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Comment by netcan | Hacker News Reader

This isn't a case where a guy didn't pay his builder and then no-shows at court.

These are debts sold at >10% of face, often smallish debts that have accrued massive interest. Some agencies specialise in persistent calling. Some specialise in deal-making. Some specialise in legal proceedings. These are the ones we are talking about.

To work, they need to keep legal costs low. They often don't bother to have a case, because they're happy to win just the no shows. That's the formula. Buy 100 notes. Take them to court. 80 or so will no show. You can then try to seize the their assets. The whole thing is premised on the fact that these defendants don't open their mail. Either side making a case to a judge is rare.

It's a misuse of the legal system, and the court shouldn't allow it.

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Most states now have laws against debt collection harassment and have caps on debt collection interest and fees.

There has to be proof in court that a debtor was served papers to get a judgment. There's a term called 'sewer service' where some shady collectors try to fake this service. If you get lucky your debt collector might try this on you, it's a great way to get debt wiped clean by a very angry judge.

unless the debtor has the cash ready to pay, most debtors never, ever respond (and shouldn't) to any actions to collect debt by a third-party collector, so that there is no chance at the even tiniest appearance of acknowledgement.

often, even if you have the intent to pay the debt, paying to any agency other than the originator of the debt is risky. debt collectors roll over debt en masse to keep them legally fresh and will not honor any promises that haven't been duly signed and served.

Contact from a third party collector? Sure, don't respond. But if you're being summoned by the court under threat of a default judgment then you should probably show up or don't be surprised about the outcome.

for sure, respond to the court.

you can often find low-cost, non-profit defense organizations to help if needed.

> To work, they need to keep legal costs low.

But they will absolutely try to claim 4-6 hours of legal work at $275/hr, for mail merging a Word document to send you.

> It's a misuse of the legal system, and the court shouldn't allow it.

I really don't see how.

They file a case. They present an argument. The other side doesn't. What should the court do? Keep asking the other side to bother to show up? If they did that you could block any claim forever by just not showing up. That's not justice.

Our whole society's legal basis is 'show up and present your case and have it judged'. It's called the 'adversarial system' - look it up.

If it's a genuine debt, and it sounds like it is, then either pay up or argue your case in court.

I'm not thinking about this as an individual case, or debating an individual case.

I'm talking about a business model whereby an agency systematically buys "no show debt" at a tiny fraction of face and mass produces personal bankruptcy. As the article shows. This business model (subsidised by the state, which provides the court), in 2020, is civil law.

That business model is not something the courts should play ball with. Lawyers and judges will stay within the legal rules.

In any case, I think there needs to be a debt regulator...

You can't address the business model if you can't explain how you would change how an individual case plays out.

The standard of evidence in civil court is "the preponderance of the evidence". Would you propose changing that standard, so that a debt collector's unchallenged word isn't good enough to prove their case? What exactly do you propose to do about the fact that most people default?

Should we make participation in civil cases mandatory and issue bench warrant when defendants fail to appear? Should we reduce how much income can be garnished so that garnishment is effectively useless? Should we require that every update in the case be personally served by a process server?

The business model would collapse overnight if debtors began challenging creditor plaintiffs en masse. I don't see how the failure of a defendant who has been properly served to defend their case reflects a systematic failure on the part of the courts or the law.

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