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Debt Collectors Are Transforming the Business of State Courts

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Re: Debt Collectors Are Transforming the Business of State Courts

#71

Post by netcan »

chrisseaton wrote: post #65
bergstromm466 wrote: post #64

Earlier quoted context omitted.

Yeah ok. I think you will keep scapegoating these other ‘evil’ ‘no-defence‘ people, until you yourself are on the receiving end of systemic inequity - or systemic failure - at some point and that’s when the penny will drop...

It's pretty fundamental in our society that the court looks at the arguments presented before it. If the claimants make a reasonable case and you have nothing to say about it as the defendant then the court will act on that. The idea is that it stops people coming into the court prejudiced.

This isn't a case where a guy didn't pay his builder and then no-shows at court.

These are debts sold at >10% of face, often smallish debts that have accrued massive interest. Some agencies specialise in persistent calling. Some specialise in deal-making. Some specialise in legal proceedings. These are the ones we are talking about.

To work, they need to keep legal costs low. They often don't bother to have a case, because they're happy to win just the no shows. That's the formula. Buy 100 notes. Take them to court. 80 or so will no show. You can then try to seize the their assets. The whole thing is premised on the fact that these defendants don't open their mail. Either side making a case to a judge is rare.

It's a misuse of the legal system, and the court shouldn't allow it.

Re: Debt Collectors Are Transforming the Business of State Courts

#72

Post by chrisseaton »

netcan wrote: post #71
chrisseaton wrote: post #65

Earlier quoted context omitted.

It's pretty fundamental in our society that the court looks at the arguments presented before it. If the claimants make a reasonable case and you have nothing to say about it as the defendant then the court will act on that. The idea is that it stops people coming into the court prejudiced.

This isn't a case where a guy didn't pay his builder and then no-shows at court. These are debts sold at >10% of face, often smallish debts that have accrued massive interest. Some agencies specialise in persistent calling. Some specialise in deal-making. Some specialise in legal proceedings. These are the ones we are talking about. To work, they need to keep legal costs low. They often don't bother to have a case, b…

> It's a misuse of the legal system, and the court shouldn't allow it.

I really don't see how.

They file a case. They present an argument. The other side doesn't. What should the court do? Keep asking the other side to bother to show up? If they did that you could block any claim forever by just not showing up. That's not justice.

Our whole society's legal basis is 'show up and present your case and have it judged'. It's called the 'adversarial system' - look it up.

If it's a genuine debt, and it sounds like it is, then either pay up or argue your case in court.

Re: Debt Collectors Are Transforming the Business of State Courts

#73

Post by mokus »

vkou wrote: post #29
londons_explore wrote: post #22

Earlier quoted context omitted.

Hypothetically, what would the world look like if we made all debts dischargeable by bankruptcy, and bankrupcy a process so simple you could just text a number and be done in 15 minutes? A bankruptcy would simply automatically put all your assets up for a same-day auction. Any unlisted items would be auctioned as a lump, for anyone willing to research what you actually owned to play 'Storage Wars' with. Anyone could…

We'd have less debt, which is bad for the economy, but good for individuals.

If this is true then that’s a sign that we are measuring the wrong things when we talk about “the economy”. If something is good for the economy but bad for people, then fuck the economy. Find a new way to measure it that better aligned with what is good for people.

It seems quite fitting here that Goodheart’s Law came from an economist.

Re: Debt Collectors Are Transforming the Business of State Courts

#74

Post by verylittlemeat »

netcan wrote: post #14

There have been journalists & researchers who covered these debt collectors at court. When defendants showed up, organised, they usually won. The debt collectors' lawyers didn't arrive prepared to win, because most people didn't show up. If you can win 85% of cases just by showing up, why bother. A court system that allows these dynamics to dominate isn't serving well.

Why would a person who legitimately owes a debt win just by showing up?

I had a small unsecured debt that was put into collections and then I was served an order of execution by the marshal to appear in court. I went to court and the judge made me sit down with the debt collectors lawyer and a mediator and we worked out a repayment plan at about 60% of the original balance.

I really don't understand what "win" means in this context besides avoiding a default judgment.

Re: Debt Collectors Are Transforming the Business of State Courts

#75

Post by refurb »

bergstromm466 wrote: post #67
refurb wrote: post #26

Earlier quoted context omitted.

What do you mean "receive the least"? Pretty much all the social programs we have target the poor, not the rich. The poor are the ones that receive the most.

