Settling with the Debt Collector

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Giving Debt Collectors Money

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What is Case Worth to a Debt Collector

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What to Do if Sued for Debt

What to Do if You’re Being Sued for Debt

If you are being sued for a debt, you may be intimidated or even feel panicked. You may be considering giving up, but there is really no need for you to do that. You have an excellent chance to win if you will just fight a little bit. If you’re being sued on a  debt and want to know what your options are, watch this video.

If You Are Already Being Sued

If you are already being sued, you probably should not wait for anything. You need action now. You should be doing things to protect yourself NOW. You can beat them – it’s mostly a question of knowing what you need to do and doing that thing 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.

The purpose of our debt defense memberships is to help you know and do the things you need to do. And avoid the things that might hurt you.

I have had a great deal of experience both as a litigator and web master and have realized that almost every person representing himself or herself in a debt case would do much better if

  1. they have an opportunity, preferably on a regular basis, to talk to other people who can help them with insights and information; and
  2. a lot of the work done for them.

Our membership and resources do that. They certainly will not take all the work, or much of the learning, out of it, but any of our memberships will dramatically increase your chances of winning and reduce the amount of work you have to do.

If You Are Not Already Being Sued

If you are not already being sued, and want to try to negotiate with the debt collectors or creditors to clear up your credit report or make sure they do not sue you, then you may want our Debt Negotiation Membership.

Not all negotiation and settlement happens in court, you know. It is possible to contact many creditors and debt collectors to work things out without a law suit. But – whether there is a lawsuit or not, all negotiations occur “within the shadow of the law.” That is, in order to negotiate effectively, you need to know what their rights are, and what your rights are, in the law. What can they do to you if you do not settle? And what can you do to them? Knowing the answers to these questions helps you handle the fear and uncertainty that haunts so many people as they try to get a grip on their financial lives. You can find the answers you need.

And after you find the answers that lie behind the debts, you still need to know what to say and how to say it. You’ll find plenty of help with that, too. You see, it makes a large difference who you’re talking to and where in the debt collection process you are. We do not offer empty formulas, but rather solid understanding of what they are after, what you might want or get… and a few suggestions about how to say things so you’ll get them.

Four Sneaky Tricks to Get You to Default

Four Sneaky Tricks by Debt Collectors to Get You to Default

Debt collectors make their money by scaring, or tricking, people into forfeiting their rights to defend themselves. Often they will let you think you have come to some sort of agreement with them to avoid court (and judgment), they won’t work with you to accommodate your schedule, and general try to intimidate and scare you into staying away from court. Here are some of their more common tricks. Check out the Debt Defense System and materials for things you can do if debt collectors try these on you.

 

 

Four Dirty Tricks and What to Do about Them

Debt collectors use many dirty tricks to try to scam, threaten, trick, or intimidate you into paying. This video goes into a few of those, and what you can do about them.

In this video, we discuss four tricks and point you to the sections of the Fair Debt Collections Practices Act that makes them illegal.

It is illegal for the debt collector to threaten to take legal actions that it cannot legally do. This would include threats of imprisonment, public humiliation, or garnishment or seizure of your wages.

It is also illegal for them to communicate untrue information or, where you have disputed the debt, to report the debt without mentioning that you did dispute.

Sometimes debt collectors will pretend to be various types of authority figures – and sometimes they will send a collection letter that looks either like a lawsuit or a judgment or other information from a court. Any form of deception about who is sending the letter to you, whether that deception takes the form of an actual lie or simply deceptive looking information, would also violate the Fair Debt Collection Practices Act.

If you think the debt collector has violated the law, or if you need to defend yourself from a lawsuit, be sure to check out our Debt Defense System – it will give you what you need to understand what you are facing and the help you need to defend yourself effectively from the debt collectors.

Check out our Guide to Legal Research and Analysis

If You Are Already Being Sued

 

If you are already being sued, you probably should not sign up for the course and wait for anything. You need action now. You should be doing things to protect yourself NOW. You can beat them – it’s mostly a question of knowing what you need to do and doing that thing 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 can no those things with the Debt Defense System and get help doing the right things while avoiding the worng ones.

