Phase 3: Hitting where it hurts - stop paying the banks
While writing my Open Letter to Barclays (Juniper Bank), I checked my email and saw the link to Judge Andrew Napolitano’s speech.
Fox News legal analyst Judge Andrew Napolitano is among the fiercest defenders of individual rights. Both in his daily appearances on the country’s most-watched cable news network and in a series of books (most recently, A Nation of Sheep), Napolitano consistently and defiantly argues that the only legitimate government is that which respects its citizens rights in all cases.
In late October, Napolitano gave the keynote address at the conference Reason in DC, where he delivered a spellbinding speech that blended a masterful understanding of American history with a blazing outrage at the excesses of the new security state. “Who [is] the greatest violator of the Constitution?” asks Napolitano. “George W. Bush has shown less fidelity to the Constitution than any president since Abraham Lincoln.”
Click above to view the Judge’s speech (approx. 40 minutes).
It started out a bit slow, but much of the speech was news to me and some of the stuff just blew my mind. And how does it relate to Phase 3? What is Phase 3?
Phase 1 was my documenting and researching problems with credit reporting and FICO scores on my websites in the 90s.
I wrote about how things sucked, how creditors, collectors, CRAs and Fair Isaac caused so much pain and suffering.
Phase 2 was documenting my lawsuits against creditors, collectors, CRAs and Fair Isaac in the last 7 years.
I set out to show my readers how to find justice in the courts.
I documented the corruptions of the legal system, procedures, laws and judges. Justice exists at best for the wealthy.
Notably, just about nobody could care less. Capital One claimed to have spent $100,000 to defend against me (no discovery, mainly research and motions to dismiss), but it cost me even more money and literally years of my life. Considering that Capital One’s income is millions of times greater than my income, I was obviously only hurting myself.
Phase 3 is my call for judgment-proof consumers to stop paying their unsecured debt.
It’s free and unless you publish your refusal to pay as I do, it takes practically NO time and effort. Every penny you don’t send to the banks is gravy. In fact, many millions would greatly benefit from doing a little research to determine how to become judgment-proof (state law).
If you own a home, you may have to file for bankruptcy to be able to refinance or sell your house if the creditors get judgments against you. However, most judgments can be settled for less than 50% of the original amount, sometimes a LOT less. And that’s especially true once the debts have been sold to debt buyers.
I have not heard from WaMu since before Christmas and now that I stopped paying my Juniper credit card, my credit rating is sure to be destroyed. While I have reasons to stop paying almost all my credit cards (especially Capital One, Target and Household), I will wait to see how they react to my credit reports. If the rate is increased or the account closed or the limit lowered, I’ll stop paying.
Phase 1 and 2 each lasted about 7 years and I accomplished nothing.
I tried to help people by example. I encouraged them to publish their problems and to sue for their rights.
I miserably failed, but it’s not my fault. If I had prevailed in court, the defendants and their scum sucking lying lawyers hadn’t continually lied, the judges hadn’t been so corrupt, the consumer attorneys had some morals and spine and most legislators weren’t paid off by the industry, I’m sure more readers would have filed lawsuits and Phase 3 would have been preempted.
But things being as they are, Phase 3 is the logical next step.
Since Phase 3 requires people to do NOTHING and it is PROFITABLE, I think there’s a chance that it’ll get better results.
It requires no skill and you get the instant reward, the $$$ you are NOT sending to your creditors.
Maybe the legislators will finally stop ignoring me.
They weren’t worried about the exploitation of hard working decent Americans by ruthless corporations. Will they worry that the banks will be exploited by people who refuse to pay their bills?
Of course. They already quickly wrote new laws to prohibit the increase of some adjustable rate mortgages. That’s NOT legislation to help consumers, but to keep the banks from having to foreclose on millions of houses and going bankrupt.
If enough people stop paying their credit cards, we’ll quickly see laws prohibiting rate increases and excessive credit card rates.
I did NOT stop paying WaMu and Juniper because I can’t pay them.
I just received $3,000 in early December and should get another $15,000 from the sale of my previous home next week. I’m NOT refusing to make my payments because I can not pay, but because I do not WANT to pay WaMu and Juniper.
I have better things to do with my hard earned money. I’ll continue to work on my unfinished house and I’ll pay for some depositions and filing fees.
Additionally, I don’t just want to teach my subscribers and clients how to get the credit they deserve, but also how to continue to have high credit scores DESPITE the defaults. I’ve seen MANY scores in the mid to high 600s with recent collections. It just takes a bit of planning.
Just recently I had a reader suggest that I start paying cash.
I have NO intention of doing so. Why waste $60 on fuel and a day to go to Vegas to pay 50% more for a product than when I order online and pay with a credit card?
Why give up the right to dispute charges for substandard products and services?
And I just really like to know where all my money goes.
When I first moved to the area, I paid a guy in the neighborhood cash to work on my car. 2 weeks later he came by my house and claimed that I still owed him $20.
A few years ago, I paid cash for some roofing work. A few months later, the guy said I still owed him $20.
I don’t like paying cash. I prefer to be able to PROVE that I paid my bills.
Even though I DID prove that I paid at least 4 of my bills, the creditors claimed I didn’t (Pacific Bell/American Agencies, Verizon, DirecTV/Focus Receivables and Dish Network/CBE). If I paid cash, I’d probably have to pay my bills 3 times to make them happy.
