Judge Awarded Higbee & Associates $48,000 for Use of 1 Photo!!!

[Matthew Chan]

I understand where you are coming from and your assessment is correct for a big segment of society. Without getting into a long discussion of how certain segments of socio-economic-cultural-educational circles conduct their lives, I can assure you that "bad credit" is normal and a way of life for large chunks of society.  It really isn't that big an issue for them. It is inconvenient but not catastrophic. Sadly, it is a natural way of life for them.

I personally dealt with those types of people for many years and I was amazed how people exist and get by. I removed myself with such clientele because I could not stomach it anymore but I know people who still do business in those circles. I continue to get schooled by new stories and techniques of how people get by in society with no computer at home, shit credit, no checking, no education, no checking account, etc.  But they have a smart phone. :-)

They could care less about any judgments because they have learned on the streets most judgments (default or not) don't impact them much. If it did, they wouldn't continue to indulge in such behavior.

As I have repeatedly stated in these forums, go have an honest talk with someone inside most collection agencies. There is a HIGH ratio of uncollectibles that exist and it is their full-time job and business to collect.  Collection agencies stay in business because "assets" (receivables/judgments/debts/claims) are freely given to them to work. Major financial companies sell their receivables, debts, and paper for pennies on the dollar just so they get "something" besides a total loss.

People who don't want to pay find ways of being evasive. Sure, there are occasional victories but it requires too much time and resources to collect. Unfortunately, I have learned the hard way.  And even lawyers who are in the business, have their limits of how much energy they will spend pursuing certain folks.

And your points of "fight then fight" or "settle then settle". Sheer avoidance IS a form of fighting! It is a fight on THEIR terms which is "catch me if you can". Like all fights, there are winners and losers. Some do it better than others.

The way I see it is, it always comes down to how hard someone is willing to avoid. Their socio-economic-cultural-educational background is very determinant on how it all goes down.

Regarding liquidating assets, what do you consider assets from ordinary people?  Their furniture, used clothes, big screen TVs, computer, cell phones, musical industries, toiletries, supplies?  Most "assets" are very low value or nearly worthless.  Any pawn shop will quickly educate anyone what the true market value of such items are worth.

Meaningful assets might include artwork, high-end furniture, real estate, business inventory, a brick-and-mortar business, bank accounts, etc.  But a very determined and knowledgeable person could place many of those types of assets within other legal entities or people they trust.  So, on paper, they look like they have few assets.

And retirement accounts and many trusts are nearly untouchable. There are very savvy high net worth people who aren't going to let all their assets be in their name and be exposed to just anyone easily collect from them. They could have a network and web of smaller entities, accounts, trusts, trusted individuals, etc. Divorce lawyers are a group to turn to get stories of high-class avoidance strategies because they have to sniff them out from spouses who don't want to disclose ALL the assets they have.

Both low-class and high-class avoidance strategies are alive and hidden in plain sight. In some circles, they are called "asset protection strategies" and they are taught by many lawyers! I know because I have taken some seminars over the years on such topics.  Very practical and good to know if you ask me.

I have considered writing and publishing about such topics for the affluent audience. Lots of people who fear the loss of acquired assets so I think there is a big, underground interest in such topics.

If the judgments are against individuals (as opposed to companies) then there is a higher likelihood of collectability because you can't just "walk away" without doing some serious damage to your personal credit. If you have any assets they will just be liquidated to pay off creditors in bankruptcy, so it might make more sense to scrape up the money and try and settle it rather than nuking your credit for the foreseeable future. Judgments resulting from intentional torts generally cannot be discharged in bankruptcy anyway, and I am willing to bet that Higbee argues that these are "intentional" infringements when applying for the default judgment.

My point is, if you are going to fight then fight, if you are going to settle then settle. If you do get sued, then ignoring the problem and getting hit with a default judgment is usually the worst thing you can do.

[A Lawyer]

Many of the principals/owners of those legal entities will likely abandon their legal entity. It ends up being a paper judgment against a paper legal entity. Whether it becomes anything more remains to be seen.

Ok, I'll bite. I clicked on each of the judgments listed on Higbee's website and this is what I found:

Alex Wild $15,000 judgment - Against a corporation.

Chris Sadowski $30,000 judgment - Against an individual.

Michael Grecco $45,000 judgment - Against an individual.

