SUCCESSFUL DEFENSES TO COLLECTION LAWSUITS

THE MILLION DOLLAR LETTER I have been calling this correspondence The Million Dollar Letter for over four years and it is probably the most widely used response to third party collection notices in the country. There are two simple reasons for this; the language of the request originates from the same federal law that it invokes and the results it has produced during this time almost always result in the third party debt collector discontinuing its collection efforts. To use this effectively, be sure you identify the collection notice as coming from a third party debt collector and not the creditor. Attorneys are not debt collectors, they represent either, but they are not debt collectors themselves. A third party debt collector is a corporation that never provided you with credit and is not in the banking or credit business. Most of us are familiar with the corporate names commonly known as creditors, such as Citibank, Discover, but companies like Asset Acceptance Corporation and NCO and First Select are not creditors. In response to a third party debt collector, do not send the same objection and dispute letters as for creditors, and do not use the arbitration process. If you do, you may waive your argument that there is no valid assignment, no consideration and be left with defending their collection in court as if they were the original creditor. You do not want this to happen. Always request a validation (much the same as verification) from the debt collector. You can also use the following example to request the same from a creditor, just correct the RE line to indicate the account number. The request for validation is very effective at showing you what information the collector, creditor or law firm for either has about your account. It also establishes the foundation for a counter lawsuit for violations of the Fair Debt Collection Practices Act. I do not recommend relying on this strategy exclusively in defending against any lawsuit. It is important to understand that there are many more procedures and strategies to implement in the event you are sued. This request for validation will eliminate most collection notices and phone calls after it is sent the first time. It is designed to cause the collector to follow a standard procedure. In most cases, it will cause a debt collector to refer the collection back to the original creditor. The creditor may respond by sending you a series of your most recent billing statements. Their answer will reveal what information they do not have for your account, such as the original signed credit application. This will greatly assist you in defending against any lawsuits.

[Subscriber] [Address] [City state ZIP] [Collector] [Address] [City State ZIP] [Phone number] [Date] Re inquiry dated ___: account no. (none, there is no account) Greetings: Thank you for your recent inquiry. This is not a refusal to pay, but a notice that your claim is disputed. This is a request for validation made pursuant to the Fair Debt Collection Practices Act. I dispute your debt collection-related allegations, deny the same, and demand strict proof and verification thereof. This dispute, denial, and demand are made in accordance with federal law. Please complete and return the attached disclosure request form. Please limit your communication with me to writing only. If I receive any telephone calls from your company, I will consider them to constitute harassment. Please be advised that unwanted telephone calls are a class 1 misdemeanor in this state and I will file a complaint against the caller with the attorney generals office. I maintain a telephone log of each phone call and in some cases, make an audio recording when necessary. Be advised that you have the right to remain silent. If you ignore this notice and contact me by telephone, you and your employees agree to allow me to make an audio recording of our conversation and you and your employees agree to allow the recording and any other information obtained to be used against you and your employees in a court of law. I will accept only your written communication. Be advised that I am not requesting a "verification" that you have my mailing address, I am requesting a "validation;" that is, competent evidence that I have some contractual obligation to pay you. You should also be aware that sending unsubstantiated demands for payment through the United States Mail System might constitute mail fraud under federal and state law. You may wish to consult with a competent legal advisor before your next communication with me. Your failure to satisfy this request within the requirements of the Fair Debt Collection Practices Act will be construed as your absolute waiver of any and all claims against me, and your tacit agreement to compensate me for costs and attorney fees. Best regards,

CREDITOR DISCLOSURE STATEMENT Name and Address of Collector (assignee): _______________________________________________________________ Name and Address of Debtor: _______________________________________________________________ Account Number(s): _______________________________________________________________ What are the terms of assignment for this account? You may attach a facsimile of any records relating to such terms. _______________________________________________________________ _______________________________________________________________ Have any insurance claims been made by any creditor or assignee regarding this account? Yes / no _______________________________________________________________ Has the purported balanced of this account been used in any tax deduction claim? Yes / no _______________________________________________________________ Please list the particular products or services sold by the collector to the debtor and the dollar amount of each: _______________________________________________________________ _______________________________________________________________ Upon failure or refusal of collector to validate this collection action, collector agrees to waive all claims against the debtor named herein and pay debtor for all costs and attorney fees involved in defending this collection action. X________________________________ Authorized signature for Collector Date _________________

Please return this completed form and attach all assignment or other transfer agreements that would establish your right to collect this debt. Your claim cannot be considered if any portion of this form is not completed and returned with the required documents. This is a request for validation made pursuant to the Fair Debt Collection Practices Act. If you do not respond as required by this law, your claim will not be considered and you may be liable for damages for continued collection efforts.

