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[traveler505]

If I were Prosper, I would bring out a few test cases to see how judges reacted to the whole notion of "So you bought this loan from a group of 120 private investors on the Internet?  What is the Internet?"  Then, after having ascertained that I had ready answers to the easy questions and after I had figured out which courtrooms were likely to be favorable to me, I would scale the process up like debt collectors do for default judgements against CC delinquencies. 

"Next case."  "Hiya your honor, Doug Fuller from Prosper.  Cindy Smith defaulted on a loan for $5,000.  Here's the supporting documentation, same as last week really."  "Is Ms. Smith or her representative here?"  ... "Default judgement entered against Cindy Smith for $5,000.  Next."

How many judges are there in California?  What are the odds that more than one out of 66 cases appearing before the same judge?

I have no idea about California, but, in most states, the plaintiff doesn't get to pick the judge who hears a case.

[xraider]

Trav, in LA County there are more than 66 civil judges...  Some counties have one or two all purpose judges.

What happens in Cal. is that each party gets a chance to challenge a judge for any reason whatsoever, and you can also challenge a judge for actual prejudice.  In extreme cases, you can challenge an entire county's judges for cause.  Other than that, though, you don't get to choose your judges.

If there are many, many cases filed in one county, they'll likely be coordinated.   This is usually the massive tort litigation, like the asbestos litigation or priest molestation cases.

[sb92075]

>"Default judgement entered against Cindy Smith for $5,000.  Next."

Just curious,  how is a default judgement more valuable than a $5000 promisory note when Cindy Smith refuses to pay either?

[traveler505]

>"Default judgement entered against Cindy Smith for $5,000.  Next."

Just curious,  how is a default judgement more valuable than a $5000 promisory note when Cindy Smith refuses to pay either?

A judgment allows the plaintiff to take money/stuff from Cindy Smith (subject to state-by-state limits), rather than waiting for her to voluntarily pay.

[ira01]

>"Default judgement entered against Cindy Smith for $5,000.  Next."

Just curious,  how is a default judgement more valuable than a $5000 promisory note when Cindy Smith refuses to pay either?

A judgment allows the plaintiff to take money/stuff from Cindy Smith (subject to state-by-state limits), rather than waiting for her to voluntarily pay.

Yep.  With a judgment, Prosper could question the debtor under oath and ask her exactly where here assets are located (what bank do you use, do you own a car, collectables, where do you work, etc.), all under penalty of perjury.  And/or Prosper can essentially walk into the debtor's bank with a writ of execution and say "I'll take Ms. Smith's money, please."  Prosper could garnish her paycheck, so every payday a portion of it goes stright to Prosper.  If the debtor owns a business, Prosper could send the Sheriff in to the business for a "till tap" -- taking the cash right out of the cash register.  If the debtor owns a car with more than a certain amount of equity, Prosper can have it seized and sold. 

Once I had a case with a highly obnoxious litigant on the other side (who was also a lawyer, and was representing himself).  At one point, we won $1,750 in sanctions against him for some discovery dispute that he failed to pay.  For a couple months we just waited, so that every time we appeared before the judge we could point out that the guy was thumbing his nose at the judge's order by not paying us (he was a multi-millionaire, so obviously he just didn't feel like paying).  Then we decided we wanted the money (taking it uncooperatively pleased our client, who was really pissed).  So we had the necessary paperwork filed, and we had the Sheriff seize the money from the guy's bank account.  In a couple of months, we got our check from the Sheriff's Department.  It was sweet.   

[Mtnchick]

Here's one in Riverside, filed 2/25/08: http://public-access.riverside.courts.ca.gov/OpenAccess/CIVIL/civildetails.asp?casenumber=494584&courtcode=A&dsn=&casetype=RIC

One has been filed!  This is quite a landmark.

HELL HATH FROZEN OVER!

Am I reading this right that the next time it goes to court is in October??

[xraider]

And if Cindy Smith owns real property, you file an abstract of judgment in her county, and when she sells or refinances that property, you get paid off with interest at the legal rate (now 10%).  In the meantime, that sits and erodes her credit.

To MtnChick:  Riverside is incredibly backed up.  That's the next court date that's now set, but realistically, the dates will be moved up if the deadbeat answers.  If he doesn't respond, I would imagine that Prosper's lawyers will quickly submit default papers.  I don't remember whether he's been served yet, but he has 30 days to respond to the complaint once served (unless he gets an extension).  So, we should check the website in a couple of weeks.