Michael Grecco $60,000 judgment - Against an LLC. I posted about this earlier this year but now that I look into what Higbee posted on his website, it is a lot more interesting. Higbee didn't actually post a judgment, but he posted a court order denying defendant's motion to set aside the default judgment which had already been entered. Looks like after the default judgment was entered, the defendant tried to challenge it and get it set aside. The judge really chided the defendant and its attorney:

Defendant concedes it received actual notice of the filing of the action, and the record indicates that Defendant intentionally failed to answer. Defendant offers no reason, much less good cause, why Defendant did not answer or respond to a motion for default judgment when it knew such a motion was pending. In light of the Defendant’s silence on these key issues, the record indicates that Defendant waited to see how the Court would rule on Plaintiff’s motion for default judgment before Defendant decided to appear in this action. Then, only because the Court’s judgment was not in Defendant’s favor, Defendant decided to respond to Plaintiff and appear in this action months after its answer was due. In doing so, Defendant undermined the adversarial process and has attempted to take advantage of Plaintiff.

I posted a while ago on this one, but it appears that the Defendant ponied up the money and paid off the judgment after Higbee attempted to collect.

Sadowski $50,000 judgement - Against a corporation

So of the five judgments, two are against corporations, two are against individuals, and one was against an LLC and was apparently collected after a failed attempt to get it set aside.

My point in making these posts is that I feel like a lot of the opinions on here promote a laissez-faire attitude toward getting sued or having a default judgment entered. The best course of action is always to deal with it (whether that means to fight or pay) rather than sit back and assume that you can just deal with it after the fact. You can't just "walk away" from a judgment against you individually. You would have to file bankruptcy (and nuke your credit), and liquidate most of your assets to pay your creditors (including the judgment you are attempting to avoid by filing bankruptcy in the first place).

[Matthew Chan]

You did a good job on taking on the analysis. Thanks for that. Very helpful.

I am NOT take a laissez-fair attitude about this. I am also not encouraging people to disregard claims or just let a judgment happen.  In 2008-2010, there were all kinds of people doing "strategic defaults" on mortgages. They were "passive" financial moves that people engaged in. They didn't fight or negotiate. They simply accepted the fact that they were willing to take a credit hit. Nearly all bad credit drops off after 7 years but most people don't know that.

We can argue the moral issues and the collateral damage all day long. My point is that people did it. It was a calculated risk many people took to get out from underwater homes.

I am not saying there are not negative consequences or collateral damage to taking a less-than-ideal path. I am saying there are weighted decisions involved.

I have seen and had discussions with a variety of people who are in bad credit, bankruptcy, student loans, mortgage loan modifications, foreclosures, evictions, IRS troubles, lawsuits, etc. situations over the years who are in very tough positions. People somehow find their way to me because they want to hear my "alternative insights" which I am often known for. I don't seek them out. People share all kinds of very personal financial and business information and situations with me. And over the years I have had a lot of information and insights told to me by professionals that they would never tell the general public. That is a fact. I accept credible information and insights no matter where it comes from and I disseminate it as fairly and responsibly as I can.  People can decide from themselves what to do.

I once told a woman that she will likely have to depend on a spouse or someone else for the rest of their lives because of their large unpaid student loans and their credit will be "bad" for the rest of their lives.  So does one spend a lifetime trying to pay off $90,000 student loan to have "good credit"? Or direct that $90,000 towards something else? I am not the morality police.  Very tough decision. It is easy to tell someone to do the "right thing" and pay the student loan off. For most people, doing it ain't quite so easy.

One thing I do know is that most people don't suddenly go live under a bridge and have nothing left in their names. People have very sharp and aggressive self-preservation instincts. People "self-preserve" in different ways. All kinds of unusual tactics and strategies are used in the name of self-preservation. That is a fact. Some deal with it head on, others prefer avoidance and the "catch me if you can" approach. 

I am simply making counter-points based on what I have seen. People have to make tough decisions for themselves.  It is easy for me to jump in agree with you. But I have seen life is not quite so simple for many people. 

As I have said before, we have a diverse group of folks on the ELI Forums. Every reader can decide for themselves what is best for them. It doesn't affect me one way or another. I just like to offer a smorgasbord of options to people to consider. Not just one way to resolve things.

So of the five judgments, two are against corporations, two are against individuals, and one was against an LLC and was apparently collected after a failed attempt to get it set aside.

My point in making these posts is that I feel like a lot of the opinions on here promote a laissez-faire attitude toward getting sued or having a default judgment entered. The best course of action is always to deal with it (whether that means to fight or pay) rather than sit back and assume that you can just deal with it after the fact. You can't just "walk away" from a judgment against you individually. You would have to file bankruptcy (and nuke your credit), and liquidate most of your assets to pay your creditors (including the judgment you are attempting to avoid by filing bankruptcy in the first place).