This is an example of what to expect in response to your request for validation, and how to respond if necessary. You will find the follow up example to the request for validation and a final notice you can send to the collector that fails to answer your request. The form can be modified if you want to send this second notice thirty days following your first request for validation because they did not respond. You only need to change the first line to I did not receive any response to my request for validation dated ___, a copy of which is attached. If the collector fails to produce the records or information listed in this second request, then send the request. To save you some time, they never produce these records. The collector or creditor will claim that those records are not required in order to comply with the Fair Debt Collection Practices Act, or that because they are the creditor, the Act does not apply to them, or because its a business account, the Act does not apply. Although correct, these records and information are required in court to prove their case, so by sending this letter now, you are establishing a foundation for your defense, and for requiring them to produce the information in court, in the event you are sued.

[Subscriber] [Address] [City state ZIP] [Collector] [Address] [City State ZIP] [Phone number] [Date] Re inquiry dated ___: account no. (none, there is no account) Greetings: Thank you for your recent response to my request for validation. This is not a refusal to pay, but a notice that your claim is disputed. Your response did not include sufficient information to establish your claim or meet the requirements of the Fair Debt Collection Practices Act. Again, I dispute your debt collectionrelated allegations, deny the same, and demand strict proof and verification thereof. This dispute, denial, and demand are made in accordance with federal law. I need documents or information that show how I might be obligated to pay you. Do we have an agreement, maybe a contract in writing? I have never heard of your company before. What is the nature of your business? Are you a depository or lending institution? Did you provide me any services or products? If you did, please list them and be specific. What did I buy from you? Did either of us rely upon the other to perform? When did you solicit my business or do you have any records showing that I solicited your business? If I owe you money as you claim, then what is your obligation to me? If you claim to be the assignee debt collector for a particular creditor, do you maintain a valid license and bond to engage in this particular collection activity in this state? What are the terms of the assignment? What are your rights and liabilities and what are the assignors rights and liabilities under the purported assignment agreement? When did I consent to the assignment and do you have evidence of that consent? What provisions of the purported assignment agreement describe my rights and liabilities under its terms? In what manner did I benefit from the purported assignment? Is the purported assignment within a class of contracts, the performance of which might exceed one year? Please include a facsimile of this agreement and any other supporting records in your reply. Please answer these as soon as you can and be specific. If you dont provide me the information requested within thirty (30) days I will consider the purported debt to be invalid, that you made a mistake, and that you agree to sanctions imposed against you and your organization for knowingly continuing a frivolous claim against me. Please limit your communication with me to writing only. If I receive any telephone calls from your company, I will consider them to constitute harassment. Please be advised that unwanted telephone calls are a class 1

misdemeanor in this state and I will file a complaint against the caller with the attorney generals office. I maintain a telephone log of each phone call and in some cases, make an audio recording when necessary. Be advised that you have the right to remain silent. If you ignore this notice and contact me by telephone, you and your employees agree to allow me to make an audio recording of our conversation and you and your employees agree to allow the recording and any other information to be used against you and your employees in a court of law. I will accept only your written communication. Be advised that I am not requesting a "verification" that you have my mailing address, I am requesting a "validation;" that is, competent evidence that I have some contractual obligation to pay you. You should also be aware that sending unsubstantiated demands for payment through the United States Mail System might constitute mail fraud under federal and state law. You may wish to consult with a competent legal advisor before your next communication with me. Your failure to satisfy this request within the requirements of the Fair Debt Collection Practices Act will be construed as your absolute waiver of any and all claims against me, and your tacit agreement to compensate me for costs and attorney fees. Best regards, [Subscriber]

This is another example I believe to be valuable in giving you the language you need to respond to those rude collection notices you might receive from an attorney in response to your request for validation. It can also be used to respond to offers to settle the collection account with a reduced payment. Please be careful to read the following section that explains the problems you might expect from making any settlement payment. [Subscriber] [Address] [City state ZIP] [Attorney] [Name of Creditor] [Address] [City state ZIP] [Phone] [Date] RE [Name of Creditor]; Account No. 0000-0000-0000-0000 Greetings [Name of Attorney] Thank you for your recent response to my letter of inquiry dated ______; however, you have failed to give sufficient information regarding the alleged debt that you are attempting to collect. Before I consider any offer or settlement terms, I will need the additional information that you have not provided. Please identify or describe any losses or injuries incurred by your client. Explain whether or not your client lent me any money or the manner in which the disputed credit account was originated. Best regards, [Subscriber]

