Diamond Memberships

Why you Should Join us as a Diamond Member

Diamond Membership is our best deal for people with a lot of curiosity, more than one lawsuit, or who are coaching or helping others in their cases. That’s because a main goal of Diamond membership is to go beyond the usual questions presented by debt law and the debt industry. We look at the politics and economics driving our country. And we look deeply at the law.

As anyone knows who has read our materials, most of debt law is what we call “factory work.” It’s routine and standardized, and this is simply because debt is bought and sold in gigantic deals (called “tranches”). So the average debt collector buys a hundred or a thousand (or many, many more) accounts that supposedly owe money from the same company (usually a credit card-issuing bank) and then, completely relying on the records the bank provides, harasses the people involved to collect as much as possible. And eventually they file many, many lawsuits that look almost exactly the same.

So for most of our purposes, we can simply deal with that large body of identical suits and create responses to them. They’re doing factory work, and we do something very similar.

Going Deeper and Further

But there can be more. While debt collection is generally pretty standardized, there are things that can come up that either present special challenges or issues. And in fact, for all of its routine, most debt lawsuits CAN veer out of the normal. There are always angles in every case, which can sometimes make a difference, and often make things more interesting.

You’ll get a 50% discount off all of our motions packs and other materials. We highly recommend the First Response Kit as a way to simplify your first several steps in this litigation, and you’ll get a 50% discount off the cost for that.

And some of our members like to help others. For these – for people helping others, and for those who want to know a LOT about the law – our Diamond Membership is great.

Special Tactics

When you take on debt negotiation, debt litigation and credit repair at the same time, you discover that some of the tools work for more than one thing. For example, if a debt collector is bugging you AND has damaged your credit, you can dispute the collector’s action both through the Credit Reporting Act and the Fair Debt Collection Practices Act. These two acts have different purposes (as laws) and requirements. Verification under the two acts is different, and verification under the Credit Reporting Act is more difficult and rigorous for the debt collector – and the CRA also gives you a way to attack the original creditor as well if it is reporting you.

And you can, of course, you can use any and all the information you get through either the FDCPA and CRA (also called the FCRA, for “Fair Credit Reporting Act”) in litigation if they sue you. And you can use any information you get in a lawsuit they – or you – file, in attacking their responses under the FDCPA or FCRA. In other words, knowing all three sets of rules can sometimes be very, very helpful. Our Platinum Membership opens some of those ways up to you.

Other Benefits

As with each of the Gold Memberships, you will receive special reports and offers. As a Diamond Member, though, you get them all. This includes:

  • The Three Weaknesses Almost All Debt Collectors Have
  • Take Control of Your Life and Debt; and
  • a discount off the prepaid legal program we offer our members;
  • all the situation products (like motions packs and the other products like that).

Diamond Benefits

In addition to everything the Gold and Platinum members get, Diamond members get a lot more information. They get, basically, all of our reports and books as well as ecourses. This includes our reports like Got Debt? and What if I (think I) Really Owe, Do You Need a Lawyer, and all the rest. And it also includes our book – now being revised – called Special Issues in Debt Litigation. This book was originally about a 250 page book, but it is being revised into several smaller volumes now. Diamond Members will get them, free.

Coaching

In addition to the written materials, Diamond members will get their own teleconferences when the situation calls for it. As we approach our membership goals, the Diamond members will need to discuss things in greater depth and at greater length – they’ll get that opportunity. And there will be other materials, currently in the works, to help them organize, promote, analyze, and all the other things they’re likely to need.

How You Purchase

You buy by clicking on “Register” under “About Memberships” in the main menu and choosing the level of membership you want.

Diamond membership costs $25.00 per month with a $150 sign-up fee.

Platinum Memberships

Platinum Memberships combine all three of the Gold Memberships into one package.

As we often say, debt problems generally travel in crowds – that is, if one debt collector is suing you, others are probably harassing and getting ready to sue you – and still others are messing up your credit report. It’s tempting to try to focus on just one of these things at a time, and that can work. But a more effective way of dealing with debt problems is to take them all on at the same time. So even while you’re beating the debt collector that’s suing you, you’re negotiating with another one to keep it from suing you.

