by T Rexx Hogan

Have you ever wondered why debt collectors typically call so many times before they sue you? You know it isn’t really because the collector likes you or has a soft spot in his heart for you, right?

Have you wondered why, even after they filed suit, they would usually willingly settle for less money than they’re suing you for? Again, you have to count your personal charm out of the equation. They’re probably not doing something special for you individually.

So Why do Debt Collectors Settle for Less?

So why do they do it? The answer is easy: they would much rather you gave them your money than have to work hard to get it. Proving you owe somebody money in court can be hard. Finding a person’s job or bank accounts and collecting that money can be harder.

The Dirty Little Secret

The dirty little secret of debt collection is that it’s much more about economics than “law” or anybody’s “legal rights.” Sure it’s difficult for you to find a lawyer familiar with this area of the law, and if you can find one it’s almost impossible to get him or her to represent you at a cost that makes it worth fighting.

What the debt collectors don’t want you to know is that it isn’t cost-effective for them to sue you, either! If you fight even a little bit, it will cost them more to keep going after you than they stand to win. They don’t want you to know you can turn the tables on them–even without an attorney.

Other Things You Really Need to Know

They try to use fear tactics to make you give up and hand over the cash. They won’t tell you they can’t garnish your pay check or take your bank accounts unless they already have a judgment against you. They won’t tell you something else you should know either–that if you give them a “consent judgment” as part of a settlement, they can immediately take your paycheck and bank account if you’re even a day late on a payment. These guys don’t play, and they won’t wait–even a single day. They won’t tell you that they’ll charge you attorney’s fees and trash your credit report even if you give up. No one will tell you that the debt collector’s fees almost never go up–even if you fight.

They won’t tell you that if you know how to fight you’ll have an excellent chance of making them go away or winning the suit. That’s what drove me to create this site and these products. It’s about time somebody told you the rest of the story.

If you’re being sued for debts, you may panic and look for the easiest way out. Bankruptcy may seem to be a solution because actions by the debt collectors are “stayed” (stopped) during the bankruptcy proceedings. But is it the best choice? I believe there are much more effective ways to handle old debt, especially credit card or merchant account debt (old bills from gym memberships, department stores, telephone companies, etc.) that has been sold to a debt collector. Panic is not necessary, and bankruptcy is often not the best solution in a real-world sense. Here’s why.

Debt is divided into two types: “secured,” and “unsecured.” Secured debt means that the debt has specific assets backing it (home loan, car loan). If you miss payments, you can have your house foreclosed or your car repossessed and sold to pay off the loan. These things “secure” the debt and can be sold if you stop making payments. The problem with bankruptcy is that it doesn’t provide much protection for secured debts. The courts generally regard the security as the property of the lender and consider it unjust to let you keep it if you don’t make the payments. So they often “relieve” the stay and allow the lender to foreclose.

Unsecured debt (credit cards, merchant accounts, etc.), on the other hand, is debt that is not secured. It isn’t attached to any specific assets. This means you must be sued personally before the debt collector can collect any money from you. Debt collectors often don’t mention this fact to people they are harassing, since they want you to believe you could lose house and home at any time. Remember this: on an unsecured debt, the debt collector can only collect if it can get a judgment against you. Then it can collect money by “enforcing” the judgment. They can garnish your wages or attach (grab) your bank accounts. But this can be difficult for lots of reasons.

With unsecured debts in bankruptcy–unlike secured debts–the debts are simply added up and paid according to how much money the bankrupt person has after everyone else has been paid. So bankruptcy could offer some help with unsecured debt. But…

Before you go that route, you should consider that you have an excellent chance of beating the debt collector. You can defend yourself from the collection suit of an unsecured debt (without the harm that bankruptcy does to your choices in life). And if you try to defend yourself, but don’t win, bankruptcy still remains an option. They can’t collect till after they get a judgment, and bankruptcy could still stop the collection process at that point.

Better results, less cost, little risk. That’s why it’s often better to defend yourself against credit card debt than to seek bankruptcy protection. For help in defending yourself if you’re being sued, check out our products.

It is your key to understanding the legal phase of the debt-collection process and the heart of your defense. If you want to drive the debt collectors away from your door, you’ll need these materials.

