Why We Sue Debt Collectors, And THEN Negotiate….

Why We Sue Debt Collectors, And THEN Negotiate…

Sue First, Then Talk?

debt collectorsIt sometimes sounds odd to people that we won’t negotiate with debt collectors who have broken the law until after we sue them.

Sometimes people (including judges) say “Did you talk to them first?  Did you send the collection agency a demand letter before suing?”


Here’s why:

  • Collection agencies sue lawyers who negotiate first.
  • Defense attorneys accuse us of being “mafia attorneys” and have threatened to sue us under the RICO law which is a law to bring mobsters down.
  • It just wastes time and doesn’t work.

Debt Collectors/Agencies Have Decided To Sue Consumer Lawyers Who Negotiate Before Suing.

There are some consumer firms that do not file lawsuits but instead sign up clients and then send demand letters to collection agencies who have allegedly broken the law.

Collection agencies don’t like this so at seminars they decided to start suing consumer lawyers who try to settle before suing.  The idea, bogus as it is, is that a lawyer sending a demand letter is “interfering with the business relationship” (a tort) between the collection agency and the consumer.

So the debt collector sues the lawyer in the hometown of the collection agency to intimidate lawyers into not “tangling” with certain collection agencies.

This is ridiculous and bogus and the ultimate type of frivolous lawsuit.  But rather than waste our time with this type of non sense, we choose to let our lawsuit be our initial demand letter.  This doesn’t stop the righteous indignation of defense attorneys — they still threaten us.

But what can they say?

Some geniuses here in Birmingham, Alabama, came up with the idea that Stan Herring and I are, basically, the mafia….

We Have Been Threatened By Birmingham, Alabama, Attorneys Who Claim They Will Sue Us Under Mafia Busting Laws.

Here’s the theory.  It is stupid and betrays a lack of any common sense but I’ll lay it out as it was presented to me when I was threatened with it.

“You guys sue companies.”

“The companies sometimes settle with you.”

“When the companies settle with you, then you agree to drop the lawsuit [dismiss the case].”

“Therefore, you are extorting these innocent mortgage companies like Bank of America, Wells Fargo, and the debt collectors.”

“We’ve been tracking you and we have been talking to these innocent companies that you sue about fighting back against you.”

Where to start?

Of course we sue companies.

Companies that know they are guilty settle with us.  If they deny doing anything wrong, we tell them not to pay.  I had a guy in Atlanta telling me his company did nothing wrong when it disclosed personal information (social security number, date of birth, etc) of my client in a public manner.  I mentioned he should fight us and not pay.

But companies pay.

And the agreement is that if they pay, we drop the case.

We honor our commitment.

So these Alabama lawyers think they have stumbled upon some deep dark secret and have threatened to sue us under RICO which is the law used to fight mafia people.

Imagine what these guys would think if we asked companies to pay money before suing them?  They would absolutely lose it….

Have a complete come apart!

So we sue first and then talk if the company wants to talk.  You see, if the company (debt collector, mortgage company, etc) knows you are serious, then the company is more serious about finding a fair and legitimate way to settle the case.

It Simply Doesn’t Work — It Only Wastes Time.

If you send a demand letter, most companies don’t take it seriously, or they will pay $1500.  There are some national firms that represent thousands of consumers who file cases and then settle them dirt cheap.  I suppose it works to send demand letters so you don’t have to do any work on the case.

But that’s not our kind of practice.  We file cases we believe in and that we feel are legitimate cases.

Those kinds of cases don’t get settled before suing.  The companies, somewhat correctly, view lawyers that won’t sue as not being serious lawyers and therefore serious money is not paid.

So the lawyers end up wasting months of time to get to the point where they have to file the suit.  And then the collection agencies start to talk with them.

We skip the waiting and go straight to the suing.  If the collection agency wants to talk — that’s wonderful!  If not, that’s great because the case is moving through the court system.

This Is Our Approach And The Reasons For Our Approach.

We don’t claim this is the only approach to take.  But when many lawyers from around the country call us to ask our thoughts on how to proceed, this is what we tell them.

In our experience this is the quickest way to get to justice — the debt collectors leave our clients alone after we sue, we don’t get sued in a frivolous lawsuit, and we get to the decision maker on whether or not the case will settle or if we are heading to trial.

If you have a situation in Alabama with an abusive debt collector and you want a lawyer to negotiate before suing, call our competition.  Don’t call us.

But if you want to sue first, if you have a legitimate case, then feel free to get with us.  We like dealing with serious people who have problems that we can help solve.

Call us at 205-879-2447.  

You can also fill out a contact form.

I look forward to chatting with you!

Have a great day.

-John G. Watts


  1. Will says:

    If I don’t have a contract with the debt collectors and there’s no injured party how can they force me to pay them???

    • John Watts says:


      IF, and that’s a BIG IF, the debt collector owns the debt, and you owe the debt, then they can collect. Contracts/debts can be bought and sold.

      Or if the collector is truly authorized to collect on behalf of the owner of the debt, then they can collect.

      So always good to start to figure out who is calling/writing/credit reporting and do they have the right to do so.

      If you are in Alabama, give us a call at 205-879-2447 and we’ll be glad to help you think this through thanks.

      John Watts

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