And of course the fact that I had to spend many thousands of dollars to prove that I paid my bills and the thousands of hours that I had to spend on litigating greatly contributed to finally realizing that I have to look at other options to keep my earnings.
And even if your insurance premium is a few hundred dollars higher because your scores are low for a few years, is it really a big deal? You’re saving $30k or $80k or $200k in credit card debt and interest.
If you owe $30k, you’re likely to pay $60k by the time you’re done paying interest and fees and $90k or more if you continue to use the credit cards because you need the money to pay the bills.
I hope to inspire millions to take a long look at their finances and to do what’s best for THEM and their families NOW.
Don’t wait until you can’t make the payments.
Yesterday I noticed with my home owners insurance
policy a note stating that if my Credit “profile” was better I would have received a better rate.
9 years 2 months without one single late payment and only 1 inquiry on my report. Providian states that my credit score is now 720.
That is not good enough for Erie insurance.
So what the %%%% good does it do nowadays when you work hard and pay all your bills timely, absolutely nothing. Wish I was judgement proof.
Happy new year.
Ill need to work a second job and weekend to pay off my loans. Perhaps instead of paying for cash, I’ll see you with me on the night shift. What do you do besides blog, btw?
Thank you for being such a fine example of the problem.
You work too much and you don’t think enough.
“What do you do besides blog, btw?”
I wrote above:
”Phase 1 was my documenting and researching problems with credit reporting and FICO scores on my websites in the 90s.
I wrote about how things sucked, how creditors, collectors, CRAs and Fair Isaac caused so much pain and suffering.
Phase 2 was documenting my lawsuits against creditors, collectors, CRAs and Fair Isaac in the last 7 years.
I set out to show my readers how to find justice in the courts.
I documented the corruptions of the legal system, procedures, laws and judges. Justice exists at best for the wealthy.”
For details, you can read the sites linked at http://creditsuit.org/credit.php/blog/contact/ for several thousand hours.
Your debt keeps you from thinking rationally. THAT is the problem. Clear your mind, take a few weeks or months off, travel in a foreign country. Money is only money, worthless paper, backed by nothing.
If you’re judgment-proof, stop paying your unsecured debt and instead of working a second job, educate yourself.
And Randy, I have the insurance quotes to prove that despite my PERFECT payment record, my insurance skyrocketed due to credit scoring.
That’s of course another reason NOT to pay my credit cards. Since I’m paying several hundred dollars MORE for home owners insurance despite having paid ALL my bills and my perfect payment history, I might was well NOT pay the credit cards and use the money I save to pay for the insurers’ undue profits.
I’d like to see the bankers lobby to have credit scoring prohibited.
Dear Christine,
Kudos for your efforts. I am a former sub-prime loan officer. I have read your blogs and most of the stuff on your site. I have been a bit of an advocate for consumers’ rights as well. I’d like to share some details on the sub-prime crisis if you’re interested. I tried to enlighten Ben Bernanke from the Fed, but they weren’t interested in the details of the consumers. At first I was appalled by the rejection, but then I figured it was about business despite the claims to help sub-prime borrowers.
I predicted the sub-prime crash after my first six months as a loan officer. It was just plain common sense, especially after viewing clients’ personal financial information! No way they could pay, but they still took the mortgages. I even tried to educate all of my clients, some listened, all heard, but few paid attention. It’s disgusting to see the convoluted extortion of our society.
I’d like to communicate further with you but I know you’re busy. I’m looking for a like mind to move forward on a new project regarding the consumer credit/mortgage fiasco. If you have the time, write me back. More details about me can be found at myspace link. For the skinny, I also have a Sociology degree and I’m a senior staff writer for a local newsrag.
Thank you again for the efforts on your site. I admire your diligence and motivation.
Best regards,
Robin S.
P.S> Hate spammers, too… so if you write back, create the email subject as one I’ll want to read.
Robin, I’m not sure whether you realize that you submitted a comment, not an email. To contact me by email, it’s best to submit through http://creditsuit.org/credit.php/blog/contact/
Of course I am extremely busy with litigation and some client work and there’s no time for private emails unless it’s regarding confidential issues. What little time I got to write outside litigation, I want to be read by MORE than one person, i.e., put it on the web.
You should publish your letter to Bernanke and anything else you want to do.
I just got myself another project, filing Bar complaints against the United Online lawyer Keith Knochel for committing perjury, trying to get their notary’s commission revoked and also filing a Bar complaint against their in-house lawyer Anthony DeToro for appearing on their behalf in the small claims mediation hearing, a violation of the rules.
I’ve NEVER been able to get any Bar to take ANY action against a lawyer, but of course the point is to DOCUMENT the corruption and why I recommend that people stop paying their credit cards.
Hopefully I’ll get to publishing the United Online (NetZero) filings and work on these complaints today.
And I’d REALLY like to get phpBB3 installed at http://creditlegislation.org/ so that people can discuss what to do, but I just don’t have time right now.
Christine, thank you for all your hard work. I and my husband are victims of predatory mortgage lending and old debt that junk debt buyers won’t let drop off our credit reports, no matter how old and out of statute it is. I am not sure disputing would do any good. We need your services and cannot afford them, like many folks. There is a huge segment of our United States population that has had NO benefit from the last few years of lower mortgage rates available, because they were not available to us. The lowering the Fed interest rate only puts more money in the hands of the banks and lenders - they do not lend more out, they do not lower loan standards or mortgage interest rates. Why don’t those smart PhD’s in Economics and Business that run the FED see that? Thanks for all you do!
