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Not all collections agencies are so sloppy and unscrupulous. If you do owe the money and they do have the documentation to support it, you may well have a judge
by eli 12y ago
Not all collections agencies are so sloppy and unscrupulous. If you do owe the money and they do have the documentation to support it, you may well have a judgement against you and that definitely will hurt your credit score.
Some companies (like say gym membership) have internal collections departments that can be quite aggressive. They would certainly be able to back up any lawsuit.
In general, you really want to try to avoid being sued.
- toomuchtodo 12y agoYou're right; occasionally you'll find a collection agency that has their act together. Luckily, collection agencies purchase their debt for pennies on the dollar, so they're happy to get anything. Start by offering them 10% of the debt, and go from there up to no more than 25% of the debt, stipulating (in writing) that its "Pay For Delete". This will require them to remove the negative credit information from your credit report/profile in return for payment. 4 states prohibit wage garnishments at all, and other states set the maximum at between 15-25% of your disposable income: http://www.walkawayfromdebt.com/worksheets&charts/wage-garnishment.html http://www.walkawayfromdebt.com/worksheets&charts/wage-garni... (Disclaimer: Colorado SUCKS. They permit up to 75% of disposable income to be collected). I've helped negotiate away quite a bit of unsecured debt for close friends. Its easier than you think.
- eli 12y agoThat isn't really something I would brag about, but good for you I guess.
- toomuchtodo 12y agoDebt isn't a moral obligation, and to somehow frame it as such is dubious at best. If you as a debt owner or servicer can't keep your books straight, you have absolutely no business attempting to collect on a debt. If you're taking someone to court or attempting to take their wages, you better be damn sure you're in the right.
- troupe 12y agoI believe most people would say that when they agree to take money with a promise to repay it, they are under a moral obligation to do so.
- toomuchtodo 12y agoSo when an individual borrows and fails to repay, there is a moral hazard, but when a business declares bankruptcy and restructure, that's smart business? Debt is a contractual issue, not a moral one. As HackerNews entrepreneurs should keep in mind, its the ability to easily shed debt (and not be shackled to those debts for decades) in the US that creates the environment for startups to take the risks they do.
- jeremyjh 12y agoWho is lending money to startups?
- toomuchtodo 12y agoAm I not reading often on HN about long-term agreements startups in SFBA are committing themselves to (specifically real estate/office space leases)? That's a debt, and when a startup burns up, any time left on that lease is a debt left unpaid. Debt is not just VC money in hand.
- patio11 12y agoAnyone who invoices after services are provided instead of before, for one.
- eli 12y agoThe moral obligation is to TRY to pay it back. I fully concede that it's not a black and white issue, but there's a big difference between refusing to pay a debt and being unable to pay a debt. If you borrow money for any reason with the understanding that you'll pay it back, but you secretly intend to keep it all along, then you are doing something wrong (morally if not legally).
- throwaway_debt 12y agoIs there a way to contact you? I'm facing some very relevant circumstances, unfortunately, and would like to ask your advice.
- ufmace 12y agopatio11 had a great post on that about a year ago that you might be interested in: https://news.ycombinator.com/item?id=7135833 https://news.ycombinator.com/item?id=7135833
- toomuchtodo 12y agoThanks for posting patio11's advice!
- 20141008 12y ago> In general, you really want to try to avoid being sued. In reality, companies will do almost anything to avoid suing you for small amounts of money. The financials don't make sense. E.g. how much gym debt would it take to justify a lawyer's fees to pursue you? Not less than several thousand dollars, probably much more.
- eli 12y agoDepends. I've personally been to small claims court and seen what appeared to be a staff attorney for Capital One suing dozens of people for overdue balances. I'm pretty sure the big gyms that have in-house collections. I would imagine people signing a year contract and then changing their mind and trying to get out of it happens quite often.
- Silhouette 12y agoThis might be true under the US legal system, where as I understand it each party usually pays their own costs. In a loser-pays system, particularly one with an efficient small claims procedure, the conclusion might be different. In any case, if you're wilfully and knowingly taking on debts you can't repay and using a card like this to CYA, your bigger risk in some places might be getting arrested for criminal fraud. Good luck ever getting credit again whatever the CRAs say about you if you've also got a criminal record for a fraud-related offence.
- HelloMcFly 12y agoIt's not a sloppiness on the part of the agency. Often the companies selling their debt to the agency provide no other information besides the information about who the person is and how much they owe. The agency often can't produce verification of a debt because the sellers of the debt don't provide it.
- bbatchelder 12y agoProbably shouldn't buy that debt, then.