Debt Defense System

The Debt Defense System

The Debt Master Series

Defeat the debt collectors in lawsuits, end debt problems, and repair and restore your credit.

Knowledge Applied is the Power to Defend

You can beat the debt collectors if they sue you. It’s mostly a question of knowing what you need to do and doing that throughout the lawsuit, while at the same time not doing the things you should not do, until you either make them go away or win at trial. It sounds simple, and it is – if you know what you’re doing.  You will with the Debt Defense System.

The Debt Defense System

In this video we talk about the Debt Defense System – who it is good for, what it is, how it works, how to get it, and how to use it.

First of all, should YOU get the Debt Defense System?

You should get the Debt Defense System if you are actually in a debt lawsuit. If you have not answered the petition yet, you will have time to read the materials as long as you have at least a day. Or several hours. So time is not likely to be a problem, and you get a link to a downloadable product (the Manual) almost instantly. So – time not really going to be an issue.

If you are already in the midst of the suit – for example a motion for summary judgment has been filed, or things are just kind of hanging out, then you should also get the Debt Defense System. If you have something specific to do to defend yourself, you will find specific materials in the members-only part of the website, and the Manual will help you understand how they fit into the bigger picture. If you’re hanging out, you shouldn’t be – you’re wasting time, and the materials will help you make better use of your opportunities.

If you were sued but did not answer and got a default judgment against you, you should maybe get the product. Depends on how old the judgment is. You need to know the rules on motions to vacate. Google “motion to vacate,” time and your state’s name and read until you get an idea about whether you will have a legitimate basis to vacate the judgment. If so, you will probably want the Debt Defense System. If you think you’re out of time on a judgment, and it’s a big judgment, you should consider asking a lawyer in your state to take a second look at it. You might not be. Our materials will probably not help you with this question, however. It will be fact-specific.

If you are not being sued, we do not recommend this material. It’s interesting and informative – it’s very cool – but you would be better off just reading articles on the site. There’s lots of free stuff. The Manual and membership are designed to give you tools to win a case, not just information about the law even though they give you plenty of that. You could try Special Issues in Debt Litigation if you have interest in more than just what’s on the site.

If you are being sued and have a lawyer, you may or may not want to get the Debt Defense System. It will certainly help you know what is happening in the case and inform you about strategies and options. I don’t suggest that you use it to question your lawyer and suggest they don’t know what they’re doing. If you decide they don’t, then get another lawyer, one you do trust. We have a report you might find helpful for that. Badmouthing and second-guessing a lawyer you continue to hire is not a good idea.

The Debt Defense System is designed for debt litigation. Specifically, this means a lawsuit brought against you for a debt you supposedly owe which you may, or may not, owe. It will help you against either debt collectors or original creditors, and it doesn’t matter what state you are in – there’s a pattern, at least, that they follow in all the United States.

On the other hand, the materials are not designed to help you with things that are not debt law, even though they may be somewhat related. They will not help you with foreclosure defense, for example, or clearing real estate titles. They aren’t designed to help you sue a merchant which defrauded you, and they won’t help you repair your credit report. It will give you a basic insight into the legal system that you may find helpful, but I’m sure you can find better help if you look for these non-debt law issues. We do have a separate product for credit repair.

The Debt Defense System consists of a Manual, which is designed to give you an overview of the debt litigation process. It gives you a basis for beginning to decide how to defend yourself. It helps you decide whether the summons was properly given to you to start the suit and what to do if it was not. It helps you look at the behavior of the debt collector and consider your options, and it gives you a great deal of information about the rest of the lawsuit too. The Manual would be enough, in most cases, to get you all the way through the lawsuit, so it is a rich source of material. You can look at the product page for more specific things.

We decided that wasn’t enough. As we have explained in the materials about the membership, debt collectors have some big advantages coming into a debt suit. They know the information, so they can file suit and pursue it without any problem at all, they deal with massive numbers of the cases so they can do their actions “in bulk,” which further keeps their costs down. They have computers full of documents they can use to spit out ridiculous objections that take up a huge amount of your time. And they are “connected” to each other. Debt collectors help each other, in other words, and they never, ever worry about whether what they are doing is wrong in any way.