And you’re beginning the process of repairing your credit from ALL of them.

If that makes sense to you, then you should consider our Platinum Membership.

Benefits of Platinum Membership

With our Platinum Membership you get three manuals: the Debt Litigation Manual, the Debt Negotiation and Settlement Manual, and the Credit Repair and Restoration Manual.

You also get access to our complete member-only area, so that you can reduce the amount of repetitive paperwork you have to do in taking care of all these problems, and you get access to all our member-only articles and videos on all topics.

And you can be part of all of our teleconferences.

Special Tactics

When you take on debt negotiation, debt litigation and credit repair at the same time, you discover that some of the tools work for more than one thing. For example, if a debt collector is bugging you AND has damaged your credit, you can dispute the collector’s action both through the Credit Reporting Act and the Fair Debt Collection Practices Act. These two acts have different purposes (as laws) and requirements. Verification under the two acts is different, and verification under the Credit Reporting Act is more difficult and rigorous for the debt collector – and the CRA also gives you a way to attack the original creditor as well if it is reporting you.

And you can, of course, you can use any and all the information you get through either the FDCPA and CRA (also called the FCRA, for “Fair Credit Reporting Act”) in litigation if they sue you. And you can use any information you get in a lawsuit they – or you – file, in attacking their responses under the FDCPA or FCRA. In other words, knowing all three sets of rules can sometimes be very, very helpful. Our Platinum Membership opens some of those ways up to you.

Other Benefits

As with each of the Gold Memberships, you will receive special reports and offers. As a Platinum Member, though, you get them all. This includes:

  • The Three Weaknesses Almost All Debt Collectors Have
  • Take Control of Your Life and Debt; and
  • a discount off the prepaid legal program we offer our members.

10,000 Member Drive

As I point out in our materials on Gold Membership, a key strategy in our debt litigation program is to recognize that debt collectors take a “factory” approach. They file huge numbers of cases and work very little on them because most people either default immediately or give up quickly. So they file a hundred cases, work on none of them, get judgments on 98 percent of the cases they get served, and let a few people get away. Our program helps you be among those who get away “through the cracks.”

But what if everybody defended and fought back?

If that happened, the debt collectors would have to change completely, and until they did, pretty much EVERYBODY would get away from them. Our 10,000 member drive is about making that happen. If everybody fought back, it would shut down the debt collectors and push the judges to stop being mere cogs in the debt collection industry’s machine. With that many people fighting back, learning, watching the courts, and pushing back, it would change the nature of the debt industry completely. I think that would be a good thing.

And so I have begun a 10,000 member drive.

How You Purchase

You buy by clicking on “Register” under “About Memberships” in the main menu and choosing the level of membership you want. Platinum membership costs $20 a month with a $120 sign-up fee.

 

Thank You for Signing Up

Thank you for signing up for information from Your Legal Leg Up. As you know, our mission is to give regular people everything they need to beat the debt collectors and protect what they own.

We plan to give you some important information that will help you get or keep things under control and keep as much as you can from the debt collectors. We’ve just sent you an email confirmation link, and you’ll need to confirm your subscription before you get anything else from us.

The debt collection process is one big machine, in a way, but it does matter where you are in the process. According to your answers to the “What is Happening” field, we will send you information tailored to what is actually happening to you now and what you might want to do from there. The options are based on whether you are worried about your debts, being harassed by debt collectors, or actually being sued.

Please confirm your subscription. We look forward to helping you take control of your situation, whatever it might be.

Regards,

Ken

Jubilee for Student Debt

There is a movement – in its very early stages – for a debt jubilee. You may not have heard of it, but it has some people very worried. And I think there’s a good chance it will come to pass. Soon.

This is the second of a series of articles on a continuing political phenomenon important to people with debt. The first article is “Occupy Wall Street.”  The second article is Econ 101 or What Happens when the Bills Come Due.

What is a “Jubilee”?

