem (IMHO) with not filing now and wiping things out is creditors have 5 years to come after you. For all those people walking away from HELOCs, 2nds, CCs, etc without discharging it legally is when the sun rises tomorrow and you are back on your feet, they will come after you then and can sue, lien property etc. It is MUCH cheaper to file now with our new economy than battle lawsuits and collection agencies tomorrow. A 600-650 fico is the new 780 of yesterday.