If you want to finish the series of communication in the event that the collector fails to satisfy your request, you may use the following example as your final notice. [Subscriber] [Address] [City state ZIP] [Collector] [Address] [City State ZIP] [Phone number] [Date] Re inquiries dated ___ and _____ (see attached copies) Greetings: I have made two separate requests for validation (see attached) and your response or lack of response fails to comply with the disclosure requirements of the Fair Debt Collection Practices Act. Enough time has passed to allow you to comply but you have failed to meet the legal requirements of the law. It is apparent that you have no claim and that you have no records or evidence to support any claims against me. You have not provided me with any evidence to establish that I owe you any money. Your failure to respond in a timely manner is therefore deemed as an admission that you are not able to support your claim of debt against me. Please be advised that should you initiate a lawsuit against me without having proof that I owe you anything at all, I now have evidence that you are advancing a frivolous lawsuit. Starting a frivolous lawsuit may subject you to sanctions by the court, including costs, fees, and penalties. I urge you to carefully consider your course of action from here on out. Best regards, [Subscriber]

No more communication is necessary. These two letters are enough to accomplish your objective of determining what information the collector or creditor has about you. This will better prepare you for any possibility of a lawsuit and restoring your credit history. The following instruction supplements this procedure to give you a better understanding of why it is effective. These strategies can be relied upon when a creditor assigns, sells or transfers a debt to a third party collector without the consent of the debtor. The object in corresponding with collectors is to enforce the protections under the Fair Debt Collection Practices Act by first requesting a validation of the purported debt. Lawyers and law firms are not organized as debt collection companies, but may sometimes represent third party debt collectors. Sometimes it is confusing because of the notice they include at the bottom of their collection letter This is an attempt to collect a debt, and any information This does not mean that the lawyer or law firm is the actual debt collector, only that they want to avoid the liability under the Fair Debt Collection Practices Act which made attorneys liable in 1996. If you are not certain who they are or who they are representing then ask over the phone or send them a request for validation. I have found that even though a debtor might have owed the original creditor (it doesnt matter whether he did or not), the third party debt collector is unable to validate the account simply because of the way they operate. In other words, the debt collector is never part of the original credit agreement; they get involved only after the debt is charged off to collections. The term charged off means that the creditor reported the unpaid account as a loss and claimed a tax deduction and if it was insured, filed a claim to recover it. The charge and subsequent assignment, when done in this manner renders the debt collectors claim invalid, not only because you cannot be compelled to pay a third party assignee without your prior consent, but because they simply cannot prove you owe even the creditor or that there was a valid assignment agreement. Most of these companies do not maintain the records needed to validate such claims because many people do not question them this way. I believe this might change as more people learn how the system works and use it against the collectors. Remember that the debt collector is not required to actually provide you with evidence or proof that you owe what they say you owe, new case law regarding the Fair Debt Collection Practice Act standards requires only that the debt collector confirm the correct spelling of your name and the dollar amount they say you owe. My form letter includes requests for more information, knowing that it is not required at this stage, but it does establish a foundation for them to be required to provide this evidence if they sue you. Most debt collectors do not sue anyone; their primary skill is in obtaining a payment commitment over the phone. Examples of proof of the debt would include some evidence that you derived a benefit from the alleged debt. It might also include a payment history and remember that a contract does not require a signature to be binding. The claimant (e.g. the debt collector) merely needs to establish that the debtor

