There are a lot of folks out there who are going to get their clocks cleaned by the banksters.

Damn it all, Karl, you're wrong on this one. There IS a responsibility to pay and the bastards who ignore it are hurting not only themselves but all the rest of us. Want a completely low-trust, economically cratered society where the only people it is safe to invest with are family? Just keep heading down this path. We can catch up to the Arab countries in a hurry.

When you borrow you have both an explicit contract and an implied contract. Ask yourself if you would lend a damned dime to someone who told you up front, "I'm not going to pay you back." Hell no, you wouldn't and neither would anyone else acting responsibly. There needs to be both shame and explicit consequences for people who repudiate their freely-undertaken obligations because if you don't have those, quite quickly no one will be willing to lend. We were almost there in 2008, when banks wouldn't lend to each other. Now the Euros are just about there again. That sucks; if it gets to that position among the general populace, we're headed back to goat-herder status in hurry.

Come on, Karl, you're one of the few people out there screaming for honesty in the honoring of freely-undertaken obligations. You can't say what you're saying here and be intellectually consistent. If people/businesses can't pay, then they can't and whatever consequences are written into the contract for such behavior should be enforced. What definitely should go along with those consequences is a sense of shame on the part of the defaulter and a sense of contempt for them on the part of the rest of us who see them as people who gave their word and didn't keep it.

I usually agree with you wholeheartedly; here we definitely seriously disagree.

Speaking of SOL's - why is the Statute Of Limitations for BANKSTER FRAUD only 5 years?????

Actually, why is there ANY Statute of Limitations for FRAUD?????

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Damn it all, Karl, you're wrong on this one. There IS a responsibility to pay and the bastards who ignore it are hurting not only themselves but all the rest of us. Want a completely low-trust, economically cratered society where the only people it is safe to invest with are family? Just keep heading down this path. We can catch up to the Arab countries in a hurry.

When you borrow you have both an explicit contract and an implied contract. Ask yourself if you would lend a damned dime to someone who told you up front, "I'm not going to pay you back." Hell no, you wouldn't and neither would anyone else acting responsibly.

WRONG.

I would demand a VERY HIGH interest rate for unsecured lending -- and collateral for SECURED lending.

THIS IS HOW IT SHOULD BE -- YOU ARE NOT ENTITLED TO BORROW AT NEXT TO NOTHING WITH NO SECURITY!

This is a PURE business decision. The ONLY reason to pay is because it is in your best interest -- whether that's your credit rating, the risk of being sued, or whatever.

If it's not then DO NOT PAY.

Period.

As we are told EVERY DAY "The entire agreement is within the four corners of this page" whenever it suits some company.

Indeed it is, and it works both ways.

It's an amoral topic. If you don't pay,but have the money, you'll just get sued.

No free lunches.

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Ask yourself if you would lend a damned dime to someone who told you up front, "I'm not going to pay you back."

"I'm not going to pay you back," is implied in any loan. That is the risk you take as a lender. No risk no reward. How you mitigate risk is up to you. That is your business decision. It is that and nothing more.

If I had any debt, I'd gladly give the finger. [****_you]

Debt collectors are commission salespeople of sorts, because what they get paid depends on how much they collect. They've been writing articles on people who are trying to collect "zombie debt" (charged off, improperly assigned to you, or out-of-statute) for at least five years. Remember, the chargeoff period doesn't start until 120-180 days FROM YOUR LAST PAYMENT, so any payment restarts both the charge-off and statute of limitations period. This is why the collectors want you to pay something, anything on the debt, or at least admit to owing it. You need to ask for verification of the debt if you have any doubt about the validity of the debt. The Fair Debt Collection Practices Act is your friend, but in my experience, it is routinely violated.

http://articles.moneycentral.msn.com/Sav....

From Bankrate: http://www.bankrate.com/finance/debt/col....

It doesn't even help to not be the debtor. From 2007 to 2009, I had the phone number that had belonged to a woman who had defaulted on everything you can imagine. Maybe she switched to a throwaway cell phone to dodge the collections people, but I would get a round of calls about various debts about every 90 days, which I guess is how long they kept it before they sold the debt to someone else.

When I would call back to get the name and address of the company so that I could send a cease-and-desist letter, the collector would immediately hang up or promise to take me off their lists. I never succeeded in getting the name of the company because the collector would hang up on me. The few who would talk to me didn't want to identify themselves other than by their first name. There was never a company name in the message. They would ask to talk to this person about their car loan or whatever. I pointed out to many collectors that they could have looked her up at whitepages.com , and that they should do a reverse phone search there to show that a different person now has her old phone number.

We'll see bankruptcy filings increase in February and March because tax refunds will be arriving. People have to save up or get a tax refund to go broke.

