Posted by Anonymous on 6/15/06 10:58pm
Msg #126279

Collection cooperative

Well, some of you did not like my last idea of faxing blank pages say 500 so in order to get the signing companies attention and get paid.....I did not think of the black pages....thanks for that idea.

Okay here goes.

Pursuring companies out of state for collection is a pain the XXX. However, we are notaries, we can beat these people at there own game.

Say you live in Texas and you did not get paid by a California signing company...let's pick a name....SOCKS Signing or Sign on the Y. Sell the claim to a CA notary perhas in the county where that signing company is located for $.01 and a contingent payout. That notary could file a concilation claim or even better aggregage claims. The CA could then take a service fee on the pool of claims say $200 plus filing and collection fees on a $2000 claim. If the CA notary can successfully levy against the signing companies bank account, the proceeds would be distributed prorata to the intial claim holders per the agreement.

Progess in the collect case would likely make interesting read for notaries on the board. We might lose a few cases, but likely become more experienced over time.


Once the signing companies determine collectively notaries have the power to pursue and collect. Maybe the bad ones will shape up. The good signing companies have nothing to worry about.

I look forward to your feeback.

Reply by BrendaTx on 6/15/06 11:05pm
Msg #126280

Re: Collection cooperative - No matter "who" you are...

You have a very good idea IMHO. I think it sounds a little complicated for me, but I am sure you could walk me through it. It's like judgment collections. The only part that I see to shoot holes in is whether or not this would be something that could be done without an attorney since money changes hands between the seller of the debt and the buyer.

It would need some research.

Reply by John_NorCal on 6/15/06 11:19pm
Msg #126285

Re: Collection cooperative - No matter "who" you are...

Interesting idea, just wonder what the mechanics would be. Another thing that would be useful would be to be able to report the deadbeats to a credit reporting agency like Dun & Bradstreet for instance. Just as consumers are dinged for slow or non payment, so should the deadbeat companies.

Reply by HisHughness on 6/16/06 1:24am
Msg #126292

My limited understanding of the law is that you cannot sell someone the right to sue a third party. You can make them your agent to sue, but the claim nonetheless must be brought in your name. Which means that the defendant has the right to confront the witnesses against him. Which further means that all the defendant has to do to blow you out of the water is to insist that your principal appear for trial. Not a good plan, I suspect.

Now, if you are interested in a cooperative that can purchase stink bombs wholesale, and begin lobbing them through the windows of deadbeat signing services, you'd certainly have my support.

Reply by Kevin/Ct on 6/16/06 6:16am
Msg #126297

Just a couple of corrections. He would be assigning the debt as a property right. He can not make someone his agent to sue unless the party filing the suit is an attorney. The suit would be filed under the name of the holder of the debt. The defendant has a constitutional right to confront his accusers (the plaintiff) not the witnesses. However, if the matter went to trial the plaintiff would need to call the former holder of the debt as a witness. Once called as a witness the defendant has the right to cross examine the witness. Many of these cases end in a judgment after default because the defendant has no defense, and does not contest the plaintiff's claim. In which case there is no need to call any witnesses because there is no need for a trial.

Reply by Kevin/Ct on 6/16/06 6:36am
Msg #126298

If by right to confront the witness you mean his right to cross examine the witness, that is correct. However, the defendant cannot compel the plaintiff to produce any particular witness in the presentation of the plaintiff's case in chief. It is difficult to conceive of it, but the plaintiff may be able to present other evidence in lieu of the testimony of the former holder of the debt.If the plaintiff never calls the former holder of the debt, the defendant has no right to cross examine the witness. If the defendant felt that there was some benefit to his case in chief in presenting the testimony of the former holder of the debt, it would be incumbant upon the defendant to subpoena the individual as a hostile/adverse witness.

Reply by Kevin/Ct on 6/16/06 4:21am
Msg #126296

The idea has merit. I suggested the same thing to the abstractors on Source of Title several months ago, but they were pretty much unresponsive and apathetic. I am glad to see that you are considering the idea also.

What you are talking about is an assignment of a debt. This is similar to the assignments of mortgages that you see in lender's document packages. The reason that you need to assign the debt is to avoid a upl. You cannot file a claim to collect someone else unless you are an attorney. However, you have a constitutional right to represent yourself in collection of your own debts. Once the debt is assigned to you it becomes your property.

There are several drawbacks to the plan, but no more so than any litigation would present. The former owner of the debt (The Assignor) would probably have to appear at the trial as a witness because he/she has all the personal knowledge of the transaction at issue. In some states such as Connecticut, the defendant has the right to transfer the case to the docket of the Superior Court in order to preserve his rights to a jury trial and to assure his appeal rights. If the case is transferred to the Superior Court, you may need to hire an attorney because you would be held accountable to the same rules of evidence and procedure as an attorney. You would also need to take the assignment of the debt in your name personally rather than in the name of a corporation or LLC because in most states you can not represent a corporation or LLC in court unless you are an attorney.