You’re very welcome.
Regarding the debt buyers’ reporting:
“I am not sure disputing would do any good.”
Well, there’s no way to find out until you DO dispute.
I know that Equifax often doesn’t even send the disputes to the creditors/collectors anymore and simply “reviews” the reporting to conclude that it is accurate, but it’s worth the 41 cents for the stamp.
You also write like you are fairly educated and you might want to subscribe to http://creditfactors.com/ if you have the time to read and learn about credit and scores.
Christine, I stoped paying my credit cards on principle in 2003 based upon a company called DSI and their literature and research that indeed, the Credit Card companies did not ‘lend’ me money, but created money out of thin air with double entry accounting techniques, off the books entries and abuse of the Feds reserve requirements for banks. Basically, it was my contention (which I believe to be true) that when I accepted a credit card offer, the bank books the full amount of credit issued as an asset, and automatically expanding their ability to offer additional credit because of the 10 to 1 margin requirements the Fed allows the banks. Essentially the banks were using my credit to borrow money from the fed, using that money to expand and fund their business, charging the stores 3% everytime I used the card, and charging me high interest rates on unpaid balances—all using money they created out of accounting manuevers that are probably not legal. Essentially they create money from thin air with the backing of the fed, even though banks are not allowed to lend their credit by Federal Statute (they can only lend money in hand). (I’m sorry if the above sounds like a rant, but their is strong factual basis for this analysis).
Of the 6 credit cards I disputed and stopped paying here are the results:
Chase Card #1: Chase attempted to get a judgement against me, which I fought in Civil Court through a series of motions. They were unable to answer the motions effectively (because they would have to admit their accounting fraud) and eventually dropped the case. 5 years later they sold it to a sleeze bag collection firm, who again took me to court (and redated the ‘debt’ which ruined my credit score again), which I again fought with motions. They never answered my motions and their lawyer asked (and got) a stipulation to close the case ‘without predjudice’ (my acceptance of this stipulation was a mistake, I should have forced the judge to dismiss the case instead). Net result, 1 (Trans Union) of the 3 bureaus deleted the debt collection claim based upon the stipulation and the total lack of verification this collection agency had (they could not even provide a credit card number to the court). The other two credit bureaus simply refused my requested for deletion stating that the account had been verified by the collection agency and the redating was correct.
Chase #2. Again, sued in Civil Court. Answered with motions for dismissal, then interogatories. The lawyers for Chase wouldn’t answer my motions, got 2 delays, and the judge dismissed on the 3 court date for lack of answer to my motion.
Citibank. Sued by their lawyers, essentilly when through the court process as above, and got the case dismissed. A few years later another collection agencie ‘bought’ the account and tried to collect with their abusive phone calls and letters. I finally got a copy of the court document that said the case was dismissed w/predjudice, sent it to their lawyers, the ftc, and the state attorney general telling them to leave me alone. Never heard from them again.
MBNA #1 - VERY IMPORTANT! MBNA (and many others now) have an arbitration agreement in their contract. If you challenge or do not pay a card with an arbitration agreement, you are screwed as they have a arbitration company that is set up to rule against you, and ignores most and all of the Federal Debt Collection laws. They then take the arbitration judgement to court where it is rubber stamped. Result: Judgment against me and then a default judgement when I tried to pay less than the full amount to the collection lawyers. They freezed my bank accounts I had to file an appeal to finally get the matter settled and the judgement reversed.
MBNA #2: Same as above, but I settled with the lawyers before arbitration to avoid the fiasco above.
Bank of New York: Their workout department called early on, were super nice and professional, and offered to take installements payments for 30% of the outstanding balance. I took it, and saved about $8,000.
Bottom line: I totally agree with you that the banks have been scamming the American Public for years with their one-sided rules and contracts. They create money, and expand credit at will. And I believe that much of what they do is illegal and certainly immoral (as if that matters to corporate America). And, as you can see from my experiences since 2003 you can fight the banks and not pay some of your credit cards.
The downside? You need a iron stomach—or be a lawyer to go through these court processes. As you know the courts are not friendly to creditors, and I always felt that I was treated as guilty by the Judge.
Also, my credit score has been ruined since 2003. Even now my best score is just 620, and my 2 worst are around 575. As I am a real estate investor—without my wife’s good credit we would not have been able to get any mortgages at all and would be essentially out of business.
So, I would caution anyone who decides to not pay the credit card companies on principle to:
1. Make sure that your account does NOT have an arbitration clause in it. If it does, opt out of the arbitration before taking any action (they will likely close your account anyway when you opt out of arbitration).
2. Be prepared to spend the time to fight in court. I spent hours and days preparing motions, serving motions to plaintiffs, presenting my case to the judge, etc. It takes time. I would say at least a solid 2 weeks (80 hours spread out over time) for each case.
3. Be strong. If you cannot handle stress and upset be aware that these banks do not care and will turn your account over to sleeze bag attorneys who do this professionally and also do not care.
4. Be prepared to keep fighting, even if you ‘win’. Your account will be sold to credit collection agencies and you may have to go through the court process again with them.
Sorry for the long post, but I hope my experience will be helpful to others. You can beat these guys, but it is not easy and you must be prepared to fight for your rights.