I have had a great deal of experience both as a litigator and web master and have realized that almost every person representing himself or herself in a debt case would do much better if (1) they have an opportunity, preferably on a regular basis, to talk to other people who can help them with insights and information; and (2) a lot of the work done for them. The Debt Defense System does that. When you buy the Debt Defense System, you will also get a membership which both allows you to use the full resources of Your Legal Leg Up’s website and participate in our weekly teleconferences where members speak to each other and Your Legal Leg Up’s staff.

Just think about how it will be, first when you walk away from the debt collectors who have been making your life miserable, and then as you move towards a life of greater freedom and happiness – free from debt, and free to build your future.

The Debt Defense System is a service designed to give you all the materials and support you will need to defend yourself from either the debt collectors or original creditors without having to hire a lawyer.

If You Are Not Already Being Sued

If you are not already being sued, and want to try to negotiate with the debt collectors or creditors to clear up your credit report or make sure they do not sue you, then you will want our Debt Negotiation System.

Not all negotiation and settlement happens in court, you know. It is possible to contact many creditors and debt collectors to work things out without a law suit. But – whether there is a lawsuit or not, all negotiations occur “within the shadow of the law.” That is, in order to negotiate effectively, you need to know what their rights are, and what your rights are, in the law. What can they do to you if you do not settle? And what can you do to them? Knowing the answers to these questions helps you handle the fear and uncertainty that haunts so many people as they try to get a grip on their financial lives. You can find the answers you need.

And after you find the answers that lie behind the debts, you still need to know what to say and how to say it. You’ll find plenty of help with that, too. You see, it makes a large difference who you’re talking to and where in the debt collection process you are. We do not offer empty formulas, but rather solid understanding of what they are after, what you might want or get… and a few suggestions about how to say things so you’ll get them.

Discovery key to victory in debt litigation

We talk a lot about how many debt defendants default on their lawsuits – or show up just to give up via settlement. It is also true that many debt defendants either feel so righteous or so helpless, or so confident for one reason or another, that they defend themselves without adequately preparing for the case. This is a recipe for disaster for these defendants – and hurts other debt defendants, too. That’s because the judges get used to substandard cases from debt defendants and stop paying attention.

And THAT’S on top of the fact that most judges identify with the wealthy – and are wealthy – or at least identify with the lawyers. The guy representing the debt collector may not have golfed with the judge, but chances are good that the judge has golfed with a friend of his.

It’s a club, and you’re not in it.

For you to have a chance, you have to do something to stand out and apart from all the other people filing through the courtroom every day. You have to take some action that will allow the judge to get to know you a little bit – just enough to pay attention to you and the law. And of course you must know the right law so that you can explain that other hurtle – the judge’s ignorance.

I’m Not Saying, I’m Just saying…

A lot of judges are quite smart, and some… not so much. But you must realize that judges handle potentially thousands of cases per year, and in the case of judges dealing with debt cases, that number could be in the tens or even hundreds of thousands, of cases. They’re busy, and they barely have time to learn the fine points of the law if they don’t already know them. And most of debt law is both controlled by the fine points of laws and rules, and unknown to most lawyers. There is a very good chance, in other words, that your judge DOES NOT KNOW the law you’re depending on. And he or she barely cares. How do you break through?

Discovery – the Key to Your Best Chance

Ironically, the debt collectors will always object to all or almost all of your discovery, and this will give you an excellent reason to learn much more about the law in a useful context. Even more importantly, it will give you a reason to practice talking to the court and an opportunity to make yourself known to the judge. And it gives you the excuse to start educating the judge on what HE needs to know in order to be fair to you.

You need to discovery to have a good chance to win. And if you do it, you also dramatically increase the chances that the debt collector will walk away from your case long before trial.

What to Expect your First Day of Court in Debt Defense

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Should you settle or fight with debt collectors

If you’re being sued by a debt collector and just received the “summons” (your notice to appear in court), you may be tempted to call the company and make a deal or not to go to court at all. People do this because they’re afraid, feel guilty, or think they can protect their money or credit reports if they are “reasonable” with the debt collector. It’s usually a mistake.

Let’s take these “reasons” one at a time.

FEAR

As you will see, there is little to fear if you stand up for yourself.

