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Collection of Debt by B/D - Novice Investor
- Thread starter avenida
- Start date
avenida, to answer your earlier question, any negotiated settlement or payment plan could adversely affect not only your credit score, but hers as well. As I told you on the phone today, part of any potential settlement with E-Trade, or any other creditor for that matter, would be on the condition of no adverse marks on any of three major credit reporting agencies, i.e. Trans Union, Equifax and Experian.
Originally posted by Sarasota
qwiktrade, I'm assuming avenida is not in the business of negotiating with creditors. You are flat out wrong about retaining an attorney. Don't speak of which you no nothing about.
Sarasota.. you are correct, my recommendation to avenida would not be in your best interest, since if he is able to work out a reasonable settlement on his own, you wont get paid.. but let me ask you this.. if he hires you, and etrade says "screw it, lets force him and his mother to declare bankruptcy or pay up".. what will you do to save him then? not a damn thing.. sure you might threaten to come up with some nonsense about him being a novice investor who didn't understand the risks blah blah blah.. but that would still go to an arbitration panel.. and its not hard to figure out which side that deck is stacked in favor of..
but you and i both know that etrade will most likely want to settle this so that they can recover something.. suppose avenida contacts etrade and they agree to let him off the hook for 10k, no interest, monthly payments, nothing on his record if payments are made on time.. 10k - pretty good deal right? but what if YOU contact etrade for him and etrade agrees to let him off the hook for 10k, no interest, monthly payments, nothing on his record if payments are made on time.. what do you get paid? 20% of the savings? 30 or 40%? so he could end up owing much more just for the pleasure of having you dick around in his business..
avenida.. do yourself a favor and contact etrade and see what they offer.. if they refuse to work with you or if you are not satisfied with what they offer then call around and talk to a couple of attorneys that specialize in securities arbitration.. most of them wont charge you for the initial consultation and you can get a feel for what they might be able to do for you.. and don't be shy about asking exactly what they charge.. do a simple search on the net for "broker arbitration" and you will find alot of information as well as web sites for various attorneys..
one last piece of advice.. you are not a small to medium sized company with a cash flow problem.. you and your mothers credit, and possibly her assets are on the line.. if you do decide you need legal help, get someone who has experience dealing with individual investors and is familiar with the intricacies of securities law.. good luck..
-qwik
quiktrade, you really haven't read any of my above posts have you? I have an attorney that handles all consumer debt issues. He is quite capable. I'm an attorney and CPA myself. Are you? Apparently not.
When we begin a negotiation for a client, we do so at no risk to them. NONE. There is no retainer charged. We do not even charge by the hour, building up billable time until avenida has another birthday or two. If we can not reduce the amount owed to 20 cents on the dollar, or at least down to the level the client is comfortable with, WE DO NOT GET PAID! No Results = No Fee. You are right, we do charge a percentage of the amount saved as our fee, but we do not charge 30 to 40% as you suggest.
Let's assume avenida can reduce this debt to 50% of the amount, which is a big assumption. Yes, not a bad deal, but when we are involved, over 90% of the time our client pays about 35 to 40 cents on the dollar, including our fee, without any risk involved. Quik, before you jump in here, remember there is no retainer charged, and we only get paid if a client is satisfied with the work we have done. Further, we have seen on countless occasions where a client will try to do this himself, have his credit messed up without reducing the debt, and then try to get us back in the loop, not only to reduce the debt, but also to clean his credit report as well.
In any event, avenida should have a professional negotiate this for him. Further, avenida's debt is a little small for us to handle, so your implied theory of my greed is unfounded. We usually handle debts in excess of $250K, avenida as you know has $20K.
quiktrade, one further thing, I value your opinion, but this time its wrong. In addition, this probably isn't the time or place to have this debate. This will be my last post on this subject, unless of course you decide to spout off again about something you do not fully comprehend.
avenida, if you can reduce this down to 50%, great. However, you probably will not be able to. In addition, once you decide you may be in over your head, it will make it more difficult for a professional to go in at a later time to reduce the debt to a level below your initial offer to E-Trade.
When we begin a negotiation for a client, we do so at no risk to them. NONE. There is no retainer charged. We do not even charge by the hour, building up billable time until avenida has another birthday or two. If we can not reduce the amount owed to 20 cents on the dollar, or at least down to the level the client is comfortable with, WE DO NOT GET PAID! No Results = No Fee. You are right, we do charge a percentage of the amount saved as our fee, but we do not charge 30 to 40% as you suggest.
