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Brandon M.
Brandon M., Counselor at Law
Category: Legal
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Experience:  Attorney experienced in numerous areas of law.
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I am co-owner of a trash business. Four years ago we sent a

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I am co-owner of a trash business. Four years ago we sent a customer to collections for non payment on bill. She was/is the girl friend to the person who is the main name on the account but she was listed as the contact person. They paid 2 prior collection bills but failed to pay the last bill for $265. She is now taking me/company to small claims court for $5,000 stating that we reported incorrectly, she was never on the account, prevented her from getting a checking account and kept her from closing on a home?

What are my rights as a business? We feel she owes us & not the other way around. Our collection procedure is that we attempt to call, her phones were disconnected; send notices of bill and arrearages, send letters notifying we will send to collections, then send them to collection if no response.

The account manager at the collection agency stated that she spoke with person/client on the phone & client said she had paid and would send collection company cancelled checks. She never did send in receipts to the collection company so they reported her to the credit agencies. We had heard nothing from the clients since March/April 2009. She called our office June 2013 ranting & raving about being sent to collections...I asked her to calm down & we could discuss this but she continued threatening law suit etc so I hung up the phone while asking her to call back when she calmed down.

Then July 12 we were served summons for court for July 24, 2013. Should we get an attorney to represent us? We feel she owes the collection company not us owing her.
Submitted: 1 year ago.
Category: Legal
Expert:  Brandon M. replied 1 year ago.
Hello there:

Thank you for your questions. You had several, so please allow me to address of the general legal principles in the order that they presented.

I should start by saying that because the nuances of every situation are different, this information should not be construed as complete or advice without consulting in person with counsel. For example, I can say with certainty that there may be additional legal theories to defend your case, for example, but there is simply no way to intelligently discuss those theories without consulting in person and being able to view the documents.

That said, You described a situation where a woman is a "customer", but also as "the contact person" for the main person on the account. Whether or not the woman is actually a customer is important. A service is being provided, and the contracting party is going to be liable for those services received, and anyone else is typically not going to be liable for the debt unless they are also a party to the service agreement. So if you have two adults living in a house together, and one of those adults is your customer and the other just the boyfriend/girlfriend "contact" of the customer, the "contact" is normally not going to be responsible for the bill because the contact will generally not be considered a contracting party.

So that said, if both parties are contracting parties, there would typically be no case. That may answer your question right there.

If you send someone into collections who is not a customer, then there would typically be liability because sharing a home with a debtor or being their contact person for a debtor does not make them responsible for a debt. Any foreseeable damages caused by sending such a person into collections would generally be the responsibility of the business that was responsible.

However, even then, it's not that simple for the plaintiff. Even if the defendant wrongfully sends the plaintiff into collections, and even if foreseeable damages result, the plaintiff is responsible for mitigating the damages. In the case of an action that adversely affects one's credit score, this means doing things like providing documentation of payment if payment was made, or challenging the debt with the three major credit bureaus. In other words, a person can't just sit back and let the damages accumulate, then sue for the damages when something could have been done to minimize or eliminate them.

Finally, the burden of proof falls on the plaintiff. This means that the plaintiff must show that any damages are, in fact, the foreseeable result of negligent act. Typically, a 4 year old bill sent to collections will still appear on someone's credit score, but it will only impact the credit score by a few points. Depending on the dollar amount, it might typically lower a person's credit score by only 10-30 points. 10 points would typically be insignificant. 30 points is more likely to be significant, but if it lowers the plaintiff's credit score from 600 to 570, it really wouldn't matter either way because no bank in the country would give her a home loan with a score of 600. So when someone is suing for damages due to bad credit, they need to demonstrate what the actual effect was on their credit score, and that it made a difference.

Your final question was whether you should get an attorney to represent you. Over $5,000, I would definitely recommend that you at least consult in person with an attorney to help you draft a response and examine all possible legal theories. Whether it is economical to hire that attorney for full representation is a determination that you can make after you have had a chance to meet in person. It's entirely possible that you will decide that you can handle the matter on your own or that it doesn't make economic sense (e.g. it might cost you $3,000 to hire the attorney, and the attorney thinks she would actually be entitled to $2,000).
Brandon M., Counselor at Law
Category: Legal
Satisfied Customers: 12237
Experience: Attorney experienced in numerous areas of law.
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Customer: replied 1 year ago.

Hi Brandon


 


I guess she was more than girl friend/roommate because she ordered service & also would call to get the container (commercial construction dumpster portion of the bill) emptied. I believe her name was on some of the checks that paid for service as well. We also had sent them to collections two previous times in 2007 & 2008 which they paid before it was reported to the credit agency by collection company. The collection account person spoke to her & client said she had paid & would provide receipts or cancelled checks. Client did not provide cancelled checks or receipts to collection agency. This has been over 4 years ago. Hopefully my company will prevail at small claims court as we have not been paid outstanding $265.00 plus this new fee & time?

Expert:  Brandon M. replied 1 year ago.
Hopefully, yes. But if you are asking me to predict the outcome, consider that I have only one piece of one half of a story involving people I have not met and a civil complaint that I have not read. It would be difficult to responsibly predict an outcome under those circumstances, and you would probably be ill-advised to rely on a prediction even if I did. That said, the plaintiff carries the burden of proof--hypothetically, a defendant can sit back and do nothing and still win if the plaintiff does not prove her case. So although there may be several legal theories for the plaintiff losing her case, consider also that it is her burden to prove liability and damages.

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