Whatchamacolumn: Pay or negotiate, but don't ignore small debts

More and more people overspend credit cards, fail to pay various personal debts and incur even greater financial losses from highly organized debt collection systems. Regularly published records, once limited to larger financial claims, now report lawsuits in the hundreds instead of thousands of dollars.

Professional debt collection operations flourished after they learned to mass-file small financial claims in circuit courts. They pay pennies on the dollar to buy debts owed to banks and other credit lenders, tack on collection fees and file lawsuits that often draw default judgments.

People lacking good legal advice can end up with court-adjudicated judgments including high legal costs, even on small original debts that may have been successfully challenged. Best advice: Don’t ignore small debts, thinking they will disappear on their own.

Debt collectors filing lawsuits in recent years include such names as Portfolio Recovery Associates and Absolute Resolutions Investments. The most prominent current debt litigator is LVNV Funding.

LVNV Funding is owned by Sherman Financial Group, which was founded by American billionaire Benjamin W. Navarro. Sherman also owns Credit One Bank, which provides credit cards to people with low credit scores; LVNV mostly purchases credit card debts written off by lenders.

A reminder: Your assets and personal credit rating can be at risk from a seemingly insignificant $500 credit card debt targeted by a major financial network of professional collectors.

Our Monday News-Register reported 11 lawsuits filed against local people by LVNV Funding, with claims ranging from $854 to $10,241. Claims in four lawsuits filed by other debt collectors ranged from $4,569 to $25,794. (Another set of debt-collection lawsuits is scheduled for publication in today’s N-R issue.)

That was just one week’s worth. And those Monday listings also included seven court judgments granted for debts ranging from $791 to $453,177. (OK, that last one wasn’t a small credit card default. It involved a Yamhill man who defaulted on payoff for a Komatsu PC650LC-11 hydraulic excavator with bucket, among other judgments in the past year.)

Back to LVNV Funding:

Many websites provide advice on how to fight claims by LVNV and other debt collectors. One of those is found at www.upsolve.org, a nonprofit group created to “help low-income and working-class families improve their financial situation through free online education, tools, and community … We also advocate for a more accessible financial and legal system.”

One page on the Upsolve website is titled, “How To Win Against LVNV Funding.”

Another source of information about fighting debt collection is www.SoloSuit.com, a self-help website that carefully notes it “is not an attorney or a law firm. Nor is it a substitute for an attorney or law firm. We do not provide legal advice nor do we practice law. This site only contains legal information, not legal advice … We provide no guarantee regarding case outcomes nor are we liable for any case outcomes.”

Getting actual legal advice is a good idea, and there even are law firms with a primary focus of helping people with claims by LVNV / Resurgent / Sherman.

Bottom line: Pay it off or negotiate a documented settlement, but don’t ignore those small-debt claims.

Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.