If you have credit card debt that exceeds $100,000 and you are insolvent or have very little money, should you fight the debt collectors, try to reach a settlement, or just sue them?
If you’re in this position, it might make sense to fight. In fact, in a way you are in the perfect position to fight and win. This is why. Although the amount owed is large, a victory for debt collectors will likely bring little or nothing to them. That means they have to invest a lot to get just a little, even if they win. Oddly enough, if you make everything clear to them completely and offer them the most you can pay or what they can charge (probably less than five cents on the dollar), they will almost certainly not accept. It’s too little to be let go for that amount. On the other hand, if you fight and they have an idea of what your assets really are, they will probably drop the case for nothing. Like I say, weird, but that’s exactly what clients report to me all the time. It may have more to do with the attorney’s ego than anything else, as no one wants to settle for such a paltry amount; however, it is even more useless to spend thousands of dollars for nothing.
But from your perspective, it makes a lot of sense to fight. You have nothing to lose right now. The defense will almost certainly not increase even the judgment amount, let alone the collectible amount. But if you don’t fight, you will have a great judgment hanging over you for ten or twenty (or even more) years. You’ll never get your head out of the water. In many states, that judgment automatically results in a lien on all real property (land). So that could be a huge hassle for you, even if it earned them little or nothing. And it’s always worth noting that if the wrong company is suing you and you give them a judgment, you’ll probably still be liable to the company that was entitled to sue you (you need to get the company to show that it is entitled to sue you). ). Even on legitimate debts, debt collectors often add illegal fees or charges.
Since your assets are so low, a lawyer may be out of the question, so it might make sense for you to take care of this on your own. And this is not rocket science: you can do it. The dollar amount MAY (but surprisingly not always) make the company a little more reluctant to drop the lawsuit if you fight, but the same economic considerations of a case seeking a much smaller amount of money will come into play eventually. . And there’s a not inconsiderable chance that they don’t even have (and can’t get) the things they need to beat you. That is, you may have a good chance of winning even if they fight.
Of course you’ll want them to know you’re assetless at some point, but I’ve always found it more effective to make them have to work for it. Perhaps this is because they will believe it more if they have to pay (their lawyers) to get the information than if you give it to them for free.