Reply by HisHughness on 6/16/06 6:51am
Msg #126299

I disagree that the approach is meritorious. The signing agent most likely will end up in a worse positon than before he started. First, to rely upon the possibility of default judgment is sheer folly; in small claims court, where such a case almost surely would be brought, you can probably be assured that a complaint will be answered. Second, once answered, the evidence of the original claimant would be essential to proving the case, which means that the Maine signing agent who assigned the claim to the California signing agent to collect will still have to go to California to litigate his claim. Third, any lawyer worth his salt is not going to assume simply a defensive position; if at all possibile, he is going to file a counterclaim arising from the same transaction. The upshot: The signing agent still has to appear in the litigation of his case, but he has no control over the course of the litigation except as a witness, and may well wind up with a judgement against himself. Not an outcome to be desired.

Reply by LawrenceOK on 6/16/06 7:34am
Msg #126301

I vote for the stink bomb approach.

Reply by Kevin/Ct on 6/16/06 7:56am
Msg #126302

I would have to disagree. I have been doing collections work for 22 years. In the case of dead beat clients, they usually have no defense. They simply are short of money. Most of the time they do default without the need for a trial. In such cases they cannot afford to hire a defense attorney, and simply rely on the plaintiff's apathy in not prosecuting his claim.True, they can engage in delaying tactics and file frivolous counterclaims, but that is true in any litigation whether filed by the assignor or asignee of the debt. The determining factor whether to proceed will be whether the amount of the debt will justify the cost of the litigation. If I were the signing agent I would take a shot at litigation. If the defendant defaults nothing is lost, and it becomes simply a matter of whether the defendant has assets to satisfy the judgment. If the defendant chooses to defend, a decision has to be made as to whether the cost of travel for the former holder of the debt to testify is justified by the amount of the suit. If not, it is a simple matter of withdrawing the case. With respect to the issue of a countersuit, see my comments below. If all that is lost is the small filing fee, I would feel much better at having done something rather than just throwing up my hands and giving up.

I agree that the testimony of the original holder of the debt is important, but it may not be indespensible depending upon the defendant's conduct. I have won cases based on documents that constituted admissions by a party opponant. ...the confirmation of the signing...the defendant's failure to respond to subsequent demands for payment ( which the assignee plaintiff would make prior to filing suit) , etc. The lack of the former holder of the debt's tesitmony makes it more difficult to win, but not impossible. If the case is transferred to the superior court, there is the option of taking his deposition, and presenting it at trial in lieu of his testimony.

With respect to the potential of a countersuit being filed against the former holder of the debt, this is not possible if he is only a witness and not a party litigant.

Reply by Jersey_Boy on 6/16/06 8:18am
Msg #126303

Wouldn't work in NJ

NJ specifically does not allow a notary to act on behalf of anyone else in the collection of a debt.

Reply by Kevin/Ct on 6/16/06 8:26am
Msg #126304

Re: Wouldn't work in NJ

That is the purpose of the assignment of the debt. Once the debt is assigned, it becomes the property of the assignee. The assignee has a constitutional right to represent himself in the collection of HIS debt. He is not acting on behalf of anyone else. If the former holder of the debtt is involved, it is only as a witness.

Reply by BrendaTx on 6/16/06 9:35am
Msg #126311

One of those cases where...

Kevin (who is a lawyer) would not have *recommended* it to SourceOfTitle.com readers if it did not have merit. I am all ears and not going to second guess him at this point.

Reply by Kevin/Ct on 6/16/06 10:06am
Msg #126313

Re: One of those cases where...

Thank you, Brenda.

What needs to be done is to set up a network of individuals who are willing to file the claims and appear in court. Agreements need to be made between the notary who has incurred the debt and the notary filing the case in which agreement compensation needs to be worked out between them as to how much each is to be compensated for the claim. The claim will not exceed the amount of the debt plus court costs. So the original notary will need to discount his debt in an amount agreeable to the other notary to compensate him for his/her trouble in prosecuting the claim. They will also need to agree on how the filing costs are going to be handled.

The notary filing the claim needs to fully explore with the other notary the reason for non payment to determine if non payment is the fault of the delinquent client or the notary. If the claim is valid, a written assignment needs to be executed between the notaries which evidences the sale of the debt from one notary to the other. This will be needed at trial as evidence. The original notary may be needed in trial to testify. The cost of his/her travel expenses need to be discussed up front between the notaries before the case is filed. If the defendant fails to appear or to answer, he will be defaulted, and judgment will enter against him without need of trial. In some states this is handled strictly by written motion in others a hearing in damages may be required. When judgment is rendered the plaintiff seeks an order from the court (an execution in Connecticut) to garnish the defendant's bank account, accounts receivable, seize personal property for sale or lien real estate for foreclosure.

