Second part Of beating credit card debt

The second best weapon to defeat a suit based upon an old credit card debt is CROSS EXAMINATION. The majority of collection suits filed by second or third hand debt buyers are based upon a sworn affidavit. That is an affidavit from someone who works for the debt buyer that says they are familiar with the books and records and your account and that you owe x number of dollars.

If no one shows up on the day the matter is set in court, that document is sufficient to allow the debt collector to take a judgment. However, in all courts, you as the defendant have a Constitutional right to cross examination of the party testifying against your interests. And you cannot cross examine a piece of paper.

What that means is that the company suing you has to produce a real live breathing witness who can truthfully and accurately testify about your account and be subject to being cross examined by you. Most credit card debt purchasers deal in a volume business and have no interest in going to the expense of making such a witness available in your jurisdiction. Many judges, however, will gloss over your right to cross examination unless you clearly assert that right and demand the opportunity. Your ability to actually cross examine is not as important as forcing the debt collector's hand in producing a live witness.

Medical Debt is a Financial problem

A large portion of my debt collection practice is made up of the collection of past due medical bills. Unfortunately, the vast majority of the people I end up suing for past due medical bills are not the large numbers of uninsured about which congress is constantly concerned. They are people who actually have health care insurance, but their insurance has denied the claim or failed to pay. Despite any number of modern myths, this is the bottom line everywhere in the United States when you go to the doctor's office, you will be asked to sign a Patient Financial Responsibility document, which in layman's terms says you are responsible for your own bill whether you have insurance or not.

When you go to the doctor, the doctor provides you services and you are responsible for paying for those services. You may have a contract of insurance, but that is a contract between you, as the insured, and the insurance company. It is not a contractual relationship between the doctor and the insurance company. The doctor's office files your insurance claim as a courtesy to you. Even your policy of medical insurance will state that you, and not your doctor's office, are responsible for filing the claim. So the first great truth that every patient must understand in today's modern world is that they are first and foremost responsible for payment of the doctor and hospital bills, even if they have insurance.

Beat Your Old Credit Card Debt

Read the contract. Almost all debt collection law suits based upon aged credit card debts are breach of contract suits. What that means is that you are being sued for breaking your written promise to repay the debt. Therefore, the key to the suit is the actual written contract. In this case, that means the long, very fine printed, agreement you signed way back when you were first issued the credit card. You need to get a copy of this and read it, every word of it. Getting it may be difficult. If you are being sued in small claims type of court, you may not have the benefit of formal discovery. Formal discovery is used by lawyers to learn about the other sides case.

One tool of formal discovery is the Request for Production of Documents. If the court you are being sued in is governed by Rules of Civil Procedure, then you may file a formal Request for Production of Documents before your trial date and obtain a copy of the contract. If the court is an informal or non-rule court, then you need to request a copy of the contract from the collection attorney. You need to make that request politely, in writing and by certified mail.

That way if you aren't provided a copy and you see it for the first time at trial, the judge will be sympathetic with you and grant you either a break to review the document or a continuance. So now you have the contract, what are you looking for? You need to examine the maximum amount of interest you are allowed to be charged under the agreement.

Has the debt buyer exceeded that amount? Has the debt buyer exceeded that amount by adding on collection fees and costs? Does the amount now sued for exceed your state's usury statute? Next, does the agreement require the suit to be brought in a particular jurisdiction or state? If so, you may be able to have the suit dismissed in your jurisdiction. Does the agreement require either arbitration or mediation? Again, if so you may be able to have the suit dismissed.

In the last two examples, particularly with aged debt, the delay in having to either refile in the proper jurisdiction or in the proper forum may run the creditor past the statute of limitations we discussed in part one. So, the bottom line is get a copy of the contract and read it. Read every word of it.

debtor makes is failing to plan a course

The biggest mistake a debtor makes is failing to plan a course of action. The majority of debtors I encounter are merely floating through life allowing their circumstances to drive their life choices. They pay the debts owed to my clients because I am actually taking the time and effort to sue them and make their lives miserable while they ignore other debts which are not being as forcefully collected. These same debtors attempt to make low monthly payments thus preserving their debts for inordinate periods of time and ultimately failing to pay off their debt and only managing to accomplish the ruination of their credit. A debtor who is facing significant amounts of debt needs to make a life choice and implement a plan based upon that life choice. That choice is as fundamental as fix it or forget it. In other words, a debtor needs to decide are they going to create and implement a plan which allows them to pay off all of their debt, avoid the creation of new debt, preserve and if necessary repair their credit or is the debtor going to make a conscious decision to not pay any of their debt and allow the passage of time to clear up their debt problem. Both of these courses of action have merit and pros and cons. Both also are extremely difficult. The easier course of action is to simply float down the debt river paying what you can, when you can but in the long run that is both devastating and permanent.

