When you are sued by Portfolio Recovery Associates, part of the anxiety stems from the fact that they are scary-big, and you are scared and little. Take heart, because Portfolio Recovery Associates’s very bigness might be your best weapon. To understand why — and how to take advantage of it — you’ll have to stick by me for a minute, while I lay the groundwork.
According to the law, an attorney should be meaningfully involved in every lawsuit brought by a debt collector. This is true even if the you have been sued by Portfolio Recovery Associates (or some other a scary-big parasitic debt buyer such as Midland Funding or CACH). The law requires meaningful attorney involvement in order to prevent debt collectors from suing the wrong people, to prevent them from bringing lawsuits without having proof to back up their claims, from filing lawsuits on time-barred claims, and generally from forcing courts to oversee a bunch of cases that should not have been brought in the first place.
I know what you’re thinking: Debt collectors do EXACTLY all those bad things, so where’s the supposed benefit from all of this supposed meaningful attorney involvement? And when I get sued by Portfolio Recovery Services, how does its scary-bigness help me aikido my way out of the lawsuit?
Well, first, as you might gather from my post lamenting about debt collection attorneys, there ain’t no such meaningful involvement going on in these cases (in spite of the requirement). As to how you how you can benefit from this flaunting of the law by big debt collection companies (and their attorneys), I promise to tell you before the end of this article, but first it’s useful to know why they ignore the law.
Meaningful attorney involvement is expensive. Especially when you are sued by Portfolio Recovery Associates or Midland Funding or another company that has become accustomed to treating the courts as automated components of their accounts receivables departments. If proper procedures were followed, such debt collectors would only be able to file a lawsuit if a significant amount of money was at stake. The economic principal of “marginal cost” dictates that when the price of making one more product (or in this case the price of filing one more lawsuit) is not sufficiently offset by a return on that investment, then production stops (i.e., the next lawsuit will not be filed). The debt collection industry has found a way around the expense of having qualified and ethical attorneys vet their cases. For years, banks and junk debt buyers have exclusively hired debt collection attorneys who are willing to ignore their legal and ethical obligations to sign-off on thousands of cases per month, without scrutiny.
Thus, the practice of litigation mills has become prevalent, populated by a handful of attorneys willing to ignore their ethical obligations along with a multitude of low-wage employees working under sweatshop conditions to sign or stamp their attorney-bosses’ names as many times per day as possible on documents that they neither read nor understand. When you are sued by Portfolio Recovery Associates or a similar company, you might well imagine the attorney on the other side as being like Charlie Chaplin working on the assembly line in the movie “Modern Times” (or maybe the guy pictured here). These litigation mill tactics virtually eliminate the marginal cost for filing additional lawsuits. Unethical collection attorneys have ripped a giant hole into the court system, through which debt collectors can pour an unlimited number of lawsuits.
No longer does the number of lawsuits processed by the courts bear any proportion to the number of attorneys practicing before the courts. Consequently, overburdened court clerks must rely heavily upon the say-so of the very attorneys who are enabling the improper mass filings (it is not for nothing that attorneys are dubbed “officers of the court”). Collection attorneys are practically allowed to issue their own judgments (“fill out an application for default judgment, and you shall receive a default judgment,” has become the unofficial policy of many court clerks). I know, if you are one of the people who has just been sued by Portfolio Recovery Associates, none of this sounds very reassuring. Don’t worry, we’ll get to the reassuring part in the final paragraph.
If collection attorneys followed the law, they would need a reasonable basis for every lawsuit they filed, and meaningful involvement and oversight would be required by the attorney whose name appears on the court filings. If courts followed the law, they would not perceive a duty to rubber-stamp applications for default judgment, but would instead call to task those attorneys (and their clients) who quite clearly are running litigation mills. As things stand, the legitimacy of the courts and of the legal profession are almost as severely tarnished as that of the collection industry.
All of this is terrible. But if you are one of people who has been sued by Portfolio Recovery Associates (or sued by Midland Funding or one of a myriad other such debt buyers), there is an important strategic takeaway from all of this. Specifically, because debt collection lawsuits are rubber-stamped by the attorneys that file them, it turns out that such collection attorneys file far, far more of these lawsuits than they could ever handle. It’s all fine and good for Portfolio Recovery Associates and its attorneys, as long as consumers throw their hands up in frustration and say “I can’t win, so why bother.” But if you do “bother” it is very often the junk debt buyer who can’t win. Debt buyers do not have the bandwidth to address very many contested cases. They are going for the low-hanging fruit. Don’t be the low hanging fruit. Hire an attorney if you can. But whether you hire an attorney or represent yourself, contest the case. It’s not hopeless.