Christine thanks for the website and your work. If you would like copies of my court motions I would be happy to send them to you.
Michael
Michael, WOW!!!
I’d love to have your motions and I’ll be happy to give you a free CreditFactors subscription and if you like, a private forum to review your reports and tell you what you can do to improve your scores.
I totally agree with you on just about everything. The only issue I have is whether one doesn’t have to pay a creditor because they “created the money out of thin air.”
Let’s say I rob my neighbors and then start lending out their money. Do the debtors not have to pay me back because I obtained the funds illegally?
That’s the part that I don’t get. Most people would agree with me that I should be prosecuted, the debtors would pay to a trust and the money returned to the people I robbed.
Well, maybe your motions explain more. And I have no moral problem with arguing whatever it takes to avoid judgments. After all, I know what the creditors and collectors do and get away with, the law and “right and wrong” have nothing to do with life in America.
But you definitely make it clear that it’s very hard to avoid judgments and that’s why I mostly encourage people who are judgment-proof to default on their unsecured debt. They can ignore the summons, get the default judgment against them and live with it.
The banking issue is very important.
Having a (secured) credit card goes a long way, but most people need a bank account.
The easiest solution is to become an authorized user (or simply get the online banking login info and debit card) for an account set up by a trustworthy friend or relative with your money. Judgment creditors can’t clean out that bank account.
It really depends on each individual’s situation. A few hours of planning goes a long way.
It’s amazing how many people have judgments against them and the creditors never tried to collect. I’ve had clients with homes and large equity and they eventually just settled for about 20-50%.
As happened with you, sometimes the debts are sold. And that’s great news, because a debt buyer can rarely validate the debt. But, as you experienced, you can be in for a fight.
I don’t know if you saw the recent decision about ATTORNEYS for collector being liable for FDCPA violations in court. Hopefully many debtors will be able to get at least statutory damages for false statements and unfair practices by lawyers in court.
You’re also totally right about the arbitration fraud. I also settled an MBNA account for a client once. Their lawyer promised to delete as part of the settlement and then LIED about it. I left the recording of him stating that the account would be deleted from the credit reports on his VM. They deleted and sent me a letter stating that in the future they would only deal with me in writing. That was funny. But it’s NOT funny that your legal rights were eliminated by mandatory arbitration.
Also, it’s really good to see your description of the various creditors’ actions after you stopped paying.
HOWEVER, to all the readers, do NOT assume that they will take the same actions when you default. They don’t sue EVERYBODY. Suing isn’t cheap and most judgments are never paid.
Creditors use certain criteria and continually CHANGE their practices.
If they feel it’s worth their effort and expense, they’ll sue. If not, they won’t.
*** The AMOUNT of the debt is deciding factor.
*** Your CREDIT REPORT is a deciding factor.
*** Your assets and your employment are a deciding factor.
*** Where you live is important. STATE law determines whether they can garnish wages.
Fair Isaac keeps advertising their COLLECTION scores, indicating the likelihood of a debtor making payments in the near future.
But there have to be at least 20 million people who are judgment-proof, struggling to pay their rent or mortgage and they WILL default sooner or later, whenever the next emergency happens. Those are the people who shouldn’t pay one more cent.
You can’t squeeze blood out of a turnip.
And one more thing. While you had such a hassle with all the court actions and your credit is ruined (hopefully not much longer), you COULD have been paying your accounts and STILL have lousy credit. My credit was perfect, but Juniper closed my account and WaMu raised my rate to 26%.
And as an update to FDRS, see the posts at http://creditsuit.org/credit.php/blog/C158/—a company claiming to wipe out credit card debt through their attorneys AND have the accounts removed from the credit.
they did NOT contact me again after the initial promise to convince me that they are legit. A reader is supposed to send me the power of attorney so I can contact them on her behalf.
According to her, FDRS did NOT assign an attorney to her and she couldn’t reach anyone there. I’ve seen her credit report and she had only one large account with Chase to default on. Chase is reporting the account “accurately” as late since she stopped paying them when she signed up with FDRS and now it’s a charge-off.
Apparently, FDRS has done nothing but take her money.
So thanks so much, Michael, for posting all the details and it’s very encouraging that you prevailed in court against Chase. Please send me an email.
Christine, thank you for generous offer, which I accept, with thanks. Please let me know how to upload my motions and court documents, and my current credit score documents to the credit repair forum you have so graciously offered to review.
Also, please note that I never simply stopped paying my credit cards, but disputed the charges using following:
All of my dispute letters were based in the above, and contained the following language (this is the Citi dispute):
Dear Citi Cards:
I am writing regarding the above account. I believe that my most recent statement is incorrect as a result of my review and investigation into the account.
I am disputing the amount because I believe that Citi Cards failed to credit my account for money or credits accepted from me. I believe that Citi Cards accepted my signed note(s) and other promises to pay into new bank money and credits, but failed to disclose those material facts to me. I believe that I am entitled to receive those new credits or Citi Cards would be receiving something for nothing, while profiting from the fruit and labor.
