We get calls every day asking us to negotiate debt. For some people, paying debt is a good idea. For others, its not such a good idea. Most people do not realize the nature of debt. The typical phone call goes like this…”Attorney Artim, I have a debt with Chase that I’d like to settle, because they sued me. Can you negotiate this for me?” Well, right off the bat there is a red flag. Chase doesn’t sue on credit card cases and they haven’t filed a lawsuit in Pennsylvania since 2012. So we know that “Chase” isn’t the company that sued you, it must be someone else. Yes, maybe the lawsuit is based on a Chase account but its not Chase that is suing you. This changes everything. In my experience, Chase sells all of its delinquent accounts rather than filing lawsuits on their own. Much of their debt is sold to a debt buyer called “CACH” out of Colorado. Some Chase accounts get sold elsewhere. So now the real question comes…. Should I pay this debt? My answer, at this point, is probably going to be NO. When debt gets sold its quite the quirky transaction. A block or grouping of accounts is bundled together and then set up for either an auction style bid or is sold directly to a debt buyer. What is sold? In most cases, its a name, address, account number and estimated balance. That’s it. No documents, no evidence, no proof of anything. So to answer the question “should I pay this debt” my answer has to be no. This debt buyer, whether its CACH or some other entity, cannot prove a case against you in a court of law and likely has little or no evidence of your account/debt. If they cannot prove a case, it means that they cannot prove that they own the debt. If they cannot prove ownership of the debt, then why would you pay? We hear horror stories all the time about paying a debt only to have another collector come knocking for more money on the same account. I don’t ever want to be in that position and I don’t ever want my clients to be in that position. Don’t pay on this type of debt unless the other side can prove a case or unless they offer you the deal of the century. By “deal of the century” I mean a substantial reduction in balance, on good terms, and with a release certifying that this is settlement in full.
Now there are circumstances where you should pay the debt. The first is if you need to clear your credit report immediately. Perhaps you are buying a house or searching for a new job. Under those circumstance, I’d recommend settling the debt. Another scenario is where the debt is smaller. I wouldn’t necessarily recommend defending a $500 lawsuit unless the client had certain circumstances. Cost effectiveness is key. We also get calls from clients who cannot stand the thought of having an “active” lawsuit out there. They can’t sleep, can’t eat, are worried all the time. For that client, I’ll make an exception to my “no negotiation” strategy because the client’s best interests are all that I am concerned with.
If you’re facing a lawsuit or a debt collection letter please give us a call at 412-823-8003 for a free consult. We’ll walk you through the pros and cons and see if we can help you or if it makes sense to take some other measure.