Let's assume avenida can reduce this debt to 50% of the amount, which is a big assumption. Yes, not a bad deal, but when we are involved, over 90% of the time our client pays about 35 to 40 cents on the dollar, including our fee, without any risk involved. Quik, before you jump in here, remember there is no retainer charged, and we only get paid if a client is satisfied with the work we have done. Further, we have seen on countless occasions where a client will try to do this himself, have his credit messed up without reducing the debt, and then try to get us back in the loop, not only to reduce the debt, but also to clean his credit report as well.
In any event, avenida should have a professional negotiate this for him. Further, avenida's debt is a little small for us to handle, so your implied theory of my greed is unfounded. We usually handle debts in excess of $250K, avenida as you know has $20K.
quiktrade, one further thing, I value your opinion, but this time its wrong. In addition, this probably isn't the time or place to have this debate. This will be my last post on this subject, unless of course you decide to spout off again about something you do not fully comprehend.
avenida, if you can reduce this down to 50%, great. However, you probably will not be able to. In addition, once you decide you may be in over your head, it will make it more difficult for a professional to go in at a later time to reduce the debt to a level below your initial offer to E-Trade.
avenida - check your Etrade margin agreement, but it almost certainly says that all joint account holders are responsible for the collective account debt.
That means that even if you manage to file bankruptcy to evade your obligations, your mother would still retain the full account obligation and they would pursue her for your debt.
In addition, if they have any inkling that you're leaning toward taking the bankruptcy or "consumer debt" scheister route to evade your obligations - they might accelerate action against both you and your mother.
RE: You're question about looking for an angle to obsolve yourself of the debt by claiming "novice" status - what did you put on your account application? Did you say that you and your mother had absolutely no investing experience and didn't know what you were doing?
If so, then "maybe" Etrade screwed up by even thinking of allowing you a margin account and screwed up again by not immediately liquidating your account when you started to get into trouble - let alone giving you a year to clean it up when you should have realistically received an immediate margin call and had your remaining assets liquidated if you didn't cover the call.
In any event, this "novice" thing of course falls into the utterly ludicrous category of "I'm not responsible and they should have protected me from myself". Whether brokers should "protect" otherwise supposedly responsible adults who should be able to manage their own financial affairs or not is a separate discussion.
But if you lied at all about you and your mother's investing/trading experience or otherwise indicated that either/both of you had a reasonable level of investing experience and maturity to have realistically assumed that you could be responsible for a margin account, then there's no "novice" angle. And if you lied, they might take the tact that you engaged in fraud in opening your account in the first place (possibly changing the whole complexion of your problem).
Are you trying to avoid telling your mother about all this? If so, from whom do you want her to end up hearing about it? You or Etrade (or their collection agency).
Try contacting Etrade again and ask to talk to the manager of their collections group or similar and see if you can work out a repayment program. If that fails, see if there's a way you can borrow the cash from your mother (e.g., home equity loan, etc.). Otherwise, she'll probably be getting a call for the money anyway from Etrade or their collector (especially if you have an attorney contact them on your behalf).
Also, do you or your mother have a separate IRA or other account still at ETrade? If you do, your margin agreement will have pledged all assets (whether in different accounts or not).
Good luck.
That means that even if you manage to file bankruptcy to evade your obligations, your mother would still retain the full account obligation and they would pursue her for your debt.
In addition, if they have any inkling that you're leaning toward taking the bankruptcy or "consumer debt" scheister route to evade your obligations - they might accelerate action against both you and your mother.
RE: You're question about looking for an angle to obsolve yourself of the debt by claiming "novice" status - what did you put on your account application? Did you say that you and your mother had absolutely no investing experience and didn't know what you were doing?
If so, then "maybe" Etrade screwed up by even thinking of allowing you a margin account and screwed up again by not immediately liquidating your account when you started to get into trouble - let alone giving you a year to clean it up when you should have realistically received an immediate margin call and had your remaining assets liquidated if you didn't cover the call.
In any event, this "novice" thing of course falls into the utterly ludicrous category of "I'm not responsible and they should have protected me from myself". Whether brokers should "protect" otherwise supposedly responsible adults who should be able to manage their own financial affairs or not is a separate discussion.
