What is a Reasonable Offer to Settle a Very Small Debt
My question involves collection proceedings in the State of: Texas
First off, happy new year everyone! I hope that y'all are not involved in any sort of litigation like I am :p.
The situation is this: I owe someone $500 for some service, and due to a variety of reasons, I did not pay the guy until they sue me. Now, I do not contend the $500, and will be more than happy to settle it out of court, but now they want $2000, which is $500 + interest + lawyer fee ($1k) + court fees.
I have never been deeply involved in any lawsuit, but it doesn't take a PhD degree to realize that the offer is ridiculous, and I am trying to understand how these things work to offer a more reasonable amount. I have a few questions:
1. What is a typical lawyer fee to file some papers to the court? Is $1k reasonable? No court has been gone so far.
2. How likely is it for the Judge will award the plaintiff lawyer and court fees? My primary argument against that is (a) the plaintiff should have filed the charge with the Small Claims court instead, where court fee and lawyer fees would have been much lower, and (b) for the court to deter people from filing lawsuits of worthless amounts like $500.
3. How should I convince the plaintiff to accept my offer? My main communication with them is through their lawyer, and the lawyer's best interest is going to court to make more money, so I am not sure how to best phrase my argument.
4. Despite my writing English, I speak broken English. Is it possible to get a translator at the court, or inexpensively hire someone on-site?
Thank you everyone :D.
Re: Reasonable Offer to Settle a Very Small Debt
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1. What is a typical lawyer fee to file some papers to the court?
$300 or so per hour. And it's not just for filing papers. The lawyer has to spend time with the client, review the case, review the law, prepare the case, travel back and forth to the court, pay the court fees and process service fees, appear in court, have additional visits with the client, enforce the judgment.
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Is $1k reasonable?
That's about 3 hours of the lawyer's time. Yeah, it's reasonable.
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No court has been gone so far.
You mean that you haven't been served with a lawsuit just threatened with a lawsuit?
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2. How likely is it for the Judge will award the plaintiff lawyer and court fees?
Depends. What was the service about? Was there a written contract or agreement? What did it say about attorney fees?
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My primary argument against that is (a) the plaintiff should have filed the charge with the Small Claims court instead, where court fee and lawyer fees would have been much lower, and (b) for the court to deter people from filing lawsuits of worthless amounts like $500.
Both those points are BS. You know what BS means, don't you?
You defaulted on the debt, breached the agreement to repay, you're the bad guy, your arguments about how somebody should sue you are irrelevant.
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3. How should I convince the plaintiff to accept my offer? My main communication with them is through their lawyer, and the lawyer's best interest is going to court to make more money, so I am not sure how to best phrase my argument.
You don't have an "argument." You have a "debt." How you phrase it might go something like this: "Sir, I don't want to pay you $2000. I offer to pay you $________ to settle the debt and you give me a written agreement that the amount is a full and final settlement when I bring you the money. You cannot garnish my wages in Texas so I suggest you accept my offer and get this over with."
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4. Despite my writing English, I speak broken English. Is it possible to get a translator at the court, or inexpensively hire someone on-site?
If you get sued you can ask for a translator. If you don't get sued you are free to hire one. I don't know how much they cost.
Re: What is a Reasonable Offer to Settle a Very Small Debt
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nirty28
2. How likely is it for the Judge will award the plaintiff lawyer and court fees? My primary argument against that is (a) the plaintiff should have filed the charge with the Small Claims court instead, where court fee and lawyer fees would have been much lower, and (b) for the court to deter people from filing lawsuits of worthless amounts like $500.
The rule in Texas is not like most other states. In most states, in a contract lawsuit, each side pays its own attorney’s fees unless the contract says the loser pays the winner’s legal fees. But in Texas, it is the reverse. So in Texas, unless the contract says otherwise, if you lose a contract dispute the court is likely to award the winner its reasonable attorney’s fees. Note that the argument that plaintiff should have chosen a different forum won’t fly — it is the right of the plaintiff to choose the forum.
Re: What is a Reasonable Offer to Settle a Very Small Debt
Hi both, thanks for the information and advice, I really appreciate it! :D
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adjusterjack
Depends. What was the service about? Was there a written contract or agreement? What did it say about attorney fees?
It was a physician visit. I was unhappy with the treatment (both in medical and social sense) and then got slapped with a bill a few weeks later.
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adjusterjack
Both those points are BS. You know what BS means, don't you?
You defaulted on the debt, breached the agreement to repay, you're the bad guy, your arguments about how somebody should sue you are irrelevant.
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Taxing Matters
The rule in Texas is not like most other states. In most states, in a contract lawsuit, each side pays its own attorney’s fees unless the contract says the loser pays the winner’s legal fees. But in Texas, it is the reverse. So in Texas, unless the contract says otherwise, if you lose a contract dispute the court is likely to award the winner its reasonable attorney’s fees. Note that the argument that plaintiff should have chosen a different forum won’t fly — it is the right of the plaintiff to choose the forum.