A jubilee is the mass forgiveness of debt – a governmentally imposed wiping of the slate clean from all debt of any specific, or all, types of debt. You might think it could never happen here in the United States, but it has, historically, happened several times in various places. Never was it more appropriate than for student debt, in my opinion. Of course, other kinds of debt could also get thrown into the pot when things get going. Is it good? Is it likely? And if it happens, what will be the probable consequences?

Any talk of student loan jubilee should begin with what has happened in the past forty years. During that time, student loans have become not just popular, but essential for almost all students entering college or other formal, advanced education in the United States. In some countries in Europe, for example, schooling is free, but here it is expensive – very expensive. And it has been getting more so at a rate far exceeding the rate of inflation for the past forty years. This is because student loans, which had a noble publicly discussed purpose (making education available to all) had the unintended consequence of making education unaffordable to all. By relieving the price competition, it has allowed schools to increase tuition at a tremendous rate.

The schools and the banks have become filthy rich from the system. Student graduation rates have fallen, and average length of college has increased. And a whole generation of students have entered adult life with a crushing burden of debt.

Because of “special government protections,” bankruptcy is almost never any help to people with student debt. They declare bankruptcy and still end up paying everything they have for student loans that, all too often, were completely useless to them. Whatever you think of Trump’s tax cuts for the super-rich in 2017, the amount would have been enough to rid people of their student debt burdens, so it can be done. It’s just a question of who gets the money: the super rich 1%? Or the poverty stricken 99%?

This question is soon going to be coming to the fore.

Social Security is a Huge Issue

There’s another factor at play. The baby boomers – people born from roughly 1950 – 1965 – have plundered the resources of the past and future. They’ve given themselves tax cuts and embarked upon expensive wars while decimating the interest rates that allowed old people to live on their savings. And while guzzling the resources that could have given the young a start in life. Now they’re beginning to retire, assuming that Social Security will keep them in the comfort to which they are accustomed, for the rest of their long lives. When boomers started paying into Social Security, there were many workers per retiree, now there are less than half as many workers per retiree. Social Security is paid out of current tax revenues, so what that means is that the “surplus” people like to talk about for Social Security is an illusion – that surplus is made up of government bonds which are paid (or rolled forward to be paid later) out of current taxes. The millennials will be paying for the boomers’ retirement, if they choose to do so.

By election time in 2020, the baby boomers will no longer be the largest voting group in the country. Millennials will become the largest voting block, and they will be gaining electoral power for many years after that. It is going to occur to them that the boomers have pillaged their futures. It will occur to someone that the time is ripe for a jubilee to set thing straight. That person will find a passionate following of people who have never felt called-upon to vote. Politicians have pandered to the boomers for many years. They’ve ignored the millennials, and the millennials have ignored them.

That could change very suddenly. I think it will. Some people are in fact already talking about it.

What it Means

The change in electoral power and the likely shift in governmental focus could be huge. One could hope that the millennials will strive to set some priorities that the boomers never managed. In that scenario, student loans would be eliminated and free education installed (perhaps). Social Security would be managed in some way take care of the old without overburdening the young, and peace and harmony could descend forever and ever amen. Something has to change for that to happen, though. Either the super-rich will have to pay much more or the military, for example, will have to take much less. It could happen, but these are both deeply entrenched special interests with a lot of money and power.

An alternative scenario is less attractive but more likely. In that scenario, student debt is eliminated and there’s a lot of talk about cutting back on money to retirees and the military and of taxing the super-rich. What actually happens is more of what has been happening, though – the deficit balloons. The money is paid in depreciated dollars, and the debt is pushed down the line for the future to pay.

Eventually, that isn’t going to keep working.

Is There a Moral Duty to Pay Debt Collectors

Debt and Moral Duty

Debt collectors and bankers, and their minions, like to talk about the “moral” duty to pay your debts. Is there one? And if so, does it extend to paying bankers and debt collectors? You’ll have to decide for yourself, of course, but I don’t think it’s the clear issue the debt collectors want you to think it is. Regarding paying a debt owned by a debt collector, I think there is no moral duty at all.