But if you lied at all about you and your mother's investing/trading experience or otherwise indicated that either/both of you had a reasonable level of investing experience and maturity to have realistically assumed that you could be responsible for a margin account, then there's no "novice" angle. And if you lied, they might take the tact that you engaged in fraud in opening your account in the first place (possibly changing the whole complexion of your problem).
Are you trying to avoid telling your mother about all this? If so, from whom do you want her to end up hearing about it? You or Etrade (or their collection agency).
Try contacting Etrade again and ask to talk to the manager of their collections group or similar and see if you can work out a repayment program. If that fails, see if there's a way you can borrow the cash from your mother (e.g., home equity loan, etc.). Otherwise, she'll probably be getting a call for the money anyway from Etrade or their collector (especially if you have an attorney contact them on your behalf).
Also, do you or your mother have a separate IRA or other account still at ETrade? If you do, your margin agreement will have pledged all assets (whether in different accounts or not).
Good luck.
Archangel...thanks for your assessment...no, I can't clain "novice" investor status...I traded a lot...it wouln't make sense...for me right now it would be most useful, if I could get any info regarding how E-trade deals with individuals that are in the similar position...that would give me inside knowledge on what would be realistic to bargain for...I need to keep this quetly away from my mother...she'll freak out if she finds out...so, I'm not even considering bankruptcy...anyhow, thanks again...
avenida..
for a first step you dont want to make them an offer.. you want them to make you an offer.. you never know what they might say.. but aside from that.. here are some links..
http://law.freeadvice.com/financial_law/broker_disputes/
http://www.securitiesattorneys.com/in_the_news_detail.asp?newsStoryID=54
Last November, for example, an arbitration panel sided with discount broker E-Trade Group in a claim it brought against Wichita, Kan., investors Thomas C. Tran and Ann T. Nguyen.
The firm alleged that the couple defaulted on a margin loan involving a 1998 purchase of 7,600 shares of ConnectInc.com, a small Internet commerce firm that was later acquired by another company.
E-Trade liquidated the couple's account, claiming in an arbitration hearing that Tran did not follow through on a promise to deposit money to cover the debt, according to the award decision.
Tran countered that the firm's computer system mistakenly bought more stock than he wanted. But the panel ordered the couple to pay E-Trade the full $41,325 the firm sought, plus 8.75% interest.
"They're still quite upset about" the decision, said their attorney, B. Scott Tschudy.
E-Trade declined to comment.
Most brokerages say they do everything possible to work out agreements with investors.
"Arbitration is the last resort," said Hardy Callcott, general counsel of Charles Schwab Corp.
In part because it had implemented more stringent margin-lending standards, Schwab filed half as many arbitration cases last year as in 1999, a spokesman said.
and http://www.fmcenter.org/fmc_superpage.asp?ID=373
there is just a ton of info on the web about this..
-qwik
for a first step you dont want to make them an offer.. you want them to make you an offer.. you never know what they might say.. but aside from that.. here are some links..
http://law.freeadvice.com/financial_law/broker_disputes/
http://www.securitiesattorneys.com/in_the_news_detail.asp?newsStoryID=54
Last November, for example, an arbitration panel sided with discount broker E-Trade Group in a claim it brought against Wichita, Kan., investors Thomas C. Tran and Ann T. Nguyen.
The firm alleged that the couple defaulted on a margin loan involving a 1998 purchase of 7,600 shares of ConnectInc.com, a small Internet commerce firm that was later acquired by another company.
E-Trade liquidated the couple's account, claiming in an arbitration hearing that Tran did not follow through on a promise to deposit money to cover the debt, according to the award decision.
Tran countered that the firm's computer system mistakenly bought more stock than he wanted. But the panel ordered the couple to pay E-Trade the full $41,325 the firm sought, plus 8.75% interest.
"They're still quite upset about" the decision, said their attorney, B. Scott Tschudy.
E-Trade declined to comment.
Most brokerages say they do everything possible to work out agreements with investors.
"Arbitration is the last resort," said Hardy Callcott, general counsel of Charles Schwab Corp.
In part because it had implemented more stringent margin-lending standards, Schwab filed half as many arbitration cases last year as in 1999, a spokesman said.
and http://www.fmcenter.org/fmc_superpage.asp?ID=373
there is just a ton of info on the web about this..
-qwik