Wiping Out Your Debts: Conventional and Unconventional Techniques
It seems that in today’s society, one lives by being in debt in today’s credit-oriented society. As a matter of fact, there is nothing wrong with owing money to someone. The majority of businesses get started by borrowing money. It becomes wrong when you get into debt over your head and when creditors begin to call and harass you. Well, now it is time to DO something about it and not have your debts worry you all the time. Hence we present some ways of Wiping Out Your Debts: Conventional and Unconventional Techniques. We hope you find this useful.
Probably the most obvious answer to solving your debt situation is by getting a loan to consolidate your debts. Many banks and financial institutions offer this kind of service. Personally, my favorite conventional method of dealing with creditors is by writing them a letter. A letter has a better advantage because it IS in writing and YOU have a copy of it. The disadvantage is that is it IS in writing and that it can become legally binding. Therefore you should be as vague as possible when making any sort of promises.
Here is a sample letter that you can use:
I just received your letter informing me that my account No. 12345, is past due.
I have made every effort to meet this payment. Unfortunately, due to difficult times which my family is currently seeing its way through, I am at the present time unable to make good on current payments at the rate previously agreed to.
However, I feel certain that my financial situations will improve in the near future, and that I will at that time be able to resume payments according to the agreed schedule.
In the meantime, I am enclosing a token payment of $______ to show my good intentions.
This is my favorite techniques in getting your creditors to stop harassing you. Federal and State laws now prohibit such tactics of collections such as telephoning a debtor(you) and harassing. The laws also prohibit a creditor to send letters to a debtor threatening to profane their credit or threatens that certain legal actions will be taken. THE THREAT OF CRIMINAL ACTION IS ILLEGAL!
A creditor or collection agency may NOT use a name that can mislead someone into thinking that they are some government agency, or represent themself as a government agency. Nor may they falsely represent themself as a lawyer, law enforcement agency, or private detective.
Collection agencies are prohibited from calling on, or otherwise contacting a third party such as a neighbor or employer to discuss your debt.
Furthermore, the Federal Communication Commission has ruled in favor of debtors, that it is illegal to use the telephone by a creditor or collection agency to harass abuse , or otherwise frighten a debtor, or to call at his home to discuss the matter with a family member.
All of the above mentioned tactics are covered by the Fair Debt Collection Practices Act, passed in March, 1978, a copy of which is available from the Federal Trade Commission regional offices whose address follows. All these restrictions apply to collection agencies. Restrictions on business such as retail stores, banks, and small loan companies, are more lenient.
Any complaint against a collection agency, finance company, retail store , or other creditor, should be addressed to the Bureau of Consumer Protection, Federal Trade Commission, at one of the following regional offices:
25 Federal Plaza,
New York NY 10007
John F. Kennedy Fed Bld,
2120 L Street, N.W.
Washington D.C. 20037
730 Peachtree St.
Atlanta GA 30308
1240 E. Ninth St.
Cleveland OH 44199
55 E. Monroe St.
Chicago Ill 60603
911 Walnut St.
Kansas Cty MO 64206
500 S. Ervay St.
Dallas TX 75201
450 Golden Gate Ave
San Francisco CA 94102
11000 Wilshire Blvd.
Los Angeles CA 90024
1511 Third Ave.
Seattle WA 98101
Remember, if you feel that the creditor violated your rights by the use of the telephone then notify your telephone company and the Federal Communications Commission. The FCC’s address is: 1919 M Street, N.W. Washington, D.C. 20554
Send a copy of a letter along these lines to the creditor and/or agency if one is involved:
On June 26, a representative of your firm acting on your behalf, telephoned my home and discussed an alleged debt with a member of my family. Furthermore, on July 1, I received a letter from you stating your intentions of profaning my credit if I did not make a certain payment that claim is now past due.
Your practice was in invasion of my privacy, and was a defamation to my character.
I will NOT permit my family nor myself to be subjected to your illegal tactics. I have reported your firm to the Bureau of Consumer Protection, Federal Trade Commission. Continued harassment will result in my immediately filing suit against your firm for damages.
Letters such as the above will give the creditor the impression that you know your rights and are not easily frightened. This will also give the impression that if he were to file suit in court, he would be met with strong opposition. He must now weigh and justify the high cost of further action against you, against the amount of money he may recover if and when he should win. By common sense, no creditor likes to tie themselves up with law suits especially when the have the impression that they are in for a tough time and IF there is a collection agency involved they will get 50% on any money collected anyway. Also, no agency can afford the expense and bother of going to court when the chance of winning has already been challenged. So unless the amount of money involved is real large, you stand a good chance that the creditor will write off your account as “UNCOLLECTIBLE” and forget it. They are not in business to lose more money than necessary. Furthermore, thy must take into consideration that your threat of suing can be a real one and they stand to lose too much to take any chances.
If the creditor writes your debt off as uncollectible, they can not report it to the credit-reporting bureaus. They have no claim against you! All you did was challenge their business practices and it was THEIR decision to cancel your debt.
Here’s another tactic that can be used quite effectively. Make a list of all your creditors and the amounts owed. This should not include anyone you have a secured loan with (home mortgage, car payments, etc.). Lets say the total amount you owe is $5000 and you can raise $500. Of course the higher the dollar amount, the more likely they are to accept.
If you can get the help of a friend, lawyer, or legal aid society so much the better.
Have a separate letter typed to each individual creditor along these lines:
I have been retained by (or, represent) Mr._________ for the purpose of settling as many accounts as possible before filing a petition in bankruptcy.
Mr. ___________ total debts at the present is $5000.00, with assets on only negligible value.
In an effort to settle honorable with his creditors, Mr. ________ has managed to raise $500.00 for this purpose. This money will be distributed on an equal percentage bases only among the creditors who accept this offer.
Of course your percentage my be as little as ten percent, and may be much more (may be large enough to repay the debt), dependent on the number of creditors accepting this offer.
The funds in settlement of debts due will be mailed on _________. (write in the date of 10 days from the time you mail this to the creditor.) Your response must be received prior to this date.
To accept this offer, all you need to do is sign the enclosed copy of this letter and return it to me using the enclosed self-addressed envelope.
Pursuant to the provisions stated above, we hereby agree to accept a minimum of $________, or a greater amount pursuant to the number of creditors accepting this offer, as full payment and settlement on account number _______________.
Name of Creditor _______________
Authorized signature ___________
A letter like this is very effective. None of the other creditors will want to be the fall-guy. Sure they only have the chance of receiving only 10%, but by the same token there’s a chance of receiving alot more and by nature, creditors love a gamble. They’ll jump at your offer, knowing that this is one play the stand to win at least something, and cannot lose more than what has already been lost.
Presented here are some of your legal rights as a debtor and ways for Wiping Out Your Debts: Conventional and Unconventional Techniques, some at even a fraction of the cost that you owe in total. If the laws say you can do it, why buck it? You probably couldn’t repay the entire total of debts with todays high interest rates. As always, you should consult a lawyer or legal aid society just to be on the safe side.