Favourable (read ‘low’) tax rates for the propertied classes, as well as the neo-liberal nation-state’s tax cuts, are ribbon wrapped gifts

Tax rates are far lower for the poor than the rich. In fact, the wealthiest pay a majority of income taxes.

Re: Debt Collectors Are Transforming the Business of State Courts

#76

Post by netcan »

chrisseaton wrote: post #72
netcan wrote: post #71

Earlier quoted context omitted.

This isn't a case where a guy didn't pay his builder and then no-shows at court. These are debts sold at >10% of face, often smallish debts that have accrued massive interest. Some agencies specialise in persistent calling. Some specialise in deal-making. Some specialise in legal proceedings. These are the ones we are talking about. To work, they need to keep legal costs low. They often don't bother to have a case, b…

> It's a misuse of the legal system, and the court shouldn't allow it. I really don't see how. They file a case. They present an argument. The other side doesn't. What should the court do? Keep asking the other side to bother to show up? If they did that you could block any claim forever by just not showing up. That's not justice. Our whole society's legal basis is 'show up and present your case and have it judged'.…

I'm not thinking about this as an individual case, or debating an individual case.

I'm talking about a business model whereby an agency systematically buys "no show debt" at a tiny fraction of face and mass produces personal bankruptcy. As the article shows. This business model (subsidised by the state, which provides the court), in 2020, is civil law.

That business model is not something the courts should play ball with. Lawyers and judges will stay within the legal rules.

In any case, I think there needs to be a debt regulator...

Re: Debt Collectors Are Transforming the Business of State Courts

#77

Post by intopieces »

verylittlemeat wrote: post #74
netcan wrote: post #14

There have been journalists & researchers who covered these debt collectors at court. When defendants showed up, organised, they usually won. The debt collectors' lawyers didn't arrive prepared to win, because most people didn't show up. If you can win 85% of cases just by showing up, why bother. A court system that allows these dynamics to dominate isn't serving well.

Why would a person who legitimately owes a debt win just by showing up? I had a small unsecured debt that was put into collections and then I was served an order of execution by the marshal to appear in court. I went to court and the judge made me sit down with the debt collectors lawyer and a mediator and we worked out a repayment plan at about 60% of the original balance. I really don't understand what "win" means…

> Why would a person who legitimately owes a debt win just by showing up?

Debt collectors often don’t play by the rules, or don’t keep good records that are required to legally collect the debt. Even if they do, it’s not like the lawyers are likely to spend time tracking down the info for a single case to prove it.

“Win” means the debt is found invalid due to one of these reasons.

Re: Debt Collectors Are Transforming the Business of State Courts

#78

Post by verylittlemeat »

netcan wrote: post #68
LorenPechtel wrote: post #55

Earlier quoted context omitted.

Or is this because those who don't show up know they have no defense? While I agree there is a problem you're not proving it here.

No. This isn't a rhetorical example. Most defendants don't know anything about the case. They've been avoiding collection calls for years as agencies sell and resell their debt. Piles of unopened mail, etc. For their part, the agencies tend towards sloppiness. Some debt sells at Thinking about this is a matter of justice is ridiculous. It's not a justice driven process, it's an economics driven process. The agencies…

>They've been avoiding collection calls for years as agencies sell and resell their debt. Piles of unopened mail, etc.

OK but with the exception of fraud and incorrect identity then the rest of the people have a real original debt right? The debt might be sold at a fraction of it's original amount but that's because the debt collector takes a risk to put in time and legwork in exchange for collecting a real legal debt.

I am against exploitative debt fees/interest and I realize the debt collection world is full of shady figures but the narrative of the debtor as victim is a bit oversold.

Re: Debt Collectors Are Transforming the Business of State Courts

#79

Post by inetknght »

oh_sigh wrote: post #40
WD-42 wrote: post #3

Imagine working for a company that buys up poor people’s debt in order to sue them.

What if you buy up the debt of rich people who can, but don't want to pay?

Rich people have unserviced debt? Wouldn't that make them poor people?

Re: Debt Collectors Are Transforming the Business of State Courts

#80

Post by joshuaheard »

I do commercial collections (B2B). The article states, "Unlike most court rulings, these judgments are issued, as the name indicates, by default and without consideration of the facts of the complaint—and instead are issued in cases where the defendant does not show up to court or respond to the suit." I am licensed in California and Texas, and in both states one must "prove-up" a default before judgment is entered by presenting a "prima facie" case. In other words, you must prove your case before a judgment is entered, even if the defendant does not show up.
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