 

Debts and Morality

First let’s consider the broader question: is there a moral duty to pay your debts? Creditors like to say so, of course, but are they really impartial? Of course not. Their invoking a moral duty is highly self-serving.

Commercial Loans and Interest Rates

First let’s look at what a loan is, as it has come to be meant in modern times with credit cards. Credit cards in essence involve a loan – at an extremely high rate of interest: the issuing bank “lends” you the money to pay a merchant for some service. Interest payments on loans are supposed to cover two things: risk of nonpayment and the loss of the present use of the money. In other words, interest payments are designed to cover the fact that you’re giving the money back later (called “discounting” for time) and the risk that you won’t pay it back at all.

The way you discount for time is easy. You look at the inflation rate, taking a guess as to whether it will continue or not. The present inflation rate is somewhere between one and four percent, and the banks are, in any event, borrowing the money from the Federal Reserve for much less than one percent. That means that almost the entire interest rate either provides the banks an obscene rate of profit or pays for a risk of loss of approximately 30%. It also means that loans are business propositions which contemplate a very significant risk of loss (much higher than the actual loss would justify) – a risk that is paid for by the borrower on every loan that is repaid.

Any loss on a loan is more than adequately repaid by this premium on other loans to people with the same credit standing. I don’t see a moral duty to repay there, do you?

Non-Commercial Loans are Different

Notice that I am not addressing loans made for personal friendship, for example, where the risk is not compensated and offset by the interest rate. I see these as completely different and believe there is a moral duty to pay back someone who actually takes a risk on your integrity. But that is certainly not credit cards or other arrangements where you pay an interest rate higher than the rate of inflation.

Does the Law Imply a Moral Duty to Repay?

Is there a “moral” duty to repay a loan implied in the law? Really, not very much.

There are things that are considered legally “bad,” and these things are called “torts.” Assault, theft, and a variety of other things are torts, and the main thing they have in common (besides many of them actually being criminal offenses as well as “civil” torts) is that if you prove them, you are entitled to “punitive” damages or some sort of statutory “penalty.” That is, if someone commits a tort against you, the law lets you actually try to punish them (which is the point of punitive damages or statutory penalties).

For plain breach of contract cases (like not paying a bill), there are no punitive damages or penalties – only the money actually lost. In formulating this policy over the centuries, the courts have actually pointed to the beneficial effects of allowing breaches of contract. Not punishing breach of contract encourages people to act in more efficient ways, although to be fair avoiding payment may not be completely within this concept. There are some indications that the law recognizes a moral obligation to pay, although it has very little actual legal force.

Usury – Is THAT Immoral?

In ancient days throughout the Christian world, and even now in some Islamic law, charging interest on any loan was considered immoral. Most states – even now – have laws against “usury,” which is charging more than a certain amount of interest. It might interest you to know that the prevailing interest rates charged by credit card companies would violate those laws in most states. Ever wonder why credit cards always have their financial centers in just a few states? It is the way that they evade the usury laws. Because while states can control the interest rates local concerns charge, the courts have held that credit cards are “interstate commerce” and cannot be controled by the individual states. Only the laws of the state in which the credit card issuer is located can set that rate. Thus the interest rates charged by most credit cards, most of the time, could be considered immoral or illegal from some points of view.

That doesn’t seem to bother the banks or debt collectors one bit.

How about Business Bankruptcies?

What about when large businesses go “bankrupt?” For them it mostly means that they get to trash their commitments to workers and their pensions. Ever hear anybody howl about “moral” duties? No. The talking heads all line up to discuss how tough business is, or whatever, but there is never any real moral pressure brought to bear on these companies. Of course that would be pointless: it’s just business, right?

And of course in this day of bailouts, the banks don’t even have to go through the farce of bankruptcy. They get their money basically free from the federal reserve and use it to speculate or lend it to individuals at rates as high as 30% or more – and when that isn’t good enough to fund their bonuses, they get huge amounts of money in other ways from the government. You know who pays for that, right?