Just using the manual and materials, you could probably beat the debt collector. But you would spend gigantic amounts of time redoing things that have already been done by others. You would worry, and you might make a mistake. Membership is designed to help you streamline things so that you save time and anxiety. We have a document bank which you can use for samples, we have some videos and articles created just for members to use, and most of all, we have the teleconferences.

The teleconferences are your way to connect with others. They’ll help you know more both by giving you a chance to get your specific questions answered and by hearing other people’s questions. That helps tremendously because you don’t always know the right question to ask, you know?

And then, the teleconferences are also a way to talk to other people in the same situation trying to do the same things you’re trying to do. Suddenly you feel smarter, better, happier and more comfortable. Debt collectors often call their prey bad names, and a lot of people being sued for debt feel guilty or wrong. The teleconferences are the best possible antidotes for that, and since your willingness to fight is the main ingredient in your chance to win, you improve your chances a lot by attending the teleconferences.

The way to get the Debt Defense System is easy. You need to get the product called the Debt Defense System and the renewing membership at the same time.  If you get the membership without the System manual, your money will be returned. If you try to get the Debt Defense system without also having the membership in your checkout cart, you will not be allowed to make the purchase. You have to get them both. You will be able to cancel the membership when you need to do that, so you are not locked in for any specific length of time, but if you really understand that the membership is the most valuable part of the package, you won’t do that. You’ll get six hours of teleconference per month, every month – time to ask your questions, hear other people’s questions, and talk to other people in the same boat.

Your Legal Leg Up – The Power to Retake Control of Your Life

Simply put, Our materials tell you what you need to know to take on the debt collectors. We thoroughly explain the debt collection process and tell you who the players are (and what they want) in plain English. We show you how to navigate the court system and laws so you can neutralize the main advantages of the debt collectors and use your own advantages the best way. We show you how to win without spending everything you own on the fight. And we include the forms you will need to look sharp and professional regardless of what court you’re in, and the resources and back-up you will need.

If you fight back the debt collectors soon find out that it isn’t profitable to keep after you. That doesn’t mean they’ll automatically drop the case and walk away as soon you file an Answer, of course – though many do. Rather, they’ll often push back to see if you really will stand up. The more you do, the more likely they are to drop the case or settle it on drastically better terms for you.

Click here to Buy the Debt Defense System

You Will Be Prepared to Fight


          Our Debt Defense System prepares you to fight. The Manual itself is over 200 pages long in plain English. It has chapters on

  • how to answer the petition and make a counterclaim (and why you’d want to); or
  • how to file suit yourself against a debt collector and why that sometimes makes sense;
  • how to conduct discovery, which is where most cases are won or lost;
  • how to make and defend motions, prepare for trial, how to win at trial if it goes that far;
  • and more.

There’s an appendix with the complete text of the Fair Debt Collection Practices Act and another with the Federal Rules of Evidence. There’s a Glossary of Legal Terms so you can understand what the bad guys are saying. And there are innumerable links to articles and videos on related topics. All so that a non-lawyer – busy with life and under stress – can get a fair shake.

There is the Forms Book (included), which has the forms you will need to make your presentation sharp and professional looking in Open Office (a free, Word-compatible program) so you can cut and paste more conveniently. The other side will know you mean business when they see your documents, and that’s most of the fight.

And the whole thing is linked to sites on Youtube, Twitter, Facebook and elsewhere so that you’re getting so much more than just the Manual. Much, much more. If you look at our products, you will find many different products for different stages of the litigation. You will see that we have:

  • Motion to Vacate Default Pack (so if you have defaulted (lost your case by not showing up) you can try to scratch your way back in;
  • Motion to Dismiss Pack – for early stages of litigation to try to win easily and quickly if you can;
  • Motion to Compel Pack – to force the debt collector to cough up the information you need to beat it rather than stonewall you endlessly; and
  • Motion for Summary Judgment Defense Pack – to keep the debt collector from getting a quick and unfair victory over you

          Access to all this information is included in the Debt Defense System. And really… that just scratches the surface. The Debt Defense System is what you need to defend yourself.