If Citi Cards did not create new credits or money, and you believe that I should not be receiving those credits, please sign an affidavit including the following 4 elements:
1. That Citi Cards does not follow Generally Accepted Accounting Principles
2. That Citi Cards does not follow the Federal Reserve Bank policies and procedures
3. That Citi Cards prohibits the party that funds the loan or extension of credit to be repaid
4. That Citi Cards disclosed to me that they would create new money based on my note or similar instrument and that I am not entitled to those credits or money
In the event that you do not provide said affidavit, this billing error dispute notice shall constitute prima facie evidence that said billing error is a bona fide dispute and that you will credit my account accordingly. Thank you for your time and consideration in this matter, as I am confident that Citi Cards will comply with the rules under the Fair Credit Billing Act. Please have all responses in writing, as this notice also constitutes my request for you to cease telephone communication. And I am also requesting that you close the account until further notice.
(Note: Not one bank ever responded to any of the questions posed in the letter. No confirmation of their accounting policies, no denial of money creation, nothing.) As you know, by statute they must investigate and answer each dispute fully with 6 months, or write off the disputed debt.
In a nutshell, I am contending that the banks created money out of thin air using my credit, signature and contract (credit card agreement), without disclosing this to me, or offering me compensation for funding their business.
1. When I signed up for the card (say for a $5,000 credit limit), I thought the bank would lend me money they had in their vaults(their assets). I had no idea that they were going to use my signature, and credit rating to establish a ‘bookkeeping entry’ as if I had on deposit with them the full amount of my credit limit, so that they could create money up to 10 times the amount of my credit limit ($50,000 minus the $5,000 they put in my account, for a $45,000 gain) using bank reserve requirements. They essentially used my credit, signature and contract (credit card agreement) to create money and fund their business—without letting me know. This could very well be fraud in the inducement.
2. Federal Statute allows banks to lend their money, but not their credit. With their (I believe) fraudulant bookkeeping entries, they obtained credit from the federal reserve (again 10x the amount of my credit line). In essence, they used me to fund their business without telling me, or offering to compensate me for the use of funds obtained from the fed by my signature and account opening. Borrowing to fund my credit card is not allowed under Federal statute, yet the banks abuse this every day—witness the incredible expansion of credit and consumer credit card debt because of these (I believe) illegal practices.
3. If they did what I contend as above, then they created money from nothing —essentially out of thin air by creating a secret deposit account of $5,000 (my credit limit) and borrowing $50,000 (10x reserve requirements) against it—which they then put to work at 10%-20%-30% interest. Each year, will give them interest profit of $5,000-$15,000 profit—all from my signature and their (I believe) fradulent entries.
4. Since the bank simply created the money, using my signature and contract with them to create money that they used to fund their business, they did not lend me anything, and have been paid back in full by their use of that money and profits made from it—which they should have shared with me, since I funded it.
Do the banks actually do this? Well the evidence is the rapid and astronomical expansion of credit card debt in the last 10 years. Yet no bank has ever directly answered the questions in my dispute letter, even though by not answering my dispute specifically they, by law, had to either answer specifically my dispute and discharge the disputed ‘debt’ (FCRA) within 6 months..
Of course they ignored this fact also and still sued me for a judgement, which I fought, and won, primarily because they refuse to answer the questions about how the account was actually funded.
Sorry again for the long post, I look forward to uploading more information providing more info to you and your readers.
Michael
I got sidetracked this afternoon posting about Money as Debt at http://creditsuit.org/credit.php/blog/comments/must_watch_money_as_debt_how_banks_create_money/
That 47 minute cartoon has to be the best explanation of why things suck as they do and just about anyone should be able to understand how the banks CREATE money from DEBT.
It also provides some SOLUTIONS, such as nationalizing the Federal Reserve and turning banks into non profits. The government would no longer pay INTEREST on its debt, resulting in lower taxes or funds for healthcare and other programs benefiting all Americans.
The non profit banks’ interest earnings could be used to fund projects that benefit society.
And of course the money supply would be REGULATED.
Fat chance of that happening, but it WOULD be a viable solution. Of course the banks wouldn’t allow this to happen.
It might be possible to set up this NEW monetary system AFTER most major banks go bankrupt and the entire system collapsed.
No doubt, what the banks are doing is immoral, unfair, unethical, but I’m not sure whether it is illegal. The GOVERNMENT is doing whatever it can to legitimize the banks’ conduct.
So anyway, I set up a private forum for you and a CreditFactors account (used the email you submitted with your posts here), am looking forward to see the motions and hopefully many consumers will find them useful.
Not only are the banks suffering losses from defaults, but litigation isn’t cheap either. If enough people stop paying their unsecured debt and file their motions to dismiss and discovery requests if they’re sued, maybe we can make a difference after all.
Christine, there are many very intelligent and learned people that believe the current financial system is in collapse and will fail because of fiat money and ever expanding money supply and unbridled credit expansion. You may be interested in a publication by Bob Chapman called the International Forecaster that has been sounding the alarm for a few years now.
Personally, I would not trust the government nationalizing anything—especially the money supply— to me that is letting the fox in the henhouse.
The answer that makes sense to me is the Gold Standard.
Gold is a finite commodity, you cannot simply make more of it. Mining new gold expands the money supply very slowly and gradually. If a dollar is worth (and can be redeemed) for say (example only) 1/100 gram of gold, then its value is fixed, and inflation is mitigated.
America left the gold standard in 1972—probably because Nixon had to figure a way to pay for the war in Vietnam, and he couldn’t print more money than the country had in gold reserves. The result has been a disaster for the working person—witness the end of the single wage earning family. Pre 1972 it was common for mothers to stay home and run the house, raise the family, etc.. Now, they do not have that choice. 2 incomes are required for most families just to survive. The system of fiat money, reckless money creation by banks, insanely high taxes, usurious interest rates, outright fraud and corruption has made a few very rich while making most of America wage slaves and the working poor.