The Good

With a little help, you have a good chance to win the lawsuit even if it goes to trial. But whether or not you could actually win the suit, you may be able to raise the debt-collector’s cost of suing you to the point where it gives up long before the case goes to trial anyway. As one person put it:

Today I received in the mail an offer of “Stipulation for dismissal with prejudice,” which basically states the plaintiff will dismiss their complaint if I dismiss my counterclaim. It’s a done deal. Your litigation materials were clear, vital, and necessary tools for me to win…

Frank

And if your fear is that the debt collector will suddenly take your bank accounts or garnish your wages, then you should know that they cannot do that without a judgment, which they can only get by formally winning the lawsuit against you and getting a judgment.

The Bad

If you look at the “Petition” (the suit itself), you will see either that it does not seek attorney’s fees at all, or that it seeks about 15% of the overall amount for fees. The debt collector is seeking this amount whether or not you fight, and if you do fight, the amount will hardly ever go up. That’s true with all the other amounts being sought, too. Chances are, the suit is already asking for the most you could lose. Therefore you have little or nothing to lose by fighting.

And since you won’t have to pay the debt collector anything if you win, and you have a good chance of winning if you fight-if you know what you’re doing- then you have everything to win.

The Ugly

The debt collectors love to get people to sign “consent judgments.” That judgment means they could take the money in your bank accounts and start garnishing your wages if you miss a single payment. If you fight and win, there will be no judgment against you, and even if you lose or settle, chances are it won’t happen for many months. And usually the debt collectors will make a better deal with you later on than they will at the beginning. Again, you have little to lose, and much to gain, by fighting.

GUILT

Many people feel guilty about not paying the bill they’re being sued for if it looks anything like a bill they know they didn’t pay. Most people want to pay their bills. They want to do the “right thing.”

Remember that you never borrowed anything from the company that’s actually suing you, and they never did anything for you. The company you borrowed from sold the debt to debt collectors, usually for a very small fraction of the face amount. Therefore, giving the debt collector money does not help the people you actually borrowed from. And the people you’d be giving your money may or may not actually own the debt. Lots of people have been sued by people who didn’t even own the debt.

Debt collectors are scavengers who feed off the troubles of people having hard times. If you have some extra money, couldn’t you think of a better way to spend it?

CREDIT HISTORY

You may think that making a deal with the credit card company will help your credit score or make another creditor look on you more kindly. Unfortunately, this is probably not true. By the time the debt goes to the debt collector, most of the damage has already been done to your credit report. Just about the only bad thing left that could happen is a judgment. And most people who settle with the debt collector give it a judgment.

CONCLUSION

In reality settling is usually the worst thing you could do to your credit history. We think you should fight. But even if you do want to settle, the Debt Defense System will tell you how to do so without harming your credit history more than necessary.

Silence is Golden – Do not talk to debt collectors – part 1

Debt collectors ask a lot of questions. How much information should you “share” with debt collectors? How many questions should you answer? It all depends on what you’re trying to do and where in the process you are. This video should help you figure out what you need to say, when, and to whom.

Should I talk to a Debt Collector? What Should I Say

If you are being called or harassed by a debt collector, one of the purposes of that debt collector is to get you to talk. Should you? This is going to depend on whether you have anything to say.

Debt Collectors Target Struggling People

As I have mentioned before, the debt collection business is targeted at distressed people. The debt collectors already know you don’t have much money, and they know you probably have other people trying to get money from you. Their job is not to force you to pay somebody—it’s to force you to pay them. Another way to put that is that they are not competing with you—they’re competing with other debt collectors. You are the football in a game between the debt collectors, the string in a game of tug of war. Does that make sense?

Silence Can Be Golden when Dealing with Collections

The job of the debt collector is to get you to pay them instead of someone else. They can do this either by annoying you so much that you pay them to get them off the phone or by establishing a sympathetic connection to you so you gladly do it for the voice on the other end of the line. Both of these methods involve keeping you on the phone and the connection open, and neither of these methods is directed at your well-being. Also, if they can get you to reveal information about your job or bank, or any kind of assets you have, they can improve their chances of making you pay against your will. So unless you have your own purpose for communicating, you shouldn’t do it.

Sometimes it Makes Sense to Talk to Collectors

What might be a good reason for you to communicate? Well, because you want something tangible from the debt collector to whom you are speaking. You could want them to reduce interest rates, waive penalties, agree not to give information on your debt to the credit reporting agencies, or any number of actual, materially beneficial things. If you’re hoping to get a friendly voice or understanding, a debt collector is the wrong person to talk to: they already understand everything they want to know about your situation. Talk to someone else for that.