In the first course of action, the debtor should find a program that they can embrace and make their own and totally commit to. I highly recommend the Dave Ramsey Christian based program, but that is simply my opinion. If the debtor makes this life choice they will have to implement a strict budget and pay down the smallest debts first, eliminating debt as they go. The debtor will have to deny themselves the luxury of living like everyone else and will actually have to buckle down and do without. How long it will take to accomplish this program depends on the number of debts and the amount of debt the debtor has incurred. A key to this life choice is a change in life style and pattern of thought. This change is absolutely essential in order to keep the debtor of incurring new debts while you are paying off the old ones. The end result of this life choice will be the end of debt collection harassment and good credit.

The second life choice option available to the debtor is to forget about their debt. This is an extremely dangerous life choice to make. It is not recommended if you have absolutely any assets whatsoever, such as a retirement fund, savings account, luxury automobile or equity in your house. If you are truly flat broke, you can consider ignoring your unsecured debt. By unsecured debt I am specifically referring to credit card debt. Any debt that is secured with collateral such as your car loan which is secured by your car or your house note which is secured by your house must be paid or the institution to which you owe the debt will simply repossess the collateral. A debtor can under the Federal Fair Debt Collection Practices Act inform a collection agency that he or she has no intention of paying the debt and to cease all contact. At that point the debt collection agency must cease all contact, but can proceed with a lawsuit. At some point your creditors will lose interest in pursuing you if you never make any payments and have no assets. Likewise at some point your debts are simply no longer valid based upon the statute of limitations for open accounts in your state. That time period varies from state to state. If a judgment is taken against you that judgment is good for a certain number of years. For example in my state of Tennessee a judgment is good for ten (10) years however, you should understand that at any time during that ten (10) years that judgment can be renewed by court order for an additional ten years. Using this method you are simply banking on the fact that your creditors will lose interest in attempting to get money out of a dry hole. After seven (7) years the derogatory information will age off of your credit report. The downside to this life choice is that you will have to endure credit collection attempts and the fear that whatever asset you do have will be seized or taken to satisfy the debt. At the end of this process, assuming you do not incur additional new debts, you will have decent credit as all of the derogatory information will have aged off.

I cannot recommend to you either of these life choices nor can I advise you on which would be the best for your circumstances. There are other obvious life choices, such as filing either Chapter 7 or Chapter 13 bankruptcy, which I have not discussed. However I can strongly advise you to avoid simply floating down the river of debt making minimum payments when and where you can.

Free lawyer tips for your debs

I know the health care insurance world is in crisis. I know that because I teach seminars on debt collection and give speeches on ways to fix the health care system. But how I really know it is the pleas from desperate people I receive as a result of this blog. This blog is here to provide information. It is not a solicitation for clients. I now receive an average of twenty emails a week from people describing their specific situation and asking for legal advice. I also receive an average of three telephone calls a week from the truly brave or the truly desperate.

These requests break my heart. But I can't respond to them. I am licensed to practice law in the states of Tennessee and Mississippi. I've passed the bar in Alabama, but due to geographical distance, no longer practice there. I am not licensed to practice law in any other state.

The rules of my profession prevent me from giving advice on what to do in New York or California or any where else I am not licensed to practice. Additionally, I'm not your lawyer. You and I don't have an attorney client relationship. You haven't hired me, you haven't paid me and I haven't agreed to be your lawyer. Finally, I have an active practice with clients who are actually my clients. Tending to their needs and problems takes all the time I am willing to sacrifice away from my family. I will continue to update this blog and provide as much information as I can.

But please understand, if I don't respond to your email and tell you what to do, it's not because I'm being rude or stuck up. It's because I'm not your lawyer.

Calculator for calculating Interest

Sometimes the simplest tools can be the most useful. This is a link to a free post-judgment interest calculator: http://www.nationaljudgment.net/intcalc.htm . While designed as a post-judgment interest calculator, it can be utilized to calculate the interest on any debt by merely inserting the date the debt was incurred and the interest rate applicable and hitting the calculate button.

I use this tool almost daily to calculate interest on judgments to provide debtors with a complete payoff. Post-judgment interest should never be ignored as an important tool to maximize the value of the debt collected. Post-judgment interest can also be a valuable negotiation tool if you are looking for a bargaining chip to give up to a debtor.

