Tag Archive for: debt

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.

Being Sued for Debt

Being Sued for Debt

If you’re already being sued for debt – that is, they’ve filed suit against you and served you (or you have found out in some other way) – you have an immediate decision to make. You could give up and let them get a judgment and take your money if they can find it. Or you could defend yourself.

It makes all the sense in the world to defend yourself.

You may think that lawyers wouldn’t file a law suit if they didn’t have the evidence to prove it, and in most kinds of cases that would be correct. Lawyers don’t want to waste their time on bad lawsuits. But in debt law it’s different. In debt law, the debt collectors take hundreds of alleged debts and file suit in all of them (if they want to) without ever looking to see whether they have any evidence that’s any good. They do that – and you might even say the HAVE to do that – because they know that almost all of the people they manage to get served with the lawsuit will give up. When you never have to fight to win, making sure you could win the suit is a waste of time. So they don’t.

As a matter of fact, you have an excellent chance of winning if you fight the debt collectors, and you can do that in one of two ways. You can either hire a lawyer or represent yourself (this is called “pro se” representation).

Going “Pro Se”

While I have always considered hiring a lawyer who understands debt law and will be aggressively on your side as the best way to defend yourself if you can afford it, there are two problems with it. First, it is almost always pretty expensive, and it can be very expensive sometimes, And secondly, it can be difficult to find the right lawyer – and it isn’t always easy to tell who is the wrong lawyer.

It can make sense to represent yourself. This type of law is not extremely complicated, and the debt collectors are often lazy or simply do not have and cannot get what they need, to beat you. If you want to take this route, then I suggest that you get one of our memberships. That will give you information and backing you can use all the way through your defense.

Hiring a Lawyer

I have always considered hiring a lawyer who knows debt law as the best option when you’re sued for debt if you can afford it. As I mention above, the challenge can be finding a lawyer who is experienced in debt law defense and who is not too expensive. I believe I have found a good option for that – a prepaid legal plan specializing in debt defense. If you think you would like to hear about this plan, check out our information on prepaid law.

How Debt Troubles Start

Life History of a Debt

This continues the series of videos for people being harassed or sued for debt, and in this video we’ll look at the way debts evolve – from bills you can pay without problem, to bills you do have problems paying (or don’t want to pay), through the “charge-off” and sale of the debt to the debt collector.

Tomorrow we’ll lok at the “moral” duty to pay debts, and then we’ll move on to possible solutions to debt troubles.

_________________

Foreclosure Fraud

Foreclosure Fraud – Are They Ripping You Off?

As I have argued a number of times, banks seeking foreclosure have been hampered by the “alphabet derivatives” known as “MBS’s” (mortgage backed securities). Often, banks seeking to foreclose on allegedly defaulted mortgages do not own the title to the property in dispute and cannot find it, and therefore cannot (legitimately) pursue their foreclosure actions. It seems that some lenders may have found a convenient way past this objection: systematic fraud.

Fraud in New York

On August 17, 2010, a federal class action suit was filed on behalf of tens of thousands of New York State homeowners who lost their homes to an alleged foreclosure fraud orchestrated for years by a  “foreclosure mill” attorney and major mortgage companies. The case is “Connie Campbell vs. Steven Baum, MERSCORP, Inc, et al.”, Case #10CV3800, filed in the U.S. District Court for the Eastern District of New York. It claims there were various lending and Fair Debt Collection Practices Act (FDCPA) violations and that homeowners paid inflated foreclosure and other fees made up by Mr. Baum on behalf of his clients, the lending institutions.

The alleged foreclosure scheme came to light after the class plaintiff lost her home to a foreclosure filed by Baum for HSBC even though the loan had never been assigned to HSBC. A “Satisfaction of Mortgage” was eventually filed by a company named MERS,  showing that HSBC never owned the loan, and the foreclosure complaint should have never been filed in the first place.

Perhaps tens of thousands of New Yorkers alone have been thrown out of their homes into the street through fraudulent foreclosure actions. As investigations have continued, it has become increasingly clear that the foreclosure violations are rampant and nationwide.

Just Who Are the Barbarians at the Gates of Rome?

Some time ago a prominent social commentator likened people opting out of their non-recourse loans to “barbarians at the gates of Rome.” And last year there was a lot of argument about the morality of individuals pursuing this right for which they had negotiated and paid. Supposedly, these people were taking unconscionable advantage of the poor lenders.

As I pointed out at the time, for people to exercise the rights which they negotiated for against well-heeled and sophisticated lenders was hardly a sign of the “break down” of law and order. It was, in fact, simply the legal process working as it should. In this case in favor of the homeowner rather than the banks, for a change. All the morality talk was designed to hoodwink the public into blaming the homeowners rather than the banks, who for years deliberately fostered lax lending practices as a way to inflate prices and increase their profits.