Negotiate—And Get It in Writing

Don’t be afraid to negotiate. You can ask for anything from them, and in most cases the debt collector could give you anything you might request. So be bold. If you want to settle for ten cents on the dollar, you can ask. They may laugh—but laughter is just a part of the negotiation and doesn’t mean they won’t do it. And if they agree to do anything, you must get the agreement in writing. In a practical sense, it doesn’t count if you don’t get it in writing. You won’t be able to prove it, and in some cases an oral “modification” would not even be legally recognizable even if you could prove it. It must be in writing.

They’ll want something in return. An immediate payment, an agreement to pay by a certain date, something. You can agree to this if you can do it, but you’re spinning your wheels if you cannot, so it makes sense to limit your promises to things you’re sure you can perform. Don’t over-commit, as this may negate the agreement you reach and will almost certainly increase the number and hostility of the phone calls you are receiving. Remember that the debt collector is keeping records of everything you say (so don’t tell them where you work or bank).

Stop Talking to Collectors When You’ve Said What You Need to Say

And when you run out of reasons to keep talking to the debt collector, make sure that you actually stop talking to them. There is always a price for anything you say – you’re giving them free information that they will use to decide to sue you. Sometimes talking to them is worth that price, but if that changes, you should feel no obligation to keep talking.

This is part 1 of this article. Click here for part 2.

Silence is Golden – Part 2

I mentioned the mini-Miranda right in Part 1 of this article, and I have already spoken several times about the importance of silence. Why do I keep mentioning this? That’s right – because people forget it so often. Debt trouble erodes our confidence and makes us self-conscious. Debt collectors like to use your sense that you are failing in some important, moral way, when you don’t pay, to push you around. And people like to “tell their story” and make themselves understood.

Save it for the jury

Nothing you can say to the debt collector will help you in any way. You won’t persuade them you are good, that your debts are unreasonable or unmanageable, you can’t hurt their feelings in any way that helps you. You can’t cause them to delay or decide against taking any significant action.

And almost everything you do can, by contrast, be used against you one way or another. Asking for a little extra time to pay the debt? That’s an admission the debt is yours to pay. Asking them to reduce the interest rates? That’s a form of negotiation which may eliminate their need to prove any specifics of the debt and may extend the statute of limitations significantly. Say something to try to hurt the feelings of the debt collector who has been calling you several times per day? That’ll be something you hear back at trial.

If your debt troubles are going to persist in any significant way, you need to close your mouth.

Don’t Talk to the Debt Collection Lawyer

And you need to keep it closed if they sue you. Talking to the debt collector’s lawyer only magnifies the chance that you’ll say something that hurts you. In that situation, not only can you say something that damages your case, you can make an admission that kills it. I can’t tell you how many people have told me that they “told the lawyer the debt was there’s but…”

If you admit the debt to the lawyer – or to anyone on the debt collection team – you may be letting them off the hook of proving they own the debt or that you owe it. Once that happens, you will find their willingness to reduce the amount they want you to pay much harder. That’s because until they prove that you owe them the money, they must consider the risk that they cannot prove these things and, further, consider the cost it would take to prove them. These are major risks for debt collectors who do not have any original records and only the sketchiest information on the supposed debt. Solve these problems for them and you triple the value of the debt. Now they only have to worry about the expense and delay of forcing you to pay.

And you must also keep your mouth shut to the judge

In many ways, this is the toughest. Judges are stern, and they’re accustomed to having almost complete control over the people in their courts. This makes it extremely difficult and even risky to refuse to answer a judge’s question. Instead, you must be a master of double speak. If the judge asks you if this was your account you’re being sued for, you have to say something like, you’re not sure, but you don’t think the plaintiff has or can prove it. And then you say you’re not sure they can prove they own the debt or how it was accumulated. If the judge asks whether you dispute the amount of the debt, again you point to the debt collector’s duty to prove it. “I’m not sure what the debt, if any, was,” you say. “But it’s the debt collector’s job to prove it, and they can’t use hearsay…” It is your right to dispute the debt and require the debt collector to prove its case. Don’t let the judge’s desire for an early lunch hour keep you from insisting on that right.