Is There a Moral Duty to Pay Debt Collectors?

As I have pointed out elsewhere, you might consider that you have a moral obligation to pay a business that extends you credit, although I do not believe that is a powerful obligation. What about to debt collectors? In their case, I do not believe there is any duty at all. Where does the duty towards a merchant that extends you credit arise? surely it is from the faith in you that the action of lending you money implies. The merchant extends credit to you as part of an overall relationship which in some cases is quite personal, but in every case is based on a mutual expectation that you will pay the money back. None of that is going on when debt collectors own the debt.

By the time the debt collector owns the debt, the original creditor has lost all the money it is going to lose – and you can believe that the debt collector bargained hard against it to pay as little as possible for it. If you pay the debt collector you do not improve the merchant’s situation at all – you simply give the debt collector a windfall profit. And the debt collector purchased the debt knowing you were struggling financially – their intention was never to help you at all or do you any good at all. Instead, a debt collector exists to squeeze, punish and ultimately sue you in an attempt to force you to pay. I see no moral duty to pay at all, although I emphasize that there is still a legal duty if they can prove it in court. My point is that nothing should hold you back from giving it your best not to pay.

Conclusion

I won’t say that morality is for suckers (although the bankers would), but what I do say is pay attention to your own needs and interests – and look carefully at anybody who criticizes you for taking care of yourself. The moral talk by debt collectors and their servants is simply a gimmick to get  you to pay.

Occupy Wall Street and Debt Jubilee

This article was originally written only about the Occupy Wall Street when that was a “thing.” For an instant in time, it looked like people might look up and notice the huge shift in wealth from the poor and working classes to the rich. And from the young generation (Millennials as they’re now called) to the Baby Boomers That moment has passed but the issues remain, and a large-scale disruption seems inevitable. The student loan picture has grown much worse, and combined with health care and retirement issues, might well bring on an inter-generational conflict of massive proportions.

I think it will likely take the form of a “debt jubilee.” And this, along with other economic policies, will have consequences.

Occupy Wall Street – The Beginnings of a Serious Movement

As always, I’m a little cautious when I bring an “outside” issue into the discussion of defending yourself from a lawsuit brought by a debt collector. But there are links: there is increasing resistance to the status quo of banks and debt collectors using the legal system to take things away from people without a lot of money. So far, this resistance hasn’t accomplished much (if anything) on the broader political scene, but it is beginning to create an energy that may affect what litigants and judges will do. It may also radically change the whole debt legal landscape.

And that brings the discussion within the legitimate scope of my analysis.

Here’s what I wrote about Occupy Wall Street, and then there’s a link to an article about debt jubilees.

Occupy Wall Street Is Just Getting Started

I am very happy to see the demonstrations. As I have mentioned before, there is certainly a “class war” going on, but that war is not in the words of the fringe politicians. It is in the actions of the political decision-makers, who have transferred trillions of dollars to the wealthiest people (by and large, these are the people who own the banks) through the bailouts and other policies. It is the working and middle class people who are and have been under fire. They pay the price of the bailouts to the rich, and they are the ones being sued for debt more than anybody else, who are losing their homes and groaning under big credit card balances with outrageous rates of interest.

They should be mad. Occupy Wall Street has started, like so many other social movements, among the young, but it is showing some signs of attracting the working and middle classes. There’s smoke. Will there be fire? I think that possibility certainly exists, and the persistence of the “occupation” has been impressive.

The Occupiers’ Message

It isn’t that I think the demands of Occupy Wall Street are coherent at this point. I haven’t been able to make out any sort of specific, consistent message from the things they have written, or that have been written about them. But that said, I do believe that they have a point. They know they’ve been screwed –they just don’t know how. Yet.

“Green Tea Party”

Last year I called for a “Green Tea Party.” Although the name was a little tongue-in-cheek, the thoughts behind it were quite serious. The Tea Party, with its calls for “smaller government” (but apparently without wanting to reduce American military adventurism around the globe or subsidies for corporations and other traditionally right wing interests) captures the imaginations and hopes of a lot of people who feel disenchanted by politicians. Occupy Wall Street, with their opposition to bailouts for the wealthy and other corporate “help” (but apparently with some faith in the trustworthiness and goodness of government), really are a sort of mirror image of the Tea Party.