Then my question is what prevents people from filing lawsuits, for punitive amounts, and without prior notice? If the defendants have to shoulder the lawyer fee and court fees wholesale, there is absolutely no check against plaintiffs overloading the court with trivial lawsuits. In fact, lawyers would be encouraging people to file trivial lawsuits so that they can make reasonable lawyer fee. I don't see cable companies or landlords filing lawsuits left and right so I assume there is something in the system which makes it not in their best interest, economically, to not to.
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adjusterjack
You don't have an "argument." You have a "debt." How you phrase it might go something like this: "Sir, I don't want to pay you $2000. I offer to pay you $________ to settle the debt and you give me a written agreement that the amount is a full and final settlement when I bring you the money. You cannot garnish my wages in Texas so I suggest you accept my offer and get this over with."
What are the consequences of losing in the court and not paying though? Can the court issue an injunction on my bank account? While I am a poor student, it's not like I cannot pay $2k, but it is large amount, compared to the original $500, and I'd rather not default on my apartment rents :p.
Re: What is a Reasonable Offer to Settle a Very Small Debt
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nirty28
What are the consequences of losing in the court and not paying though? Can the court issue an injunction on my bank account? While I am a poor student, it's not like I cannot pay $2k, but it is large amount, compared to the original $500, and I'd rather not default on my apartment rents :p.
Yes, collection actions can include levying your bank account. (seizing the money from your bank account).
Re: What is a Reasonable Offer to Settle a Very Small Debt
It often happens that many (not just yours) collection cases are given to an attorney for collection at one time. They don't look at your case as an individual case where they would treat you any differently than all the rest. They just file the complaints. Now you are stuck.
Re: What is a Reasonable Offer to Settle a Very Small Debt
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Taxing Matters
The rule in Texas is not like most other states. In most states, in a contract lawsuit, each side pays its own attorney’s fees unless the contract says the loser pays the winner’s legal fees. But in Texas, it is the reverse. So in Texas, unless the contract says otherwise, if you lose a contract dispute the court is likely to award the winner its reasonable attorney’s fees.
I thought that was the case but couldn't find an authority for it. Could you please cite one so I can add it to my reference material? Thanks.
Re: What is a Reasonable Offer to Settle a Very Small Debt
Part of the problem is that you admit you received the service AND that you owe the original $500, regardless of the quality of the service. Instead of paying it, you now have the consequences (that they get to decide) for you not paying the debt owed on time.
I do collections at times on small amounts (less than $150) and will tell you that it takes more time than one might think administratively to have all the ducks in row to pursue. And if it is sent to an outside attorney or collection house, that pretty much can easily double the debt at least.
Honestly I don't see how it is possible that you will win any lawsuit and yes, it will rack up more interest and attorney fees. So while you can offer a lower amount, in the end they can continue on the path and possibly get more than $2k.
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nirty28
It was a physician visit. I was unhappy with the treatment (both in medical and social sense) and then got slapped with a bill a few weeks later.
Common mistake. Don't like the service, don't pay the bill. All that gets you is an even bigger bill when you get sued.
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nirty28
Then my question is what prevents people from filing lawsuits, for punitive amounts, and without prior notice? If the defendants have to shoulder the lawyer fee and court fees wholesale, there is absolutely no check against plaintiffs overloading the court with trivial lawsuits. In fact, lawyers would be encouraging people to file trivial lawsuits so that they can make reasonable lawyer fee. I don't see cable companies or landlords filing lawsuits left and right so I assume there is something in the system which makes it not in their best interest, economically, to not to.
You assume correctly. A person filing a frivolous lawsuit can be sanctioned by the court with monetary penalties.
However, there is nothing frivolous about a lawsuit against you for a debt that you agreed to pay when you were treated by the physicial.
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nirty28
What are the consequences of losing in the court and not paying though? Can the court issue an injunction on my bank account? While I am a poor student, it's not like I cannot pay $2k, but it is large amount, compared to the original $500, and I'd rather not default on my apartment rents
The consequences are that the bill could be even higher when there is a judgment against you as the attorney will incur additional costs to enforce the judgment and those costs get added to the amount of the judgment.
The judgment also goes on your credit reports for a long time and that certainly doesn't do you any good.
Bottom line, you owe the money. If you have the cash you would be wise to make a settlement offer and see how it goes.
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adjusterjack
I thought that was the case but couldn't find an authority for it. Could you please cite one so I can add it to my reference material? Thanks.
Texas Civil Practice and Remedies Code 38.001:
Sec. 38.001. RECOVERY OF ATTORNEY'S FEES. A person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:
(1) rendered services;
(2) performed labor;
(3) furnished material;
(4) freight or express overcharges;
(5) lost or damaged freight or express;
(6) killed or injured stock;
(7) a sworn account; or
(8) an oral or written contract.