Knowledge Applied Is Power


Ken, Just a quick email to say THANK YOU for your well-written manual! I was scared to death when I got a summons and Complaint served on me by a debt collection attorney in Nov. I did exactly what you said, though, and basically let them know I wasn’t going away. The key, I believe, was in the Interrogatories (I used the exact same ones in your manual). The wouldn’t answer them, even after my motion to compel. So I filed a Motion to Dismiss, and that was pretty much it. The attorney folded like a cheap suit, and I have to say it almost felt better than sex!

Thanks again! —Gary

          Knowing what to do means you can be comfortable in court. You can know the basic legal principles that control the cases and the facts of your case and, to the extent possible, of the other side’s case. This kind of knowledge gives you the best chance to win.

          Hi Ken, I just went through mediation…The mediator said he thought I was better prepared than most lawyers. – Frank, Arizona

The Advantages of Self-Representation

Representing yourself is the most cost-effective way to defend yourself from a debt law case.Yes, you’ll have a very good chance to win the case or, if you choose, to settle for far below what the debt collector wanted in the first place. Yes you will save a lot of money. Yes, you need to do this right away. Get the Debt Defense System now.

Click here to Buy the Debt Defense System

Rights under the Fair Credit Reporting Act

You’ve heard about having rights to a fair credit report. Here, in plain English, is a list and explanation of your most important rights under the Fair Credit Reporting Act (FCRA).

The Importance of Credit Reports

Our country runs on credit and credit information and the credit reporting behind them. Of course there are the obvious uses of credit to purchase things, but as more and more people are finding out, credit reports are used for much more than that – they often impact employment decisions, housing decisions and rates, business equipment lease rates, and insurance availability and price, among other things. Bad credit has a high price in so many ways.

Credit Reporting Network

As important as all the interests affected by it are, the credit reporting network (the businesses which create and publish your credit information) is a vast and largely faceless bureaucracy. The federal Fair Credit Reporting Act (FCRA) was designed to create some accountability in this network and protect consumers from some of its abuses. The FCRA was designed to safeguard the accuracy, fairness and privacy of information in the files of consumers held by the reporting agencies.

Different Kinds of Credit Reporting Agencies

There are many different kinds of consumer reporting agencies – almost everybody knows about the credit bureaus, of course, and there are also specialty agencies that sell information about check writing histories, medical records and rental history records. The FCRA was directed primarily at these agencies, rather than the creditors or companies with which you normally do business.

Here is a partial list of your major rights under the FCRA.

This isn’t a complete, exact replication of your rights under the Fair Credit Reporting Act. As with most important laws, the exact rights and their limits change as courts interpret the laws. But this will give you an accurate overview – a place to start.

Access to Your Credit Report Limited

A consumer reporting agency may provide information about you only to people with a valid need – considering an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for the information. And in most cases you must give your consent before the information is obtained or used.

Rights When Credit Information Used Against You

Anyone who uses a credit report or another type of consumer report to deny an application for credit, insurance, or employment – or to take other adverse actions against you – must tell you, and must give you the name, address and phone number of the agency that provided the information. You are entitled to a free copy of that report.

Right to Find out What Is in Your File.

You can find out all the information about you in the files of a consumer reporting agency. You must be offered a free disclosure if:

  • A person has taken adverse action against you because of information in your credit report;
  • You place a fraud alert in your file as a victim of identity theft;
  • Your file contains inaccurate information as a result of fraud;
  • certain other reasons.

All consumers will be entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies.

Right to Dispute and Correct Information

If you identify information in your file that is incomplete or inaccurate and report it to the consumer reporting agency, the agency must conduct a “reasonable” investigation, and it must report the information as disputed. If it is unable to verify the information after investigation, the agency must remove or correct the entry.

For practical reasons, this provision may actually provide more important rights against the businesses that report credit events (the debt collector reporting a debt as unpaid, for example) than against the reporting bureaus.

Time Limits for negative information.

In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.

Straw Man Theory

Read more

Four Decisions

Decisions you must make to Start Getting Back to the Good Life

If you’re being sued for debt, you’re going to have to make four decisions.