As for your ‘well-off’ friends that don’t care because it doesn’t effect them—wait. When the world decides it does not want any more dollars because it’s not backed by anything tangible and is being printed so recklessly it is worth less tomorrow than it is today, everybody will feel the pain.
I will work to post my motions, etc by the weekend.
Thanks,
Michael
Ok, looking forward to see that.
“The answer that makes sense to me is the Gold Standard.
Gold is a finite commodity, you cannot simply make more of it.”
That’s true. But then you have to fight even more wars, this time to get more gold when you need more money.
“Personally, I would not trust the government nationalizing anything”
Would you trust them with the gold?
The saddest part is that the government is a direct reflection of the population.
They’re all people. Mostly Americans. Just like the corporate executives. In a relatively free society as America, the government is us.
“As for your ‘well-off’ friends that don’t care because it doesn’t effect them—wait. When the world decides it does not want any more dollars because it’s not backed by anything tangible and is being printed so recklessly it is worth less tomorrow than it is today, everybody will feel the pain.”
Of course. But that life will suck for everyone is not exactly uplifting.
I’m considering checking out the ValdiChy Project http://www.damanhur.info/en/html/ArcMagazineDet.asp?IDArt=56
It’s the only model I found that actually works, but the drawback is that you have to be financially independent, either having assets or income. And Italy isn’t a cheap place to live, especially with the dollar decline.
I just want to update here, I didn’t get the motions from Michael and if he’s reading, there are many people who could use the help.
In 2000 I was involved in an 11-car accident on a busy California freeway (freeway closure, fire engines, news helicopters, the works—no one seriously injured thankfully). There was no doubt in my mind that I was going to be sued by at least several of the other drivers (that’s just what California drivers do—get in accident, see instant dollar signs).
I was already beginning to have financial problems as almost all of my creditors switched to variable interest rates rather than the low fixed rates I had been enjoying for many years (they said this was for MY benefit). Needless to say, interest rates began climbing as did my credit card payments. Then came the “extra” fees. Over the limit fees, late fees, interest fees, etc. None of which was helping my financial situation. I began calling my creditors one by one and inquiring about paying off my debt at $0.75 on the dollar. Not a single one accepted my offer even though I explained that I could not continue paying at the levels being charged. My plea fell on deaf ears.
Then the accident happened. 10 angry motorists, with me directly in the middle of the pile-up. As chance would have it, one bill that didn’t get paid the previous month was—my car insurance.
So here I am. Pennyless, credit cards bills now totaling some $40,000, and no car.
Well, that was it. Game, set and match. I was beaten and broke. I immediately stopped paying on all of my credit cards. All that was left to do was wait until the first motorist or the first creditor sued me, and I would file for bankruptcy and take everyone down in one felled swoop—at least that was the plan.
One month passed, then two, then six—no lawsuits. I knew they were coming though. One year passed, then as two years approached I knew that the statute of limitations would run out on property damage claims from the accident so I began looking over my shoulder. Still no lawsuits. On the day before the two-year statute of limitations expired I FILED A LAWSUIT against some of the other motorists and then held it for a about two weeks before I sent them out for service of process. This would prevent them from filing a cross-complaint against me as the statute of limitations will have already run out for them. BINGO! Insurance companies couldn’t give me their money fast enough. Within two month I had settled all of my claims and had a nice bankroll under my mattress now.
But still my creditors were lingering out there. My telephone was ringing off of the hook with automated recordings to call this number or that number. I had always screened by calls anyway, so this wasn’t much of an inconvenience for me. I just turned off the telephone ringer and had friends call me on my cell phone.
Three years passed and no lawsuits, then as four years approached (the statute of limitations on credit cards in California) one creditor finally sued me. Thankfully, it was the creditor whom I owed the least amount to. I wrote to the attorney representing the assignee (E-Cast Settlement) and gave him the pitch that I had been waiting four years to give, “I’ll give you $250 as payment in full, otherwise I’ll use the $250 to file for bankruptcy and you’ll get nothing. The choice is yours.” They accepted.
Now the four year statute of limitations had run and my creditors couldn’t touch me. Woohoo! Free at last, free at last—or so I thought.
Then the nasty wholesale debt buyers came calling, and calling, and calling, and writing, and calling. It was insane what some of these people were telling me over the phone if I happened to pick-up. One debt buyer said, “Give me your bank account number so we can get an immediate payment of $100 and we’ll open up a brand new account for you at 0% and just transfer your outstanding balance over.” LOL. It’s called “reaffirming the debt” and it’s not something you want to do. Thank goodness I was smart enough to know that.
To shorten a rather long story, for $250 dollars I walked away from $40,000 worth of credit card debt. More than eight years has now passed and my credit report is now perfectly clean and my FICO is pushing 800.
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Now there are several factors that worked in my favor, and which I am going to let you all in on for future reference.
1. First and foremost, if you don’t already have one, apply for an American Express card. With AMEX, you are required to pay off your balance each month, in full. No revolving credit. This will keep an open line of credit on your credit report and you’ll have at least one credit card. Get rid of EVERYTHING else. Don’t just hide them away. Cut them up.
