Do I just Default?

Question:

30 K to Chase. Divorced 2 years ago and had about 15 k outstanding after I absorbed all the debt in the divorce. Had just bought house with ex-wife and it's sat, empty, on the market this entire time. I have a decent job, but was laid off prior to getting it for a while.

I was over my credit limit (by a 100 bucks or so) the last couple months. And several months ago was a few days late on a payment. They hiked my interest to 29%. They wont work with me, though I could pay as agreed before.

What are my options. I believe max garnishment in MO is 10% and I have no assets (little equity in unsellable home). Would my money be better spent with a lawyer? I see no chance of chase even talking to me and I'm not gonna be able to get back under my credit line ($1300). Also have decided to forclose on my house as that was another $1000/mth. What a mess...

Answer:

When it comes to debt related problems lawyers are most often a waste of money if you can even find one willing to take your case. Here is why. First and maybe foremost is that debtors normally don't have a viable defense and lawyers don't like to take cases that are almost indefensible. If you owe a creditor or a debt collector money there isn't any reason that most judges will accept for failing to pay your creditors what you owe.

While judges do realize that people run into financial difficulties their thinking is that when you can't pay your debts your only recourse is to run to the bankruptcy courts to absolve yourself of your debts. As is usually the case when government is asked to resolve a problem they end up creating more problems as a result.

Bankruptcy only creates more problems and is quite expensive. There are no free rides even if you are dead broke and worse. Bankruptcy is no exception. Yet, sadly, people are rushing to bankruptcy in ever increasing numbers.

So what is the answer to lawyers who can't or won't help and bankruptcy courts?

The answer is to learn how to defend without lawyers but once you do that and lose a few cases in local courts no matter how well you have learned or how well you have prepared your defenses your back is against the wall and now you think you should have either hired a lawyer or filed bankruptcy and it would have been all taken care of by now without all the fight. So why did you lose even though you thought you were sure to win?

Maybe you are like a personal friend of mine named Gene. He and I are going to court this afternoon because he has a solid reputation of winning in various courts in other types of cases. He is a well respected member of Richard Cornforth's local J-accuse group here in OKC. That's how I met Gene a few years back.

Gene has an unbeatable defense that Judge Croy can't deny. We believe that Gene can't possibly lose but the real truth is that although Judge Croy is an outstandingly fair judge and treats Pro Se litigants with respect and dignity and gives them a fair hearing, rules on the merits of the case as it is presented by both parties Gene still could lose.

The reason is that instead of properly presenting his supposedly unbeatable defense then moving on to other arguments if need be he wants to argue that he wasn't properly served because they didn't personally hand him the summons but rather served another person who was not a member of the household but was just visiting. Gene might win on that one because the visitor was a famous private investigator and told the process server that he was just a visitor but the server would not believe him. Gene should forget his outrage about that and concentrate on his unbeatable defense.

Gene also wants to argue that they failed to validate the debt even though he demanded it and committed other violations but I've told him time and time again that Judge Croy won't listen to those kinds of arguments. I know. I've sat in his court room and watched him ignore those complaints several times. So Gene may or may not win depending on how he argues his case today. I'm almost willing to bet money he argues the wrong thing and loses and that's why I am going to go listen to the hearing today.

So if he loses today what is he to do? Just what I'm going to tell you to do. He has good proof that they have committed several violations of federal law and if he uses the proof he has and presents his federal case properly he will win and not only force them to vacate the judgment they got in local court but take the debt off his credit reports and pay him for his expenses, time and trouble
and damages as well. He should have done that as soon as they filed a case on him in local court instead of trying to come up with a bunch of arguments that are surefire losers.

Gene has kept careful records of all phone calls, has them recorded and his history all written up so he can take them to court. He used my 18 questions to ask debt collectors every time they call to rack up more violations and end up stopping them from harassing him on the phone. 18 questions He quickly reduced them to the point that they call him every few days, ask him his name and hang up immediately without saying another word. Each time they do that is another violation in his bag of ammo to use against them in federal court.

So that is what you need to do. Keep careful records, learn how to deal with debt collectors both on the phone and off and what are all the possible violations they might commit. Do nothing more until such time as they take you to court then file a federal case against the debt collector, prepare your defense using what you have learned and then once the case is over and you know whether you have won or lost sue both the plaintiff (if possible) and their lawyer in federal court. Turn the tables on them and make them pay you. It isn't hard to do.

So how would you like to get started learning right now for free? All you have to do is send me an email at with the words SUBSCRIBE ME in the subject line and I'll send you an invite to get my newsletter which will give you a big head start towards getting rid of your problems without hiring lawyers or filing bankruptcy.

Bill Bauer
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