[dlee360]

Hey Guys,
Need advice. I have been contact by a collection agency to pay debt. The debt is for 10k+ and they are seeking 8k. I cosigned for a "friend" 4 years ago for this debt (motorcycle) and it went late many times and it was finally sold to a collection agency in Oct 2005. They have been unable to collect the money from the primary borrower and now they're going after me. Since it still is a valid debt, I don't think I have a choice to pay it. But my question is, can I take my "friend" to small claims and try to collect money back?

Thanks,
~Screwed

[shunned]

Gee that would twist my lemons!

I would talk to a lawyer to discuss probability of recovering funds.

[CaptainForest]

Yes you can take your friend to court and sue him for 8K (if that is what you settle the debt at).

And I hope you have learned a valuable lesson. Never co-sign for anyone!

There is usually a reason they need a co-signer, because their credit is so bad that they can't get a loan themselves.

In that case, they shouldn't get the item since they cannot afford to make the payments.

[dlee360]

Oh. Lemons are twisted! Yeah... dumbest mistake of my life. Obviously I will be contacting a lawyer, but here's another predicament... He lives in Colorado. What is the best way of obtaining a laywer in another state? Or should I obtain a lawyer in the state I reside? And further down the line, so I take him to claims... what he doesn't have any money (his parents do - a lot of it - but I'm sure I can't go after them). Is it worth spending $2000 (I'm not sure how much a lawyer costs) if I won't be getting anything back?

[CaptainForest]

No need to hire a lawyer.

Take him to small claims court, no lawyer, represent yourself.

You can not go after his parents.

But, if you win your case, judgements last for about 20 years or so. So within 20 years, he is bound to have a job which you can garnish his wages, freeze his bank accounts, place a lien on his house, etc.

Where to file – Colorado or Your State?

I don't know.

Most lawyers give free consultations, and they might be able to point you to the right track.

[excon]

Hello dlee:

Couple things to consider. The captain is right. You don't need a lawyer. As a matter of fact, any lawyer worth his salt wouldn't even take the case because he knows that his fees will be more than the judgment could ever be. Small Claims court works VERY WELL, and you don’t need a lawyer there. I don't know what jurisdiction you'll need to file in. Lots depend on where the document was signed, and stuff like that. Call the clerk of the court in each jurisdiction, and they should tell you where you need to file. If you have to actually go to Colorado to court (probably not to file), then it may be worth it. Small claims courts have different jurisdictional limits on the maximum award allowed. $5,000 is average, but Colorado might be more or less.

If you win a judgment, and are persistent, you probably can collect, even from a poor slob. Not his parents (unless he was a minor, and even then I'm not sure). But his parents don't know that. More on that later.

Next, you'll need to deal with the collection agency. Actually, it’s the first thing you need to do. Yes, you'll probably have to pay something, but DON'T lay down for them. EVERYTHING is negotiable. This is a bad debt. Depending on how bad, the lenders probably sold it to some bottom feeder for $.50 on the dollar. If they collect ALL of it from you, then they've doubled their money. If they don't collect from you, they'll probably sell it to an even scummier bottom feeder for $.10 on the dollar, and they'll try even nastier tricks.

The point is, you can do much better than $8 grand, and I believe you can save your credit rating too. Remember, you're in the driver’s seat. YOU have the money they want. In other words, don’t send them the money and THEN ask them to remove it from your credit report. And, don’t let them tell you that they can’t get it removed. They can.

As soon as you send them whatever you wind up negotiating, make a demand upon the parents. Yeah, sure. You got to act like a collection agency now yourself. If you can get the parents to pay, cool. If not, then you're stuck with their bum progeny.

excon

[excon]

Hello again:

Let me expand upon how you can effectively maintain your credit rating. When you are negotiating, one of your main points is that your credit history must not be damaged in any way by this mishap. The "mishap", however, has most likely already been reported to one or more of the three credit bureaus, and the guy will tell you that he CAN'T remove the item already there.

Technically speaking, he's right. He can't remove it. But it can be removed by something he DOESN'T do. Plus, he's not lying. He's just too stupid to know how to satisfy you and get the money. So, you're going to help him.

Here's the plan. In exchange for the money he wants, you get a promise from him (IN WRITING ONLY, PLEASE) to NOT respond to the credit bureaus when they ask about this debt. Once the promise is obtained, you begin the procedure by challenging the entry on your credit report with the credit bureaus. They are then required to begin an investigation into your claim. They'll contact the collection agency who reported the debt. If that agency does not respond within 30 days, the item will be removed from your credit report. Simple. It works. Everybody's happy.

excon

PS> Can you conclude that I don't like bill collectors?