The Action Handbook itself is 174 pages long, plus Appendices of laws and rules of civil procedure and evidence. I wrote every page of the Handbook based on my years of litigation experience. I frequently revise and update the materials, so the Handbook may be a little bit longer by the time it gets to you.

The Handbook was written specifically for non-lawyers who were either being sued or threatened with suit by debt collectors. People who either wanted to understand the process if they had already hired a lawyer, or who wanted to take on the debt collectors themselves. These are ordinary people for the most part. People I know because I have represented hundreds of them before. My clients always knew me as someone who could talk to them in a way they could understand. I’m sure you’ll find the same thing.

The Action Handbook will explain the the debt litigation process from beginning to end.. It will map out the litigation process in a way that leaves you comfortable with your role in it and prepared to defend yourself. And it will reveal the main weaknesses of your adversaries, the debt collectors.

You’ll know what generally to say to the courts. You’ll understand motions. Evidence. Civil Procedure. And you’ll know some of your rights against the debt collectors.

Specifically, it will show you:

• how to write and file an answer;
• how to consider your defenses and plan to make them work;
• how to conduct “winning” discovery—that is, get the information you need to win from the debt collectors themselves;
• how to defend against motions brought by the debt collectors to try to “knock you out of the box;”
• What to expect, how to act, and even what to wear for court appearances;
• what constitutes evidence in your case and how to get it;
• how to avoid some of the deadliest traps set by the debt collectors.

And much, much more. It will give you your best chance of making the debt collectors leave you alone for good.

MY GUARANTEE

The Action Handbook is completely guaranteed. I can’t promise you’ll win your case because things do happen, but I can promise you that if you find any of my products unsatisfactory for any reason you’ll get 100% of your money back. These products will be worth many times what you pay for them. I guarantee that.

These are original materials.

A lot of internet materials are just compilations of materials you could find for yourself. They may be worth buying because they’ll save you time, but the materials on my site are not like that. Because I wrote them myself, I know that you can’t find this information anywhere else on the web. It isn’t borrowed, bought, “compiled” or collected: it was written specifically for you.

Plus I tell you how to find some of that free information out there for yourself, too. Because sometimes you will also want different views on a subject. Debt law isn’t extremely complicated, but that certainly doesn’t mean that there aren’t people with different views on the most important legal issues. And you’ll want to know about some of them sometimes.

You will be prepared to defend yourself and kick the debt collectors in the teeth. I guarantee that.

My Challenge

Millions of people are being sued by debt collectors every year, and maybe 80% or more of the people being sued will not respond to the suit and will have a default judgment entered against them. Or else they’ll just give up.

I know from experience that the debt collectors couldn’t make most of those cases stick if the people they were suing would fight back. I also know that people could fight back with the materials I offer.

Half Off the Price for the Video Package

I will give you half off the price of the video package–including the videos, the Litigation Handbook, and the Forms–if you will do three things for me:

• Keep me informed of any questions or issues that come up during your case that the litigation materials do not already apply to or explain. This will give me a chance to answer your question and update the materials so they are more helpful to others;
• Give me a testimonial when you drive the debt collectors away so I can use it in my marketing; and
• Refer other people who might need the product to my website.

If you will do these things, I will sell you the Video Package for 49.95.

While there is no practical difference between “debt buyers” and “debt collectors,” “original creditors” are a different story altogether. Original creditors are the business that originally generated the debt by extending you credit in some way. Because they have a direct relationship to the purchaser, the law treats them very differently than it does debt collectors.

How Debt Arises

Debt can arise in a number of ways. If you buy a club membership, for example, and then stop paying on it, the club is the original creditor (having extended you “credit” for the monthly dues). If you stop paying, the club will bug you for a while, and then they may send the account to a debt collector to bug you some more. Eventually, they may sell the debt to another company.

Debt Collectors

If a company deals substantially with debts generated by another person or company, it is a “debt collector” legally, whether it is a debt buyer or otherwise.

Defending against Original Creditors or Debt Collectors

Defending yourself against original creditors is not more difficult than against debt collectors, and the legal process itself is basically the same. Defending yourself means answering the petition, showing up in court, responding to discovery, and looking out for yourself. You’d do all the same things whether the person suing you is the original creditor or a debt collector. But there are real-world differences.