Well said...after everything we've seen over the past few years...I'm still absolutely dumbfounded that there are still people who would claim paying is somehow a "moral" issue.

You have a moral obligation to your family and a business obligation to your creditors.

I don't understand how anyone can demand you act with morality when dealing with a company that would slit your throat if it was in their best interest.

If you make a business decision not to pay they can make a business decision to pursue collection. It's business.

Gen wrote..

Do not respond until you talk to counsel, and do not blow it off! In addition, never, ever admit anything and do not talk to them over the phone.

Do not ever talk to them on the phone. They will try and dig whatever they can out of you, don't let them. My favorite thing to do is tell them I need to put them on hold so I can go get my records... Then put the phone down and walk away...
Make sure you answer every Dunning letter you receive within 30 days and keep records of all contacts. I'm not an attorney, so this is just for educational purposes so use your own judgement.

The simple response is this:
I dispute, please validate.

Phone calls are inconvenient, please correspond by mail only.

Debt collection must cease until the alleged debt is verified. Very few collection agencies ever do... Sometimes you'll get an unsigned copy of statements and a generic unsigned/undated cardholder agreement. That is not verification. Remind them and remind them that the alleged debt is still disputed.

Reading the Fair Debt Collections Practices Act will help you understand their violations and make you some money... An attorney can do the same too...

Make sure you understand what you're in for. Talk to an attorney if you need to.

Ask the MF global customers about morality? Bankers might starve the country this year by stealing a billion of the farmers and ranchers capital. A billion is a lot of money in the real economy.

Rich bankers don't pay their debts they get rich by you paying yours.

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My favorite thing to do is tell them I need to put them on hold so I can go get my records... Then put the phone down and walk away...

My favorite thing too!

They use your credit and your signature to create credit. The credit creates never equals the debt due, thus there is no possibility that everyone can pay the debt. Who made the banker king? It was fraud to begin with, as the banker never had the money in the first place.

This link is a book I found by Doug French of the Mises Institute. I thihk Karl would love this book because it cover what has been debated here about mortgages over the past couple of years, including the Robo signing stuff. But, he mentions how the banksters don't seem to have any morals in debt when it suits them, so why should someone spend 30 years paying off a debt of $500K on a house worth $300K? This is a well done book that can be read in a couple of hours.

http://mises.org/resources/6029

Here, the statute of limitations is 4 years and there isn't any garnishment of wages allowed. But, regardless, remember the banksters got the nonsense passed where there weren't any usury laws and they set up in states that allowed you to charge the moon in return for a look at the sun. When they are charging 30% on top of factoring charges, they are supposed to lose some money.

The banks are making a push for a cashless society. This means they never have to produce anything to prove they have anything. As it is, only bankers can decide if bankers are broke, as they pass their IOU's around to hide their insolvency. Insolvent, lending is nothing more than counterfeiting. Take the currency out of the game and there is only credit. This means the banks own all the money, because they never have to produce anything.

There is one thing good about Bernanke doing what he is doing. To hold the system together, they are going to have to raise the reserve requirements. We are talking about a system of liabilities anyhow. Bankes commit fraud when they make loans, especially if they can't cover the losses. It is really the receiver of the money that is out the money the banks charge a fee for creating. In the end, we are looking at a return to Egypt. It already occurred when they created the Fed, allowing the Fed to pick up all the money and the system failed. Since FDR, the means of payment has arisen from the very source of the debts themselves, the banks.

The laws are the rules of business. When people don't follow the rules there is chaos.
I had a mother-in-law who confused law and courtesy when she was driving. She spread chaos everywhere she drove. She would stop at every cross road even when she had the right of way and the other fellow had a stop sign. She would stop on a main road to wave people to come out of a driveway. She had no idea why people got angry at her for giving them the right of way to be NICE. And thought it was SO rude to blow your horn behind her when she stopped on a main road to let the side street enter...

It's the same in business. If you don't follow the rules nobody has any idea what is going to happen. Your contract will depend on if the creditor LIKES you and feels like forgiving your debt as a courtesy or is in a bad mood today and thinks he should get EXTRA beyond what you agreed to pay -

Sort of like how the government is doing with unions and businesses like Chrysler...

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The laws are the rules of business. When people don't follow the rules there is chaos.

Sigh... If only the laws/rules were applied the same to everyone, (just one example - jon corzine) then there would not be chaos.

Disclaimer: IANAL but I have gone toe-to-toe with them in court.


I'm two-for-two as a pro se litigant in fighting debt collections in court proceedings. I have to be, thanks to the fact that my credit reports are hopelessly entangled with a few of my relatives and there's not a chance in hell of keeping it separated (according to Equifax I have four SSNs.) as CRAs (Credit Reporting Agencies) are in the business of selling credit information and they don't give two ****s if it's accurate unless you're famous, powerful, or can make trouble for them. (Read: CRAs have teams that keep records clean and accurate for politicians, judges, lawyers, media personalities, etc. Everyone else can take a running jump until they lawyer up and literally start spamming lawsuits.)