 

Lawsuits are Scary

When a process server hands you a summons letting you know you’re being sued, or when you find out in some other way, if you’re like most people you will be terrified. It may be something you have feared for a long time, or it could be coming from straight out of the blue, but as Oliver Wendell Holmes (an early Supreme Court Justice) put it, next to death, most people fear being sued the most. It’s scary because it’s time-consuming, confusing, and seems to open a door to nearly unlimited expense and grief.

The “Bartleby Defense”

A lot of people respond to that by pretending that nothing happened – you aren’t being sued, and the service of process was just some sort of terrible mistake. Or – – you can simply “decline” to accept service. According to this idea, you can just tell the process server to go away – you’d rather not be troubled by the lawsuit (the “Bartleby Defense” – named after the character in Herman Melville’s story, “Bartleby the Scrivener, who found that he “preferred not to” do all the things that would have given him a normal, happy life). If you do this, you won’t be troubled by the lawsuit, and it will go away. The problem is, you will soon be troubled by a judgment and by people trying to seize your bank accounts and garnish your wages. And with the judgment against you, they’ll be able to do that, and you probably won’t be able to stop them.

Get Back to the Good Life

The Bartleby Defense invites years of misery. Don’t do that. Seize the bull by the horns. There are things you can do to protect yourself and what you have. It doesn’t take a genius. Get our free report and start taking control of your life and this lawsuit. It isn’t rocket science, and anybody willing to spend some time and effort can defend himself or herself. Learn how to do this and to get back to good life you always wanted. A life where you get the benefits of your work, where you can pick up your phone without worrying about it being a debt collector.

Responding to the Suit

In this article we’re going to talk about filing a response to the lawsuit. We have some videos we’ll show you on Answering and defending yourself. We’re going to talk a little bit about your choices of how you defend yourself, and I want to give you some “caveats” to consider.

Then we’ll get to the Answer so you can see how that’s done. Our point here is to “orient” you to the lawsuit so that you have a basic idea what to do. Our materials are designed to help you through the lawsuit and let you represent yourself the whole way if you choose.

In our next article we’ll move on to the other phases of the program

You’ve Been Served a Law Suit – What Now?

As we’ve discussed in other videos, if you’ve been served with a lawsuit, you have only four basic choices. If you’re here, we’re assuming you’ve decided to fight one way or another, and if your second decision was to hire a lawyer, you should let him or her guide you in making the other decisions. We’re going to assume, for purposes of this series of messages, that you have decided to represent yourself – or that you want to learn more for yourself even though you’re getting a lawyer. That’s always a good idea.

If you are going to do this, you will have to decide whether to attack the court’s jurisdiction over you or not. If there was something fishy about the way you got served, our materials can help you with a motion to quash service, but that is beyond the scope of this informational series. We don’t have a specific product for just this motion because it is highly fact-specific and depends heavily upon state laws of civil procedure – and because it is just a first step in a litigation defense. If you need help attempting to quash a lawsuit, you will also need help in defending it the rest of the way. You will need the Debt Defense System.

Most people actually do not need to concern themselves with motions to quash – most process servers get the job done right, and so your next decision is whether to attack the suit through a motion to dismiss or to file an Answer.

Here’s a brief video on Motions to Dismiss.

 

 

Motions to dismiss are filed for a variety of legal reasons, and again they are too fact specific, and depend too much on your own state’s laws, for us to be able to demonstrate here how you would do such a motion in your case if you think there is one. The Debt Defense System materials do help with that, and we would just suggest that you check your rules of civil procedure to see if you need to be filing a motion to dismiss before answering.

What we’re going to do today is show you how to file an Answer and Counterclaim. The Answer is pretty generic and will probably be easily applicable to your situation. The counterclaim may or may not apply – it would depend on whether you are being sued by a debt collector, and if so what, if anything, it has done wrong. So you should definitely not just cut and paste the counterclaim part of this message. The Debt Defense System will help you look at debt collector behaviors that might have violated the Fair Debt Collection Practices Act (FDCPA) and file a counterclaim if you have one.