There is a lot of antagonism between the two groups right now, but they both, actually, seem to want the same thing. Both groups want a world where people have a chance to survive and get ahead in life. Each identifies one side of the coin as the problem. And the coin is that we have a ruling class that uses government as a tool -to take money from the lower and middle classes and give it to the rich, and to expand their reach and power through the world.

A Combined Populist Movement

What would happen if Occupy Wall Street came, as many progressive organizations did during the Great Depression, to view big government as the problem rather than the solution? What would happen if the Tea Party, as Ron Paul clearly does, came to see the assertion of U.S. military power around the world as a form of big government opposed to personal freedom? or corporate bailouts as contrary to free market enterprise?

Then the Tea Party and Occupy Wall Street might come together with some real populist power. It would never be called the “Green Tea Party,” of course, but it might be called “The New America” movement or something like that. Something that might capture the urgent need for our country to move back towards real democracy, away from the on-going siphoning of resources to the wealthy, and away from the constantly expanding government that makes that possible.

Public Response

The response to both the Tea Party and Occupy Wall Street has been “instructive.” It’s actually very similar to the initial response to “Arab Spring,” the movement which has toppled dictators in the Middle East and continues to reshape politics over there. The financial press ignored Occupy Wall Street as long as possible, and since then have been, almost uniformly, contemptuous or patronizing. Politicians have either ignored the group or tried to co-opt them. And the police response has mirrored what we saw in the Middle East out of the dictators: brutal and arrogant.

Meanwhile, more and more people are gravitating towards the marchers.

There has been criticism of the Tea Party that they were, in fact, co-opted by the Republican Party, and I think that is partially true. It has been a platform for the anti-intellectual side of the party, no doubt. But this co-optation is certainly not complete, as the Tea Party candidates have shown that they do have their own agenda that is not always under the control of the rest of the party. If the Tea Party and Occupy Wall Street could somehow see beyond their differences and develop the broad common ground they share, the resulting movement would, I believe, be beyond the power of either political party to co-opt.

Now a new phase of this movement is beginning – a call for “debt jubilee,” where student loans will simply be wiped off the books. How will this happen and what will it do? Click here for article on Debt Jubilee. The movement will dramatically affect everything in the U.S., from schooling to Social Security and beyond. And there will be consequences.

 

The Most Dangerous Myth for Consumers in Debt

Consumers who owe money – debtors – often believe a lot of myths that are bad for them. The idea that somehow someone will take care of them is the worst. It shows up in many ways and is always bad news.

It isn’t necessarily anybody’s fault for believing the idea that the system will try to be fair or that there’s some easy way out, either – there are a lot of people peddling it. But it’s wrong in the most important ways. The system will NOT take care of you in any important way. It’s going to be up to you.

So where does it show up and how does it do so much damage?

People Think the Debt Collectors will Try to be Fair

Debt collectors make very little effort to be fair once a lawsuit is filed – and they don’t try much before that, either. Once you’re on their books you’re in their sights, and the only thing they really care about is getting your money.  At the “harassment stage,” the debt collectors are paid depending on how much they can get you to pay, and not many people trust them to tell the truth or do the right thing. And yet so many people tell me they have offered information or money to the debt collectors or asked them to give them a break in some way. They SAY they don’t trust them, but then they depend on them to make a fair or helpful offer.

Debt Collection Lawyers

The lawyers are supposed to be careful, at least, before filing suit. Lawyers have an ethical obligation not to bring meritless suits. Do you believe they make that effort when suing debtors?  Probably not – and you would be right. The courts wink at the collection process, allowing lawyers to “rely” on the statements of the creditors that you owe the money. In the case of debt buyers, ironically, the very agreements by which they buy debt say that the records cannot be trusted and are not guaranteed. But the lawyers forge ahead usually without the slightest idea of what’s in the case, let alone whether it’s right or not.

