No payday for Danny R. Love, Docket No. 8808-20, filed 5/28/21, one of Judge Morrison’s off-the-benchers. And maybe no payday for Citifinancial, who lent Danny $10K, of which Danny got $1894 in cash, while the rest was used to pay off the balance of Danny’s previous loan. Citifinancial did forgive $9K after nine (count ’em, nine) years of getting some payments and garnishing Danny’s wages. Of course, the stated rate of interest was 25.55%.

I said it long ago. “In the old days, it was six for five in seven days, or three broken fingers in eight; the sharks would lend a worker five dollars and get back six dollars in seven days. Should the worker not pay, the appropriate digits would.” See my blogpost “Family Feud,” 12/12/11. Now, of course, we have courts, benevolent institutional lenders, and the same poor workers, so no one gets hurt.

But it is a payday for IRS (maybe, if Danny has any money left), for tax on the cancellation of debt income Danny got when Citifinancial gave him the 1099-C for the $9K.

Danny tries to convince Judge Morrison that he wasn’t relieved of debt, because he settled out with another beneficent organization after suing them for “breach of contract, violation of the FTC, Fair Debt Collection Practices Act, violation of Tennessee debt collection law, and unfair predatory collection practices.” Transcript, at p. 6. Danny claims the Citifinancial loan was the same as the loan he stiped out.

Note Judge Morrison states “Love’s suit was dismissed with prejudice.” Transcript at p. 8. When a case settles, the parties stip to a discontinuance or dismissal of the predicate action with prejudice.

Except it’s not the same loan. There was no transfer of paper or collateral. The loan balances were different at the same time. Both the benevolent lenders were garnishing Danny’s wages at the same time. None of the payments one lender got showed up on the other’s books. And ultimately nothing shows the Citifinancial loan was satisfied when Danny stiped out the other loan.

I refrain from commenting on loans to people like Danny at interest rates of 25.55%. At least, not here.