In the event that the defendant files a counterclaim against the plaintiff (the assignee not the original notary) the plaintiff will have to defend. It is questionable whether the defendant could do this because the plaintiff has not engaged in any conduct that would render him liable. The defendant would have to either file a sepoarate action against the original notary or try to join the original notary to the pending action as a codefendant or third party defendant.

In small claims cases attorney's are usually not involved because of the expense. The parties are free to hire attorney's, but most of the time do not. Small claims is set up for people to proceed without attorney's. It is not that different from what you see on tv on People's Court.

If the defendant has the ability to transfer the case to the superior court docket, the plaintiff will need an attorney.

Reply by BrendaTx on 6/16/06 10:53am
Msg #126320

Re: One of those cases where... Kevin...

This is very interesting!

I will be watching this thread this afternoon. Right now it's (:< time to go to work.

Reply by Becca_FL on 6/16/06 11:35am
Msg #126322

Very interesting, I agree.

Keep us all informed, please.

Reply by Anonymous on 6/16/06 9:08am
Msg #126309

UPDATE

Thank you for your responses. The comments were very good.

Sorry, I was imprecise in my original explanation. The notary buying the claims would not be acting as a notary but as a collection agent. This is similar to buying out trade claims and one can buy trade claims and pursue collection. You are not hiring a notary to act as an attorney, but now that this person owns the claim, he/she has the right to pursue collection and has agreed to payout by a formula based on the recovery. My father is a retired banker would did loan workouts. He has bought, sold and collected trade claims over the years as a side business. This no different. If the claim is small , you go to small claims court to pursue collection. Relatively cheap, quick and easy to do.

Granted if the plaintiff shows up and disputes the claim, original testimony is useful, but often as was pointed out deadbeats have little in the way of defense.

What I like about the notary network is that we are practically in every county in evey state in most major cities where the small claims court is located. Thus, we can pursue the deadbeat signing company with relative ease.

To file one claim might cost $50 to $200, but if you have a pool of 5 to 10 to pursue, they can be combined and it lowers the average collection cost. I love turning the tables on deadbeats.

Any nominations for deadbeat signing companies to pursue a test case?



As for negative repercussions, are you really worried about getting no more business from a signing company that has not paid you in the first place? You might not pursue some that owes for one signing, but if someone owes you for several and this board reflects they owe several other people, chances are you not going to business with them again even if they call you.

Reply by VA_Notary on 6/16/06 12:28pm
Msg #126328

Re: UPDATE

This is a wonderful idea. I hope every SA will be able to take advantage of this

Reply by MistarellaFL on 6/16/06 12:45pm
Msg #126335

Re: UPDATE

Although I see your point and think it's a great idea, in FL it is easy to
take an out of state company to small claims. I am not offereing leagal adcvice, but Ihave been advised that if they don't show up, you receive a judgement by default.

Reply by HisHughness on 6/18/06 1:17am
Msg #126610

Re: UPDATE

Although I was fortunate that my practice never entailed collections, it is my understanding that if Party A sues Party B over a transaction, Party B has the right to counterclaim >>in that lawsuit<<, for reasons of judicial economy, for any damages Party B alleges he sustained as a result of that transaction.

In the real world, I think any person would be short a couple of bristles on his hairbrush if he surrendered a claim to a third party, and then expected that third party -- who presumably would not be an attorney -- to protect his interests in the event of a counterclaim. Remember, if you can file a petition in small claims court without a lawyer, the defendant can likewise file an answer and counterclaim without a lawyer. And the defendant is present in that jurisdiction, thus having a major advantage in litigating both his defense and his counterclaim.

It is sheer folly to rely upon the hope that a businessperson would not respond to a lawsuit, and that you thus could take a default judgement. That's like sending a Boy Scout troop, instead of the Green Berets, to attack a banana republic in the hope that El Presidente won't send in his goons. The Scouts are probably going to find that they are quite unprepared, for once.

Reply by Anonymous on 6/18/06 11:25am
Msg #126652

Re: UPDATE

In my state, lawyers are not allowed in small claims court. I doubt that if you were honest in buying a claim that is the other party counter sued, a judge is going to give the other side anything. What did the 1st suing party do? Try to collect a debt. As long as that was a reasonable attempt, the other side does not have much to sue for. Sure they can try, but they will not likely prevail. Debt collectors in my state use small claims court all the time and would be subject to the same risk. It does not appear to be a big risk.