And the courts let them. And debtors share information and throw themselves on the mercy of these sharks by the thousands per DAY. That’s trusting the myth.

The Courts

And of course most people trust the courts. The courts have their flaws, but trusting them to take care of you is a big mistake even without them. It is not the courts’s job to take care of you. They give only the briefest look, if any at all, at the outcomes of debt cases – they don’t have time, and they aren’t even supposed to. The legal system is designed as an “adversary” system. That is, it is a fight, and in any fight people could use various strategies. The court will let you use almost any strategy you choose, and if that causes you to lose it isn’t their fault or concern.

The courts will not require the debt collectors to put on admissible evidence. If they did, most debt collectors would never win their cases. Instead, it is up to you to object to evidence you don’t like and make the court keep it out. If you don’t do that, the court lets it in. And yet people expect the court to try to make the outcome of cases fair. They do not.

You wouldn’t believe how many people do not even show up in court “because they don’t owe the money.” They somehow trust someone at court to see that and care, but this is just foolish. They aren’t looking for what is right – they’re looking for your money. And if you let them get it, they will get it.

Remember that when debt buyers (especially) and even original creditors sue you for debt you have a very good chance to win. But it is entirely up to you to make that happen. You will have to learn what steps to take to protect your rights and take them. Otherwise you will lose. Our business exists to help you learn, and encourage you to do, the things that protect you from the debt collectors.

 

Ending the Debt Nightmare Pt 3

This was originally part of a promotional series. In that series we discuss the way people often run into debt trouble. It starts with some difficulty – often medical bills or a lost job (or both, obviously). Then is spirals out of control because the bills don’t stop coming even if you’re having trouble paying them.

The banks are often only too willing to lend to people having trouble paying debts. In fact, they target people like that because one of their main sources of income is the exorbitant fees they charge for anything that goes wrong.

And then the debt collectors get involved…

Ending the Debt Nightmare Part 3

Bothered by Debt Collectors

Debt – both a personal problem and a social issue

We know that if you are facing any kind of debt problems – and most definitely if you are being sued or threatened with suit – you have a situation facing you, personally, that is extremely important. We take that very seriously, and most of our efforts are designed to help you solve the problem on a personal basis. If you’re being sued, for example, that means we want you to win – and then to repair your credit report so that it doesn’t hurt you anymore.

If you are being harassed by debt collectors or have a negative credit report already, we want to help you fix those things at the personal level. Thus we are strong and committed advocates for you. We’re on your side all the way.

There’s also a social justice issue here which is worth keeping in mind. You will not always find the courts sympathetic to you or willing to listen – or to do their job at all, frankly. We believe that this reflects a larger issue where the powers that be seem to think it is perfectly fine to rob from the poor and give to the rich. In this area, we think that the more people who represent themselves in cases like this, and the stronger and better you are at standing up for yourself… the better everybody else will be. And the more who do it, the better for everyone. So we are also strong social advocates.

In other words, sometimes the courts may seem unwilling to listen to you or actually hostile. If you persist, though, you will still have an excellent chance to win.

Stand up for yourself in every way. Don’t let the debt collectors rip you off – which they will certainly do if you give them the chance. Fight back! Even if you used the credit card or borrowed the money, you have to defend yourself to make sure they don’t get any more than they should and don’t do any more harm than they’re entitled to. And in reality, you have a really great chance to win. Completely.

The law is an adversary system, and the up-side to the fact that if you don’t take care of yourself the debt collectors will rip you off is that if you do take care of yourself you will probably be in better shape than you can even imagine possible right now.

Sued for Debt – What’s Reasonable to Want out of Settlement

What’s Reasonable to Want and How do you Get it?

If you’re being sued for debt and have at least some money, you may be thinking about settling the case. What’s reasonable to pay? What’s reasonable to want in return for your money? And how do you go about it all?

These are questions that came up in a recent case evaluation. The answers are dynamic, but in a general way they point to some useful ideas.

