Expert: Regan Shinski - 1/8/2010

Question
I have been getting calls from Apothaker And Assoc. concerning a debt. I have been corresponding with a consumer law attorney who's advice is NOT to call back Apothaker. He recommends that once a lawsuit is filed, to then hire a consumer attorney. He says that most lawsuits filed by collection agencies are weak. They usually do not have the documentation needed to win the suit.
My debt is less than $1,000. He also mentions that for debts under $1,000 he would usually negotiate, and with debts over that amount they are usually done in a courtroom setting.
Can you give me some advice/insight into what he has told me?
Is he just out to make his own money from the fee he will get, or do the consumer law attornies really want to help people?

Answer
Dear Ann:

His advice has merits but is also nothing you cannot do for yourself.  It does not make sense to me to pay large legal bills for a debt under $1000.  I believe most collection agencies would be open to settling for less than the amount owed.  you just have to make them think that you have little to give and may file bankruptcy.  If you file bankruptcy, they get nothing.  You can also negotiate deleting the collection from your credit reports and/or monthly payments if needed.  The results depend on the creditor and your situation.  There is no guaranteed thing they will settle for - if at all but it is worth the effort.

The comment about the cases being weak, I am not as sure about.  For example, if this is a credit card debt, they need to provide your application and proof payments and purchases.  They may or may not have all that information and you can challenge them to produce each receipt/signature in court but it is a tedious process.

The easier way to get rid of a debt under a thousand dollars is to get a Fair Debt Collection Practices Act (FDCPA) violation on the collection agency.  This involves validating the debt, disputing with the credit bureaus.  Credit repair companies - like us - do this all the time.  The idea is to get a violation - usually not too tough - the statute calls for up to $1000 in fines.  This violation then becomes the basis for removal of the bad credit information and offsetting the debt.  Read these boards or do further research.  It's difficult to get into in this forum but can be done!

So you either have to choose to aggressively fight it to get a violation of the FDCPA or try and settle for less.  That is your basic choice.  You don't need an attorney for either but it's up to the individual person if they feel confident enough to handle it themselves.

Good luck,
Regan
mbscompany@aim.com