If it is an original creditor suing you, that means that records will not have changed hands, and that of course dramatically increases the chance that they still have them, although some companies routinely destroy old records. Also, you have some legal rights against debt collectors (under the Fair Debt Collection Practices Act) that you don’t have against the original creditors. So in general your chances of winning are less against the original creditors. But it can still make sense to fight the case.

There are some slightly different reasons for this as opposed to when you are dealing with debt collectors.

Original creditors are in business to do…their business. That means they are not really designed to chase debt defendants, and they don’t do it as efficiently as debt collectors. Plus, they don’t like to do it (in general) and it damages their reputation in the community.

In my experience, original creditors take things a little more personally and are not happy about suing you. Having filed suit, original creditors are much less likely just to walk away from the suit, but on the other hand, if you fight, you delay them and force them to spend money they hate to spend. You force them to divert their time and money away from their basic business, and they worry about the impression made on potential customers. Thus, by fighting you may very well cause them to settle with you on much better terms.

So in conclusion, the materials you would use to fight debt collectors will still apply to your situation. They will give you the chance to probe the plaintiff to make sure they are willing to pursue you (sometimes they just drop the case if you fight), and they will increase your chance of getting a better settlement or of delaying the final outcome. But your chances of actually walking away from the debt are somewhat less when you’re dealing with the original creditor.

I talk about debt collectors a lot, but many, and perhaps most people being sued for debt are being sued by people (or companies, usually) that have purchased the debt from someone else, and are suing to collect the money for themselves. Debt purchasing companies bid for “debt” at huge auctions, where they buy whole “portfolios” or “tranches” of debt from banks or other companies that generate lots of debt that doesn’t get paid off. So the debt buyer might buy a million or two dollars of “nominal” debt (that is, the face value of the debt supposedly owed) for between two-tenths of a cent to twenty-five cents or more per hundred dollars of nominal value. They then harass the people who supposedly owe the money and often end up suing them. In the law, debt buyers are treated as “debt collectors.”

So What is the difference between a “debt collector” and a “debt-buyer?”

Most people think of debt collectors as the people who call them up and bug them for money. And the companies, to the extent many people know about them at all, might be called “debt-buyers.” But in the law, if the company deals primarily with debts generated by another person, it is a “debt collector” whether it is a debt buyer or otherwise. So the company that bugs you on behalf of the original creditor is a debt collector, and so is the company that bought the debt and began harassing you in an attempt to collect for itself. And so, usually, is the lawyer and his or her firm that are suing you. All must obey the Fair Debt Collection Practices Act.

]]> http://screwedthensued.com/debt-collectors-and-debt-buyers/feed/ 1 http://screwedthensued.com/how-do-i-use-a-cease-communications-letter/ http://screwedthensued.com/how-do-i-use-a-cease-communications-letter/#comments Tue, 19 Oct 2010 22:08:20 +0000 rexx http://screwedthensued.com/?p=37 Continue reading →]]> Debt collectors often try to wear down the resistance of consumers by repeatedly calling and harassing them. If this is happening, you can easily make it stop. Here’s how.

Debt collection is a huge and growing industry in the United States, and collectors are notorious for some of the strategies they use to coerce consumers into payment. Debt collectors know that they people they are calling do not have much money-their purpose is to move themselves to the head of the line. The way they do this is by attempting to inflict more pain or annoyance on the consumer than other bill collectors.

The collectors are not concerned with your priorities or well-being, but you should be, and it is hard to keep a clear head amidst all the noise. Luckily the Fair Debt Collection Practices Act (FDCPA) offers some help.

Under the FDCPA, 15 U.S. Code Section 1692(c)c, “if a consumer notifies a debt collector in writing that the consumer wishes [it] to cease further communication with the consumer, the debt collector shall not communicate further…with respect to such debt.” However, the collector may inform the consumer that it’s efforts are being terminated, or notify the consumer that it “may or will invoke specified remedies which are ordinarily invoked” (i.e., suing or reporting to the credit agencies).

Crucially, if the notification is made by U.S. mail, the communication is complete “upon receipt.” In other words, to make sure the debt collector is forced to cease communications, it makes sense (although it is not required by the law) to send the letter by certified mail. That way you have proof that the debt collector received the letter. Any further communication would be in violation of the FDCPA.

When the phones stop ringing off the hook, you will be freer to make decisions according to your own best interests and priorities.