-- That has to be the WORST advice ever! Only a complete IDIOT would put himself at the mercy of AmEx, a company notorious for lowering limits and closing accounts for next to no reason. 4 - 6 cards are good and once they’ve been established a few years, even about 10 credit cards is quite acceptable. There’s no better insurance than credit cards, you don’t have to file a claim, you just use the money when you need it and if you can’t pay it back, you have the options described above.
2. Keep your phone number, even if you move. As long as the debt buyers are able to leave a message, them seem happy with that and won’t sue (get worried if they stop calling).
-- That’s COMPLETELY ridiculous.
3. Prior to stopping payment, get yourself a personal mail box (like from Mail Boxes etc. as opposed to a Post Office box). Shop around for one that has a lettered suite address, i.e., suite A or suite B. That way your address would be something like 1212 Main Street, Apt. B-101 (looks like an apartment address doesn’t it?) Yeah, fools everyone. A numbered suite like suite 100 will result in an address like Apt 100-140 (obviously a personal mail box, something you want to avoid). My driver’s license, car registration, utility bills, everything goes to my mail box address. I use my home address for absolutely nothing.
-- Good try, but no cigar. It fools only idiots like this poster. It does make it a little harder to be served if you don’t own your house and you MOVED since you stopped paying your credit cards, depending on the type of service required, which is state law.
4. Make sure you don’t have an Internet presence. Go Google your own name and see what comes up. Check out the usual class reunion websites to see if your mentioned or listed. If so, get rid of them or ask that your name be removed.
-- what a LUNATIC! It’s just UNBELIEVABLE that anyone would come up with something so stupid.
5. Make sure you don’t have any real property in your own name. This makes you a cash cow to debt collectors. Go see an attorney and have a Trust drawn up and transfer your real property into the Trust’s name. My Trust’s name is something along the lines of “OPM Estate” (OPM = Other People’s Money, LOL). You can name yours anything you like, just don’t use any part of your own name because debt collector will be searching the real property records.
-- Again, this does NOT work for many reasons. The property taxes are often issued in the name of the true owner (tax records are often online) and of course the transfer deeds show up in searches for your name. If you disclosed that you own your home on the credit application, they only have to look up the property history and they’ll see that you transferred the property in a trust. DUH!
6. Never call or write to a debt collector if you’re within the statute of limitations. Just ignore them—even though you may be tempted to. Just know you’re about to get the best of them.
-- Never? This really depends on the individual, I just posted several Open Letters to my creditors at http://mylitigation.net/. And if the debt has been sold to debt buyer, an EDUCATED consumer will likely prevail if they sue or even make a few bucks for counter claims.
7. I happen to answer my own phone at work. After a few calls, you can easily identify the debt collectors from other business calls. Debt collectors will use your full name and there is often other calls going on in the background. If I was ever unsure and since they didn’t know it was me, I would say that I wasn’t in and asked if I could take a message. So, the point is, if you don’t answer your own phone at work, go talk to the receptionist and tell them what is about to happen and ask that they just take a message if the person won’t tell them what the call is regarding (debt collector’s often use the phrase, “It’s regarding a personal matter.” Ding, ding. Debt collector alert. They can’t disclose what it’s regarding without violating the debt collection laws.
-- In most cases, I recommend writing to the collector and requesting that they not call at work. If they continue to do so, you have a solid counter claim. Watch for my suit against IC System who REFUSED to stop calling me.
There you go, seven easy lessons to walk away from all of your credit card debts—scot free.
-- There you go, another CLUELESS IDIOT giving credit advice, probably posted in many free credit forums. I suspect that the poster is a collector.
The object here is to get beyond the statute of limitations period in order to bar the debt collector from ever suing you.
-- The object for most of my clients is to not get judgments against them and the day the original creditor SELLS the account is what we’re waiting for. And in the meantime, we collect counter claims in the event the creditor sues.
PS: I still get an occasional call or letter from a debt collector, some 8-9 years after the fact. Now I just send them a letter, via certified mail, telling them not to contact me again (which they must do under the law) but—and this just makes my day each time I do it, I also include with my letter a photocopy of my hand giving them the bird! LOL.
“LOL” —that says it all.
“this just makes my day each time I do it, I also include with my letter a photocopy of my hand giving them the bird!”
If this isn’t a collector, s/he has to be one of the dumbest people ever.
I almost deleted the above post, but then decided to add my comments to the horrible advice because this is probably NOT the only site where s/he posted this.
If the poster really is just a dumb consumer, this posting shows WHY the banks can create money out of thing air and then have the audacity to charge us interest on it.