My most powerful weapon in fighting the junk-debt buyers, which is the category most likely to dun you for something ridiculous like a twelve-year-old tiny credit card you'd forgotten about, is a full-bore, by-the-book, quoting-the-laws validation demand. Debts must not be "verified" as Genesis put it, but must instead be validated as Genesis described. The legal distinction is important, as to "verify" a debt according to the Fair Debt Collections Practices Act is to only verify the contact info for the debtor. To "validate," OTOH, as per collections caselaw and FTC opinion letters requires contact info verification, a copy of an actual executed contract to form the basis for the claimed debt, payment histories to establish the Date of First Delinquency and Date of Default (which in turn starts the Statute of Limitations on the debt), and documentary proof that the collector is authorized to collect the debt (e.g., title chain for the indebted account). Many states (e.g., Florida) also require debt collectors be licensed by the state to collect from its residents, so that's another bit of docs.

(IMPORTANT: Original creditors are not subject to the FDCPA. They don't have to do squat and you will usually lose trying to fight an original creditor in court unless there's something else going on like a contract dispute, as they can produce full records on the debt.)

Once a validation demand is received by the collector they are required to suspend all collection efforts until they validate, provided that you hit them with the demand within 30 days of their having dunned you (read: sent that first letter). That means that any calls, etc. are violations of the FDCPA and you can countersue for statutory damages (a max of $1k per incident) if it comes to a court case. After the 30-day dispute period elapses they aren't required to stop trying to collect in order to validate, but if they file suit without validating first you can whack 'em for the whole bunch of validation docs in the discovery phase and that stops the vast majority of the junk-debt collectors cold.


A few tips from someone with actual expertise on the subject (and some of these were already touched on or covered):

1. Do not talk with a collector over the phone, as nothing you say will help your cause. If a collector calls tell them "please submit your claim in writing, as this matter will not be considered via telephone" and hang up. If they call back, rinse and repeat. DO NOT ENGAGE A COLLECTOR IN CONVERSATION ON THE PHONE. EVER. FORCE ALL COMMUNICATIONS TO HAPPEN IN WRITING.

2. If you receive a dunning letter, respond to it immediately if it's a provably bogus or outdated claim. (That "provably" is very very very important.) If it's without a doubt out of Statute, respond with a letter stating that the debt is not actionable because it's out of Statute but do not make any admissions or concessions that could appear to acknowledge the legitimacy of the debt, as this can reset the SoL in most states! If it's not yours, respond with a letter stating that you don't have and have never had an account with the collector's client and launch into a validation demand.

3. If you receive a summons to appear in court or in a hearing, check to see if it's legitimate (fake summonses are popular with bottom-feeder collectors, as a means to scare potential debtors into paying up) and if it is, attend the hearing. If you miss a court date, you automatically lose and the collector automatically wins, and any hope you might have had of challenging the debt went right out the window. Interestingly, if it's a fake summons, lawyer up and file suit for violating not just the FDCPA but also State and Federal Laws (e.g., forging official documents, misrepresentation/fraud) - crush 'em into a small red smear.

4. Log every call a collector makes. Keep every voicemail. Keep every piece of postal mail. If your neighbors say they got a call from a collector looking for you (a common skiptrace tactic is to call the neighbors, and bottom-feeder collectors will try to make you look like a deadbeat by telling your neighbors about how you don't pay your bills - this is "third-party disclosure" and it's illegal as hell BTW), see if they'll be willing to sign an affidavit on what was said. If any collector made any threats, log them in meticulous detail. All this can build a powerful counterclaim if you're being hassled by a bottom-feeder, and if you hammer them hard enough in court they can end up having to pay you money.

5. If you do agree to pay off a debt, get the full terms of your agreement in writing, and if you've arranged a discount from the original balance, make sure you include a provision that any remaining balance must be discarded and cannot be transferred to any other person or entity - otherwise the collector can (and many will) simply sell the discount amount as a fresh account to another collector and you're right back in the same mess later. Also, it's smart to get a "pay for delete" clause covering all CRAs into the agreement so that the collector will completely stop reporting the debt and request its deletion from your credit reports once it's paid - otherwise it'll sit there as a stain on your reports for up to 7 years.


I consider there to be no moral hazards when it comes to dealing with debt collectors and wish them to suffer the maximum pain possible. Hammer them. Hammer them all. Show them no mercy. Give them no quarter.

As someone who spent 17 years in the collection business (not an agency, a law office), I can say with no reservations that Karl is 100% on the money here.

For consumers, here is a website you should become familiar with:
FDCPA: http://www.fair-debt-collection.com/inde....