Here’s a warning

Deciding to represent yourself is not quite a one-way decision. That is, it is possible to find a lawyer,
sometimes, if you start representing yourself, but it can be very difficult. Many lawyers will not touch
a case where the client filed anything. And many will charge you the same, or even more, than they would have if you had never filed anything. That’s because if you file something, the lawyer has to spend time reviewing that to see whether you’ve made any damaging admissions and what, if any, response the other side has made.

So if you’re thinking that you will represent yourself for a while to save money and then turn it over to a lawyer, you should consider that carefully – getting a lawyer to come in at the last moment is hard and not necessarily a good idea anyway. And may be more expensive than hiring one in the first place.

If you think you need a lawyer and can afford one, get one now – that’s my advice.

On the other hand, you can do this – and if you think you need to do any of it, better to plan to go all
the way if necessary. Most cases don’t go to trial, but if yours does, we will have you ready for it. As a pro se defendant you do have certain advantages going for you, and if you are willing to work at it a little bit, you can do this as well as most lawyers would do it.

Even if you have a lawyer or plan to get one, our materials could still be for you. It is a reality of legal life that lawyers charge for their time – and if yours is not charging you for his or her time, they’re either preferring to keep the chat down to a minimum or are spending less time on your case. Either of those could be unsatisfying. An educated client is a good thing.

Answering the Petition

Answering the Petition

Okay – so what is an Answer? It is your formal reply to the lawsuit. If you’re being sued, the debt collector is saying you owe money and, at least in general, why.

Your Answer is basically going to deny that. You’ll see a sample answer below. Notice how brief it is, in the first place. Doing an Answer is easy. Notice that there’s no hifalutin talk, nothing fancy. They say you owe money. You say you don’t.  The point of the Petition and Answer is to establish what will be the main points of dispute of the lawsuit.

Notice also that the sentences or paragraphs are numbered. Those numbers correspond to specific paragraphs (called “allegations”) in the debt collector’s suit.

You won’t argue over your name and address or residence in most cases, but you will dispute the debt collector’s ownership of the debt, the amount, and the claim that you owe anything. And anything else that makes sense to object. The hurdle here should be very low. You will likely dispute almost everything.

You don’t swear to your Answer, and you aren’t required to admit anything. You are setting out the factual points you want to make the other side prove.

Solving Debt Going Forward

Debt Negotiation and Settlement

This article talks about what I guess you might call the second-to-last piece of the bad debt puzzle. In the first couple of articles of this series we talked about getting sued and either getting a lawyer or representing and defending yourself. We got you started on that. Then we moved on to credit repair. In a way, maybe, that was taking things out of order, but everybody being sued for debt will eventually need to fix his or her credit report, and probably for many things other than just the lawsuit.

We discussed the ethics and morality of credit repair because many people we’ve talked to over the years have been burdened by their ethical and moral concerns – guilt, really. The debt collectors  encourage guilt because it makes people easy to handle. Tomorrow we’ll move on to something a little more “esoteric” you might say: lifestyle.

But today, as I say, we’re going to discuss debt negotiation.

 

Pretty much everybody knows what debt negotiation is, at least in theory. It goes like this. Obviously there’s somebody who says you owe a bunch of money, you negotiate, and you end up paying either less than or none of what you supposedly owe. That’s the view from a mile up.  Sweet, isn’t it?

It sounds like free money, but it really isn’t. If you think of it as an opportunity for something free, you will not be able to do it – you’ll be left wondering what went wrong as your financial security goes out the window. Instead, debt negotiation and settlement is cross between a hard-nosed, back-room negotiation and a game of “chicken.”

So What Are You Negotiating? What Are You Settling?

You know, it’s interesting that people rarely ask what debt negotiation is all about – what are you “giving up?” What are they getting in return for the large amounts of debt you hope for them to give up? Suppose you owe a credit card company $20,000 and you have been making the minimum payments most of the time – but sometimes you can’t, so they have hit you with a bunch of fees, and you’re watching the debt pile up at an incredible rate. What do they get if they agree to take a single payment of $1,500?

It feels like you’re stuck – there may be no way you can make payments that would significantly reduce that debt. So what do you have to negotiate with? A whole lot of “nothing.”