[traveler505]

Here's one in Riverside, filed 2/25/08: http://public-access.riverside.courts.ca.gov/OpenAccess/CIVIL/civildetails.asp?casenumber=494584&courtcode=A&dsn=&casetype=RIC

One has been filed!  This is quite a landmark.

HELL HATH FROZEN OVER!

Am I reading this right that the next time it goes to court is in October??

xraider or ira01 could answer this better than I can, but it looks like that's a date that's automatically set when a case is filed so that if nothing else happens by then (i.e. Prosper doesn't actually serve the defendant), the case pops up on the judge's calendar as a candidate for dismissal.   

[xraider]

ok... went back to the court website.  That's an automatic place-holding date so if Prosper doesn't file a proof of service the case will be dismissed.  Note that it is a non-appearance date, meaning it is automatic.

The Riverside courts are backed up on civil cases but even so, I'm surprised the court is permitting so much time to file the proof of service!

[beerbud1]

One of the defendants is a gal by the name of Jodi Collins. I found her on E-bay. She is one of the defendants. I don't know what County she is in. I do know that she is one of the 66 cases.

[mhs505]

ok... went back to the court website.  That's an automatic place-holding date so if Prosper doesn't file a proof of service the case will be dismissed.  Note that it is a non-appearance date, meaning it is automatic.

The Riverside courts are backed up on civil cases but even so, I'm surprised the court is permitting so much time to file the proof of service!

The wheels of justice turn slowly, I guess.

[patio11]

With a judgment, Prosper could question the debtor under oath and ask her exactly where here assets are located (what bank do you use, do you own a car, collectables, where do you work, etc.), all under penalty of perjury. 

You can also just call up the banks in her neighborhood and say "I have a default judgement against the Cindy Smith living at 123 Main Street.  Ring any bells?"  I'm told it works a suprising amount of the time.  Then you just wait until the day after payday.

I watched this process happen once.  Not very fun for the targeted person, but it does tend to bring debts current in a hurry relative to the endless "call, get ignored, call, get ignored" cycle, especially from those who have the means to pay.  (If they don't, but they own property, you slap a lien on it and just wait a few years, and/or sell the lien to someone more patient than you for *substantially* more than pennies on the dollar.)

[ira01]

With a judgment, Prosper could question the debtor under oath and ask her exactly where here assets are located (what bank do you use, do you own a car, collectables, where do you work, etc.), all under penalty of perjury. 

You can also just call up the banks in her neighborhood and say "I have a default judgement against the Cindy Smith living at 123 Main Street.  Ring any bells?"  I'm told it works a suprising amount of the time.  Then you just wait until the day after payday.

I watched this process happen once.  Not very fun for the targeted person, but it does tend to bring debts current in a hurry relative to the endless "call, get ignored, call, get ignored" cycle, especially from those who have the means to pay.  (If they don't, but they own property, you slap a lien on it and just wait a few years, and/or sell the lien to someone more patient than you for *substantially* more than pennies on the dollar.)

A senior lawyer in my old firm told me that one of his first assignments as a new lawyer about 40 years ago was to question a debtor under oath at the courthouse.  He happened to notice that the debtor was (foolishly) wearing an expensive watch.  He got the Sheriff, and said "that's a nice watch -- hand it over."  Then he followed the debtor out to the courthouse parking lot, waited until the debtor opened his car door, and said "that's a nice car -- hand over the keys."   

[Rancidbeef]

I was listening to a call-in financial show on the radio a while back where a guy said had several judgements he'd give up on collecting.  So he filed a 1099 on them for the amount of the judgement.  Then they have to pay taxes on that amount or deal with the IRS.  That tactic won't get you the money, but it might make you feel better. 

[traveler505]

I was listening to a call-in financial show on the radio a while back where a guy said had several judgements he'd give up on collecting.  So he filed a 1099 on them for the amount of the judgement.  Then they have to pay taxes on that amount or deal with the IRS.  That tactic won't get you the money, but it might make you feel better. 

One doesn't need a judgment to do that; a 1099 can be issued for any debt that is forgiven by the creditor.  (Some creditors are required to issue them once a certain amount of time has passed without collection activity, even if the creditor doesn't intend to forgive the debt.)

Debtors who are insolvent don't have to pay taxes on the 1099 income though.