What would Happen if Everybody Defended Debt Lawsuits?

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Sometimes people ask me what would happen if everybody defended against the debt collectors. Would they fix things and be able to move back to business as usual without a second’s pause? Would the courts let it happen? And what would happen?

A Matter of Scale

To answer this question, consider the scale – first we’ll talk about the national scale, but then we’ll
bring it down to one member’s recent experience, an experience I had many, many times while I was representing people in this type of case.

On the national scale, it isn’t clear exactly how many of these suits are being brought. But there is over a trillion dollars of consumer debt out there, and a lot of it is “troubled.” And that doesn’t even count duplicates or old debt. We’re talking about a gigantic business here. You can see that by the fact that on any given day in St. Louis County – in the middle of Middle America – there are several thousand debt cases pending. That’s one small county in a mid-sized state.

How it actually works

You know that debt collectors buy huge amounts of debt at a time for small amounts of money. They ship them out for collection. The collectors either bug you for the money or just bring suit – they can do either one. They file – I’m guessing here – over a million suits per year, maybe many millions.

They file them in every magistrate court, small claims court, district court… all over the country.

In St. Louis County (which doesn’t include the city), there are ten courts that receive the bulk of these
cases, and it is not unusual to see 400 cases set for one hour of one day in ONE court. I’ve been there on days where there were 800 cases set for hearing. In one court, at the same hour.

One Member’s Experience

Now to discuss a member’s recent experience. He said there were 400 cases in the court his case was set in. He sat there for an hour while ALL of them “went away.”

In other words, the people being sued all either gave up to the lawyer (out in the hall, so the plaintiff related that the case had been “settled”) or the judge, or by default. Of the 400 cases set that day, ONLY ONE person chose to defend. That was our member.

What if People Defended?

Now consider that court again. It handled almost 400 cases in a little over an hour – and then it went
on to other business. What if all 400 people had said “No” and opted to defend themselves?

That would mean that the court would have to set 400 hearings and listen to the arguments one at a time. If they went to trial, it would have to set 400 cases and spend, at a minimum, two hours on each one – a hundred long days.

In ONE HOUR, the court would find itself half a year behind schedule.

Or consider the ten lawyers who handled those cases. Suppose that, instead of giving up, everybody
engaged in debt defense. They asked for discovery, haggled over objections, demanded real proof
of their supposed debts.  In one hour, those ten lawyers would be a full year behind schedule. Instead of collecting $500,000 in judgments in an hour and shuffling those off to the machine to collect, they’d have to work a year for whatever judgments they got.

And they wouldn’t get nearly as many, either. Do you think they could keep doing that?

The System Would Simply Collapse

All over the country, the debt collection business would bog down and come to a screeching halt – the courts would have a backlog of cases two and a half years long after just one week.

I don’t think anyone knows what would happen after that.

If people being sued by debt collectors could just realize it, they’d see that they own the system. It all depends on everybody giving up. Stop giving up, and the debt business collapses. Every defense increases the burden on the system.

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