You have risk and the difficulty of collection. In other words, you have the fact that unless you agree to pay and really try to do it, they will likely get nothing at all – or will get much less than they could.

That doesn’t sound like much, does it? And yet it is much more powerful than you might suppose. Anybody you owe a lot of money to is feeling the pinch. Even a large credit card bank, which doesn’t need your money for its survival by any means, is watching that debt mount and realizing that every time it gets higher, you get less likely to pay it. At the bottom of your options may be the possibility of bankruptcy, but they know that long before that you will simply stop paying and dare them to sue you.

In essence, that it what makes debt negotiation work. You stop paying them and dare them to sue you – and then you offer to pay them again, only much less. Sounds crazy, doesn’t it? But it works if you take it seriously and don’t think of it as some sort of gold mine or a way to “get away” with something.  Instead, think of it as a significant part of a serious turn-around in your life. It has several costs – you should have no doubt about that, and it is something you do when there are no better choices available. There’s a chance that withholding payments will result in your being sued, and it almost certainly will result in at least a temporary trashing of your credit report. How you manage these risks and costs will determine, more than anything else, how well you do in negotiation.

There are ways to make it work much better than others, though. There are things you can do to manage your risks of being sued, and when the negotiations actually begin, a few techniques that can help. The main thing about debt negotiation and settlement, however, is that it, like other kinds of negotiation, is much less about negotiation than positioning. People only give you what you want because they believe it is the best outcome for them, too – the question is, how to do you give them that feeling when you’re asking to pay ten cents on the dollar of debt? And how do you make the risks to yourself “acceptable?”

How you answer those questions will determine how good a deal you get from your creditors.

 

Regulation of Debt Collectors

Debt Collector Licensing and Regulation Requirements

Most states require debt collectors to register with them in order to do business with people within their borders. As of the time of this writing, the states below have this requirement. You should look up the law for your own state and check with your attorney general to see if the collector bugging you is obeying this law. Somewhat incredibly, this law is also frequently ignored by the debt collectors, and this may be, and probably is, grounds to get a lawsuit dismissed and also be a violation of the FDCPA. It may also trigger regulatory enforcement action.

States Requiring Licensing, Registration, Exam, and/or Bond

Alaska, Arizona, Arkansas
Colorado, Connecticut
Delaware
Florida
Georgia
Hawaii,
Idaho, Illliois, Indiana, Iowa
Louisiana,
Maine, Maryland, Massachusetts, Michigan, Minnesota
Nebraska, Nevada, New Jersey, New Mexico, New York in some cities, North Carolina, North Dakota
Oregon
Puerto Rico
South Carolina (business license required)
Tennessee, Texas
Utah Washington, West Virginia, Wisconsin, Wyoming

States Requiring License Tax

Alabama

No Bond or License Required

District Of Columbia
Kansas, Kentucky
Mississippi, Missouri, Montana
New Hampshire
Ohio, Oklahoma Pennsylvania
Rhode Island
South Dakota
Vermont, Virginia

You should check on the requirements for you state and, if they are not met by a debt collector contacting you, take appropriate action.

Why Credit Repair is Right – and You Need to Do it

In this article we discuss something that almost everybody will need going forward: credit repair. This is a relatively new focus for our site because it steps away a little bit from the Fair Debt Collection Practices Act and focuses more on the other side of debt trouble – what it does to you in the long run financially. Of course everybody reading these words knows how much anxiety and trouble being sued can make for you, but the longer term effects may not be quite so much in your face right now.

Still, the price of bad credit information is big, and it adds up over time in ways that matter. A bad credit report may not scare you as much as a lawsuit right now, but it drains your hope and adds costs to everything you do.

So what is in your credit report? Obviously it includes information from your credit-involving transactions. But it also includes “lifestyle” information like judgments or liens, arrest and conviction records, and even job investigations under some circumstances. Actually, very little is safe from the reports.

Let’s be blunt here. There is a lot of wrong or expired information out there on most people’s credit reports, but there is also a lot of true information that might be hurting you. We are not concerned here with whether the information is true – our only goal is to help you remove bad information. Like debt law, the businesses and systems that control the process are set up to handle people in mass – this gives you an opportunity to remove harmful information. We think this is both moral

and ethical.