The Sound of Silence

Let’s just say the silence of these self-appointed guardians of morality about the revealed practices of the lenders affecting tens of thousands at least, and possibly many millions of homeowners defrauded and rendered homeless is positively deafening.

Defend against Motions to Dismiss Part 1

Hey there! This content is available to MEMBERS only! Consider registering for an account.

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.

 

Easy Way Out of Debt

Is there a “Silver Bullet” to Debt Collectors?

In mythology, one of the few effective ways to kill magical creatures is with silver, and so a “silver bullet” is a semi-magical response to stop something bad. Is there a silver bullet approach to the debt collectors? Is there something you can do, with little effort, that will just make them go away? There seems to be a cottage industry of people selling that sort of easy one-size-fits-all solution.

The debt collectors make their living off that kind of thinking.

There are NO Free Lunches in this world, but you have a great chance

You have to stay away from magical thinking if you want to have a chance when the debt collectors sue you. Fortunately, theirs is a business that is set up like a factory, and if you put in a little effort, you can find and do the things that work. They do take some effort, and they won’t always win, but there are things that make you much more likely to win than to lose. And once they see you’re ready to stick to it, they may very well walk away from the whole thing.

After all, they make their money off people who don’t fight or don’t know what they’re doing. We help you do both, and your chance of winning is very, very good.

As we often say, around 90 percent of people being sued for debt do not defend themselves. Consider what that means: it means that it’s really more expensive for a debt collector to find out whether it has a good case against you – much less to build it and beat you in court if you fight  – than just to bring cases and dismiss them if things get tough. And that’s exactly what most debt collectors do. Therefore, rather than look for words to scare the debt collector away, it makes sense to build a tough defense that makes them work hard to try to beat you.

Do the things that give yourself a chance to win and the things that make it tough for them to beat you. Then you probably will win if they don’t walk away first.

 

Ending the Debt Nightmare 1-2

Read more

How to Calculate Student Loans

Are you considering getting a student loan? Do you have one already and happen to be considering your alternatives? You will be well-advised to use a loan calculator. This will allow you to determine the size of the payment you can live with – and we highly recommend you try not to underestimate how much misery loan payments can bring you.

How to Use the Calculator

We somewhat arbitrarily took $200 as the maximum monthly payment that would be tolerable. This number is based upon our own experience and what we’ve observed. Note that the payment schedule is for ten years. Considering what we’ve said about leverage, if you have a good job, it can make sense to make your payments over this long, or even longer, a period. But we hated every minute of ours, and the world is unpredictable, so the longer period exposes you more to the risk of losing your job or other changes. You could sign up for a longer period and make extra payments, and that is what we did.

In any event, in the example above, we chose $200 as the monthly payment, a 9% interest rate, and a ten year period (120 payments) and clicked on “calculate.” The calculator returned the “Loan Amount = $15,788.34” And so we know that we could not get a loan larger than that, on those terms without exceeding the $200 per month payment.

What if we could get a better interest rate, though? Suppose we got an interest rate of 5%? That seems almost free compared to the rates for credit cards! How big a loan could we get without going over our $200 payment ceiling?

As you can see, that yielded a loan total of $18,856.27. As we point out in our Student Loan Report, that’s about a fourth of the cost of one year at Harvard or Yale. So what if you ignored our warnings about length of payment schedule and went with a repayment period of 20 years (this would likely be half of your entire work life, so we almost hate even to mention it). How much could you borrow then?

We made the change by changing number of payments from “120” to “240.” In other words, you can borrow $30,305.06 if you agree to repay for twenty years. That’s still less than half a year’s cost of the Ivy League Schools, and under a year’s out-of-state tuition for most state universities. So let’s flex one last time, and consider doubling our acceptable payment amounts to $400 per month for twenty years. That’s way too much, in our opinion, but here are the calculations:

With a simple rate of interest, doubling the payments allows you to borrow twice as much. And so, for the price of $400 per month for twenty years, you can almost afford a year at an Ivy League school.

We deliberately presented the  information this way so that you would feel every cent and every minute. It is our belief that there are almost no circumstances where agreeing to anything like this makes sense. To see the real-life calculations facing the plaintiff (bankrupt person) in the Hixson case we refer to in our article on repaying student loans, please read A Case Study: The Choices Facing Hixson. In Hixson, the student got out of school with approximately $100,000 in debt and no job in his subject. It’s a pretty sad tale, but every person contemplating a student loan should consider it.

Link to a Loan Calculator

We have no connection to this calculator, but it will allow you to put in payment terms (number and interest rate) and determine how much money you could borrow; or it can help you take the loan principle and figure out how much you will have to pay – over a length of time you can set – to pay it off. In other words, this program lets you get a realistic handle on the amount of blood, sweat and tears your educational loan will cost. We hope it makes you take a hard look at the universities and their tuition rates.

 

We can help either way. Click on the Articles button on the menu bar above to go to publically available videos and articles,

Sitemap

Quick Links

Get In Touch

© 2025 Your Legal Leg Up, All rights reserved