Settlement Happens When Both Parties Agree they Can’t Do Better

In lawsuits, and perhaps all of life, you take actions you think will give you the best possible outcome. That’s a simple idea, but what it means is that if a company is suing you, they will settle if and only if they think it will give them a better outcome than pursuing the case to trial. In evaluating their case they look at “risk” (of losing) and cost (to pursue the case). When they file the suit, they fully expect to win the case either by default or within a few short weeks without having to spend any significant effort on it. Their only concern is whether you’ll be able to pay, but they do have a serious concern about this issue and will likely either settle for less than they demanded. But not much less.

If you want a better settlement, you’re going to have to take actions to change the way they view the suit.

Look at the Overall Case

Not all lawsuits or claims for money are created equal. If the plaintiff is a debt buyer (and not an original creditor), they will very likely have some or all of the weaknesses we mention in our Three Weaknesses Report. That is, they probably cannot win the case if you fight it intelligently. But they don’t expect many people to fight at all, and of those who do fight, they don’t expect many to know what they’re doing.

That means that when they file suit they completely discount all risk of losing, and they expect costs to be minimal. You need to change those opinions, and if you fight you can change their opinions about both of those things… eventually.

If the plaintiff is an original creditor, there is still a chance they’ll have the three weaknesses. But again they will completely discount any risk of losing. And remember, the lawyers bringing these cases scarcely if at all look at the cases – they have no real idea of what they have. They base their lack of concern over losing on the fact that so few people fight the cases.It’s a waste of money, they figure, to spend even one minute per case looking at the file when almost none of them will actually be disputed.

Again, you can change that by fighting. In discovery you can find out whether they have what they need – and at a minimum you will be adding to their risk (since they’ll have to start spending money to pursue the case, and they’re worried about whether they’ll get it back).

Therefore, it almost always makes sense to start fighting – and to do as good a job at it as possible – whether you have a debt buyer or original creditor, and whether or not you want to settle or try to win.

When it’s Time to Talk Settlement

After a while, you may be able to get the other side to take settlement more seriously.  When you do, what can you reasonable expect from them? Well, in short, that all depends on just how worried they are about their risk of losing and the cost of continuing. If they’re very worried, you could get them to clear whatever credit damage they have done to you, take little or no money to walk away, and give you a dismissal with prejudice.

If they’re not worried, you won’t get much from them. Simple as that.

Factors to Consider in your Favor

Some things that could help your case – you’ve shown them that:

  • They need, but don’t have, a contract with your signature
  • They cannot get records of the debt into evidence
  • They cannot prove they own the debt
  • The case is going to require a significant amount of attorney time to complete
  • The case will not be resolved for a long time
  • They know you know these things

Factors that Could Hurt Your Case

There are some things you can do to make settlement more difficult. And understand, the better your chances of winning are, the more likely they are to settle, so these factors should be considered damaging to your chance of winning at trial.

  • You have admitted to them you owe the debt
  • You have paid the debt collector money
  • You have told the debt collector where you work or bank
  • The trial has been set for a date not far away
  • You have not conducted any discovery

Do you see how all of these things lower their risks or uncertainty regarding getting money from you?

Note that one thing that is NOT a factor is how much they paid for the debt (if they’re debt buyers).  They probably did not pay much, and this might have a small effect on the amount of money they insist on, but their rights are measured by the amount of the original debt. And they will push for the most they can get according to the factors we mentioned above. How much they paid for the debt makes almost no difference. Whether they have “written off” the debt is an accounting matter that also has no impact on your negotiations or the case in general.

Conclusion

If you can do a lot of the things that help you and avoid most of the things that hurt you, you have a very good chance of winning at trial. The better your chance of winning is, the better a settlement you could get if you settle. It all starts with knowing what you’re doing as soon as you can (and of course that’s what our membership is for).

We often say there are no free lunches, and that most definitely extends to settling lawsuits. They will only settle with you and give you what you want because they think that is better than the alternative of continuing to fight. Don’t expect them to settle as a favor to you or from the goodness of their hearts. It just doesn’t work that way.