Also, it would be prudent to also familiarize yourself with this, less in respect to your FICO (I personally don't give a **** anymore), but more because of the leverage it can give you if you understand the games they play with your FICO: http://www.fair-credit-reporting.com/ind....

Also, this guy keeps a pretty good running list of the WORST debt collection agencies out there and outlines some of their tactics. It's good to be familiar with the enemy. http://www.budhibbs.com/bh/

This is probably a good time to remind everybody of the common business practice of virtually all fortune 500 companies of creating many subsidiary corporations all 100% owned by the parent company so that they have 'limited liability' exposure and excess debts do NOT get paid.

Now does anyone want to run that 'moral obligation crap' argument again?

I think you've got a moral obligation not to go into the deal with the thought of ****ing the creditor. After that though it's just a bidness deal.

Here is my actual dunning response letter, Oddone is correct that it's validate, not verify as I said above.

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Dear Gentle People;

I dispute. Validate.

Calls are inconvenient. Correspond by mail only.

Sincerely,

After reading his post I remember reading about it before and I made sure I was using the correct wording. I started by using some chase your creditors away VOD letter that was 2 pages long. I read it, made sure I understood what they were saying, then used it. I've since stripped it down as at the VOD level the only important thing to do is dispute.

I've had them send me copies of my statements, generic card holder agreements, letters stating that "they" reviewed my file and found it to be correct without sending me anything... It's amazing what they will do and say.

Dispute and Document...

I agree with what Oddone said.

And again, don't talk to them on the phone. They are trained to get you to slip up. Talking to them on the phone is advanced territory and should only be done if you are baiting them to collect from them. Make sure you know your states rules on recording telephone conversations. My state is a one party state, so as long as they say they are recording the call I'll engage them.

You have every right to conduct your business in writing and don't let them tell you any different. If you aren't good at confrontation just use the On Hold trick I talked about above...

Themortgagedude wrote..

I think you've got a moral obligation not to go into the deal with the thought of ****ing the creditor.

It's actually illegal to intentionally take on debt that one does not intend to pay. If it was possible to prove that an individual took on debt with no intention to pay it they might find themselves on the hook for felony charges.

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It's actually illegal to intentionally take on debt that one does not intend to pay.

It's fraud and it's something that us little peasants have to be very concerned about...

I have some property coming up for a balloon payment and refinance in July.
I will be going over the fine print in the contract again. Of course it has no to little chance of selling before then and I have discounted the price to break even with the payoff. Appraised at 5k per acre purchased for only $2300 per so the bank let me get it 0 down. Four years ago the lots next to mine were $10k an acre. One lot next to me goes up this month on the courthouse steps. We will see what it is really worth to a cash buyer soon enough. I see them going up on the interest rate for the refi after the balloon if the appraisal is hurt badly enough. I am seriously considering letting them have it back if there is no recourse on the banks part. Land is taking almost 3/4 of a slow weeks paycheck each month. The wife and I have decided we will never build on them.
Time to cut my losses wouldn't you say?
It a real pain to pay for something I no longer want and is a depreciating "asset".
It isn't even useful like a car as it is too small to farm economically and there are no people interested in leasing it for pasture.
A 16 acre pumpkin patch maybe? Any thoughts?

Big Consumer Bank NEVER should have given me a 25,000 credit limit. Not on my paltry salary of 32,000/year. But they did, as my credit score was exceedingly high, the highest one could have actually. I have always lived within my means.

Then the SHTF when I lost my job, and it was a quick and slippery slope to povertyville. When you are a single mom, with a mortgage and no child support making 32K a year, there is no such thing as a big savings account. You live paycheck to paycheck. There was a small amount of emergency money, which goes rather quickly.

Big bank made a bad business decision to give me all that credit, and I made a business decision that I could no longer pay them. Not if I wanted to continue to shelter and feed my daughter and me.

I tried talking with them to no avail, sooo it wasn't like I didn't try my best to work out a small payment plan with big consumer bank. My minimum was 250/month at that time, they wanted to cut off my card and me to pay them 650/month until the balance was paid. Now duh, if i can't pay ya 250 how am i going to pay you 650?. They refused to work with me and a few months later my debt was sold to a collection agency.

Now my debt has been sold three times. No one is calling me anymore though, that's a plus. Maybe it's because I never answer my phone if it's an unknown number. Anyway, can't get blood from a stone.

They keep tacking on interest and it's getting amusing as the dollar number is so outrageous. At this point in my life I am judgment proof. I have nothing of value and they can't garnish your wages in my state.

Still, I'd rather not be in this situation, I'd love to be making plenty of money to pay them off, but it is what it is, that is the reality.

It's very disheartening when you are over 50 and everything you worked for your whole life is gone.