A debtor who has to pay the full amount of the principal of the debt, filing fees, service of process fees and attorney's fees will feel vindicated if you can give him an exact dollar and cents figure for the amount of post-judgment interest that you are agreeing to waive in exchange for immediate full payment

Save Your Credits

The Wall Street Journal recently reported that the rate of foreclosures has now equaled that of the Great Depression. Record numbers of Americans now face foreclosure on their homes. Aside from the immediate tragedy of losing their homes, these homeowners face the lasting legacy of severely damaged credit. The record of a foreclosure will stay on your credit report for a minimum of seven (7) years. A year ago this would have meant that when you apply for a home loan you would have been assigned to the sub-prime mortgage market. This would have merely meant a higher interest rate which would translate to a higher monthly house note. However, in today’s world the sub-prime market has simply disappeared. Therefore if you have a foreclosure on your credit report it is highly unlikely that you will be able to obtain a home loan. This will change as the credit market swings back to a more liberal pole, but that will not occur for several years.

So what is a homeowner to do if faced with imminent foreclosure? The solution may be in the most desperate of circumstances, the short sale. The collapse of the sub-prime market and the drastically increased number of foreclosures has created an entirely new market place for what is commonly called short sales. A broker or a short-sale specialist will contact the home owner and offer to purchase their home for an extremely discounted price. Typically this price is for less than the outstanding balance of the home mortgage. If the homeowner accepts this offer the short-sale specialist will then contact the mortgage company’s loss prevention department.

The loss prevention department is the department whose primary function is to prevent default on loans and when default cannot be prevented to proceed with foreclosure and recover as much of the loan as possible. This branch of the mortgage company will acquire the property through foreclosure, then they will sell the real property and subsequently, file a civil suit against the defaulting home owner for the remaining balance of the home loan not covered by the sale of the property. The short sale specialist will negotiate with the loss prevention officer a satisfaction of the mortgage for a discount. These examples work better if some arbitrary numbers are applied. In our case let us assume that a homeowner has purchased a $200,000.00 house on a no money down, interest only loan. Five years into the loan, the balloon refinancing note has become due or the arm as kicked in and the homeowner’s monthly payment has skyrocketed.

Because the homeowner has only been paying interest for the first five years of the loan the principle balance of the mortgage is still $200,000.00. The homeowner may very well have equity in the home due to the home’s appreciation in value or the homeowner may be over-leveraged in the home due to collapse of the local home market and devaluation of properties. The amount of equity the homeowner has is immaterial in the short sale scenario. The short sale specialist will offer the homeowner $150,000.00. If the homeowner accepts, the short sale specialist will then contact the loss prevention officer for the bank and offer payment of $140,000.00 in full satisfaction of the $200,000.00 mortgage. Now you are asking why in the world would the bank accept $140,000.00 on a $200,000.00 loan. The reason is the bank is in the business of loaning money and making money off those loans. The bank is not in the business of taking possession of thousands of pieces of real estate, paying the carrying costs on those pieces of real estate, paying the maintenance and upkeep on those thousands of pieces of real estate, paying the repair and remediation costs in order to make those pieces of property marketable and then paying real estate brokerage fees and closing costs for the sale of that property. Banks have already been glutted with foreclosed property and now are no longer interested in taking on new properties. If the loss prevention officer accepts the $140,000.00 offer, the short sale specialist will then go out and find an investor. An investor is someone who is buying property to convert them into rental property or has enough liquidity to purchase property and hold them until the market recovers and returns to normal, when he can then sell the property at a substantial profit.

The short sale specialist will locate an investor who is willing to accept assignment of his contract for sale with the owner at $150,000.00. At the closing of that sale the investor will pay $150,000.00. $140,000.00 of that will be paid to the bank in full and final satisfaction of the $200,000.00 mortgage. The remaining $10,000.00 will be paid to the short-sale specialist essentially as a commission for his work in setting up the deal. At the end of the closing the bank walks away with 70¢ on the dollar on its mortgage. The investor walks away with a $200,000.00 house that he bought for $150,000.00 which will now either generate rental income or when the market returns to normal give him a $50,000.00 profit. The short-sale specialist walks away with $10,000.00 cash for a tremendous amount of legwork and negotiation. Your first impression is that the homeowner has been screwed.

That is absolutely not the case. The homeowner walks away from the closing with his credit report reflecting that he paid in full a $200,000.00 mortgage with no record of a foreclosure. The homeowner can now go back into the market place and buy a home that he can actually afford under a realistic thirty (30) year fixed rate mortgage. The only true downside for the homeowner is that if in fact he had equity in the home. If he in fact had equity in the home he has lost that appreciation. However, in truth he lost that equity when he could not sell the house for his asking price and that loss was inevitable once the property was foreclosed. Therefore if you are facing imminent foreclosure, one strategy which may preserve your credit is to seek out the short sale specialist who is willing to make an offer to purchase your house for a substantial discount.