I DO hope that there is intelligent life with a real name, people who will take the time to read Web of Debt, to educate themselves and to discuss counter measures at the new RESISTANCE forum at http://creditfactors.com/resistance/
I, too, purposely quit making credit card payments in 2003. I would like to tell everybody who is suffering to simply stop paying. I never really saw a place to say so until I read Mark’s post. I agree with him all the way. You have to steel yourself ahead of time in preparation for the invasion of phone calls and letters. You have to know that the disruption can be hard on your household and on other family members. Kids must obey specific instructions about not answering the phone and to never, ever give out any kind of information at all. A couple years ago, Hurricane Rita was blowing through my house in the middle of the night when my 13-year old son handed me the phone—he thought it was an emergency—but it was an Asian lady demanding a check for $60! I brought this up in the lawsuits. Oh, yeah! The lawsuits! You have to be ready to learn all of the state and federal laws, to know all of the court’s rules, and to be disciplined enough to proceed in a diligent manner. You can’t run all over the place, angsting and shouting nonsense. You have to be able to think like a lawyer, but act like a sovereign citizen. That is why I stopped paying in the first place—my freedom and my dignity was being sucked away from me in monthly increments by the shysters that dangled shiny visions of easy money in front of me, then purposely made it impossible to ever repay them once I signed on the dotted line. They lied, they cheated, they stole. When the “assignees” begin suing, you have to keep in mind how you were screwed over by the original debtor. The assignees inherit those sins along with the debt. You have to read the Uniform Commercial Code and find out about assignments. The ONLY person that has lost anything in this whole debacle is YOU—all other parties are rolling in the money that you, in good faith, have forked over. Does everybody understand how wealthy the other side is? Does everybody understand that what makes them so obscenely wealthy was strategically milked away from YOU? It is important to never hang your head; you must strut into courtrooms and handle correspondence with full confidence in your position. You have to know what to ignore and what to attack. Remember: they do NOT follow the rules; you too are free to pick and choose whatever rules will strengthen your chance of winning. Keep your eyes open; note everything; read everything thoroughly. The plaintiffs ALWAYS make major mistakes that need to be jumped on and then expanded into an embarrassing predicament for them. I had one process server who handed me a Notice of Suit and then recommended that I contact the law firm representing the debt collector that was suing me because he knew that they “would work with me.” In court papers, I accused the plaintiff of training their process servers to put on a show of offering kindly legal advice so that the defendant (me) would be tricked into throwing away his legal rights. I won that suit. Another attorney sued in the wrong court; he was too inept to read the court’s rules barring assignees, money lenders and anybody charging interest to sue in that court. I won that one too. Another lawsuit named an original debtor with which I had no prior business and then attached an affidavit swearing that they had examined my account with this unknown debtor. It was incredible! I won that suit, but that particular debt collector is now trying new and improved tactics to set itself up for suing me again—this time with the correct original debtor as assignor. They have the right information now, since they gained so much from the first suit. Talk about a fishing expedition! I am ready for them; bring it on, LVNV!
Also, I could care less about credit and credit scores. I am finished with being hypnotized by the party line that says a person needs to borrow money in order to live a life. I pay cash for everything; cars, houses, computers—everything. If I need to make a deal, I go straight to the owner and arrange for payments—I never go to a lender for money. Never. I own a fair-sized house in a big city and have three cars in the driveway—one of them is a Mercedes Benz. I have two kids who have graduated from private schools. My husband and I took a year off from work. We simply quit. Five years ago, none of this was imaginable. We were miserable back then. Miserable enough to say “F** you” and miserable enough to fight back against the evil that was keeping us miserable.
Kathleen, it sounds like you are ready for a lot more than dismissals.
1) Debt buyers should never prevail in court, they rarely have admissible evidence.
2) You should file FDCPA counter claims and at least get a few thousand from them.
3) You mention LVNV and I had to stop posting about it, got me too much email and “how to” comments. Search works.
There was a class action against LVNV and its lawyers, for people like you who got sued by them.
You probably can get more $$$ if you sue yourself, and faster too. Of course LVNV suing YOU makes it easy, you don’t even have to pay the filing fee.
5) Original creditors - I don’t see the link posted above, here are Michael’s filings:
http://creditfactors.com/resistance/viewtopic.php?f=4&t=6
I’m still working on setting up the new forum, so the URL might change - search works.
And you really should watch the free videos at http://creditfactors.com/resistance/viewforum.php?f=2
I can’t believe that it took me so long to run across The Money Masters.
The money to pay the INTEREST on all the debt does not exist because money is created BY debt and it doesn’t normally include the interest.
That’s why we have more and more debt, loans have to be made to create the money for the interest.
THAT is why they inflated the real estate market since 2000. The market SHOULD have crashed then, but the corrupt bankers in charge decided that they’d make a lot more money if they started making mortgages to anyone (it’s not THEIR money they’re lending out), dramatically increasing the money supply and keeping the economy going for a few more years.
They CREATE most money through accounting entries when they originate the loans. And sometimes the Federal Reserve orders money to be printed and they get a bill for the cost of printing.
That’s what I’ll put in my next bank dispute. I’ll pay them as soon as the mint shipped my order.
I’m considering abandoning credit as you did and even taking it further, letting them get their default judgments. That’s a luxury you don’t have, since you got stuff they can take.
But it does worry me that the banks will continue to exploit and destroy and most likely we’ll end up in a major depression. America is beeing looted like a 3rd world country, turning into a third world country.
My Dad spent a couple winters in South Africa. The rich live in developments surrounded by 10 ft walls with barb wire and high voltage —very much like in a high security prison. I’d rather be on the outside.
I guess my point is that it’s difficult to isolate yourself from the problems. Your Mercedes might become the ticket to getting robbed or even killed. The bankers’ atrocities are affecting most people.
Food and fuel costs are rapidly increasing. The food banks are running low on food. Hungry and desperate people will do whatever it takes to get food.
It would be so easy for the government to take control of the Federal Reserve and start reducing the government debt and prohibiting fractional reserve lending, the creation of money by the banks.
But none of the politicians are even considering it, they all pretend like they don’t know.
So I’ll just continue to publish my open letters and lawsuits.
And it is incouraging that there are people starting the Common Good Bank and researching and publicizing the issues and SOLUTIONS.