 

We do consider the moral and ethical questions as separate questions. Think of the moral question as involving the bigger questions of right and wrong – is it morally right for you to try to get rid of “bad” information from your credit report even when it’s true? In our opinion it is because you did not ask for credit reports to be pervasive and all-intrusive. The reporting system makes many mistakes, includes false negative information and does not include all positive information, and exists to serve the interests of people who are opposed to you in economic transactions. Why should you be forced to play their game? But if you are forced to do so, why shouldn’t you do the best you can within the rules?

Ethically, the rules are designed to let you challenge information – other people will be doing as much as they can, and the companies using the reports will assume you are doing so. If you don’t, you’ll be overcharged.

We think you should use every tool at your disposal to repair your credit report. Our Credit Repair Manual is designed to guide you through the process, showing you what information to attack and how to do it. In some cases there are things you should not do if you want to increase your chances of winning, and we show you those things and discuss them as well.

Negotiation and Settlement of Debt

This article talks about an important piece of the bad debt puzzle: debt negotiation and settlement.  Ideally this can occur without litigation – but you must be aware that if you decide not to pay someone what you owe – or they think you owe – you could get sued.

 

Pretty much everybody knows what debt negotiation is, at least in theory. It goes like this. Obviously there’s somebody who says you owe a bunch of money, you negotiate, and you end up paying either less than or none of what you supposedly owe. That’s the view from a mile up.  Sweet, isn’t it?

It sounds like free money, but it really isn’t. If you think of it as an opportunity for something free, you will not be able to do it – you’ll be left wondering what went wrong as your financial security goes out the window. Instead, debt negotiation and settlement is a cross between a hard-nosed, back-room negotiation and a game of “chicken.”

So What Are You Negotiating? What Are You Settling?

You know, it’s interesting that people rarely ask what debt negotiation is all about – what are you “giving up?” What are they getting in return for the large amounts of debt you hope for them to give up? Suppose you owe a credit card company $20,000 and you have been making the minimum payments most of the time – but sometimes you can’t, so they have hit you with a bunch of fees, and you’re watching the debt pile up at an incredible rate. What do they get if they agree to take a single payment of $1,500?

It feels like you’re stuck – there may be no way you can make payments that would significantly reduce that debt. So what do you have to negotiate with? A whole lot of “nothing.”

You have risk and the difficulty of collection. In other words, you have the fact that unless you agree to pay and really try to do it, they will likely get nothing at all – or will get much less than they could.

That doesn’t sound like much, does it? And yet it is much more powerful than you might suppose. Anybody you owe a lot of money to is feeling the pinch. Even a large credit card bank, which doesn’t need your money for its survival by any means, is watching that debt mount and realizing that every time it gets higher, you get less likely to pay it. At the bottom of your options may be the possibility of bankruptcy, but they know that long before that you will simply stop paying and dare them to sue you.

You Often Get their Attention by Stopping Paying them

In essence, that it what makes debt negotiation work. You stop paying them and dare them to sue you – and then you offer to pay them again, only much less. Sounds crazy, doesn’t it? But it works if you take it seriously and don’t think of it as some sort of gold mine or a way to “get away” with something.  Instead, think of it as a significant part of a serious turn-around in your life. It has several costs – you should have no doubt about that, and it is something you do when there are no better choices available. There’s a chance that withholding payments will result in your being sued, and it almost certainly will result in at least a temporary trashing of your credit report. How you manage these risks and costs will determine, more than anything else, how well you do in negotiation.

There are ways to make it work much better than others, though. There are things you can do to manage your risks of being sued, and when the negotiations actually begin, a few techniques that can help. The main thing about debt negotiation and settlement, however, is that it, like other kinds of negotiation, is much less about negotiation than positioning. People only give you what you want because they believe it is the best outcome for them, too – the question is, how to do you give them that feeling when you’re asking to pay ten cents on the dollar of debt? And how do you make the risks to yourself “acceptable?”

How you answer those questions will determine how good a deal you get from your creditors.

 

Discovery in Debt Law – Our Discovery

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