derived some benefit from the collector. They do need evidence of your signature connected with the terms of any contract they want to enforce, specific to a certain provision. But they can sue you for what is called account stated which avoids the problem of proving the existence of a written contract. The facts of any collection today would never satisfy these requirements, unless the debtor paid money to the debt collector or was given the ability to use a line of credit with the debt collector and failed to refuse it. Some debt collectors will actually send you a credit card or a check stating that if you failed to refuse the offer, you will benefit from the new contract. There is a clear distinction between a creditor and a debt collector. A debt collector is not, in any way, a creditor and every aspect of the debt collectors business is regulated under the Fair Debt Collection Practices Act. After several years of discussing this book with subscribers, I decided to include this section to help others prepare for what to expect when they follow this process. You must first learn to recognize the differences between a debt collector and a creditor (or the assignee creditor). In cases where a creditor has assigned your account to another creditor who is in the business of providing credit services and may be a member of Visa or MasterCard, you should consider the collection as if it were undertaken by the original creditor. In the case where a creditor assigns your account to a third party debt collector, a business that does not provide credit services and is not a member of Visa or MasterCard or any of the other credit card technology associations, you would respond with a request for validation and your defenses would be those explained in this chapter. Typically, you may receive a notice from the creditor that your account has been charged off to collections, and a subsequent notice from a company that you have never heard of, requesting payment. The collector is usually not represented by an attorney, but if it is, the response is the same, send a request for validation. Just like actual debt collectors, attorneys are required to include the debt collector notice, This is an attempt to collect a debt and any information obtained will be used for that purpose. But that does not mean that the attorney or law firm is the debt collector itself. The lawyer would be representing the debt collector in nearly every situation. Lawyers know that it is not a good business practice (too much liability) to work as debt collectors themselves, or engage their entire law firm in that type of business. This is because of the liability of being sued under the Fair Debt Collection Practices Act and because of the different licensing requirements in each state. First, they must be authorized to practice law in each different state, by each state bar, then as a debt collector, they must maintain a separate licensing for each state in which they want to do business (engage in collections). There is far less liability for the lawyer to either enter into a partnership arrangement with an established debt collector, or to create his own debt collection corporation.

You can expect a variation of many circumstances once an account goes into collections (is charged off). It is important to distinguish between the original creditor and the assignee (debt collector). Always request a validation from the assignee debt collector as soon as you receive the first collection notice in the mail or in writing. If the collector calls before sending the first notice, obtain the information about the caller's identity and collector for whom he or she is calling. Explain that you will not discuss the collection over the phone but they may correspond with you in writing. It is important to maintain an open line of written communication in the beginning of a collection with the assignee debt collector. End the call after you have explained this and collected the information, and do not discuss any aspects of the collection. 1. The collector may send you all the information it has from the account you had with the creditor. This does not establish any contractual obligation with the collector but only supports the fact that you do not owe the collector. This type of response is known as a "non-response" or a "failure or refusal to validate" and does not satisfy the legal requirements of the Fair Debt Collection Practices Act. 2. The collector may reassign the account back to the creditor. In this case, the creditor can no longer enforce the collection because it has previously "repudiated" the account. It has no more standing than any other third party collector at this point. 3. The collection may be assigned to another debt collector. Follow the same process as if it were a new collection (because it is). 4. If or when you begin receiving phone calls, make a record of the caller's name, company, phone number, address, date and time of call. Send a written communication to the caller requesting that future communication be limited to writing only. If they refuse to honor that request, then send a written complaint to the attorney general's office for your state, alleging that the caller is making unwanted, harassing and/or threatening phone calls to you. Include a copy of your telephone log. Send a copy of the complaint to the caller or his company. That should end the problem very quickly. Follow the procedures already explained in this text for stopping unwanted telephone calls. 5. The collector may tell you that if you do not pay by a certain date, they will report the unpaid balance to the Internal Revenue Service on a Form 1099 as imputed income. This type of income is the result of benefiting from not paying a debt and is taxable; provided that money was actually lent to you and that you had made payment arrangements and failed to maintain them as agreed. Imputed income does not result when you simply never pay the debt collector, and the way creditors operate today, no money is ever lent to the customer. And as for debt collectors, they do not even claim to be in the business of lending money, and without any evidence of a contractual obligation between you and the debt collector, their claim would be false. This text gives you an example of the type of response you should send.

The important aspects of defending yourself against debt collectors include the Fair Debt Collection Practices Act, simple contract law and the basis that a debt collector (assignee) cannot establish any contractual nexus to enforce a claim. This doesnt mean that the creditor does not have the right to assign the account to collections, the assignment clause permits this; however, the terms of the assignment fail to include the account holder (you), and this renders the actual collection unenforceable. Most importantly, if there is no written assignment agreement between the creditor and third party debt collector, in which the creditor (assignor) waives all claims against you, then there is no valid assignment. Further, absence of valuable consideration, an exchange between you and the debt collector of a benefit of detriment, then there is no valid assignment due to failure of consideration. A contract is an agreement between two or more people or entities in which obligations are created by what is known as "consideration." In law, the term consideration means the exchange of a benefit or detriment. The essential factors in determining whether or not a valid contract exists are first, there must be an offer, there must then be an acceptance and there must then be an agreement to perform under the terms and conditions of the contract. And while these are the basic elements of a contract, it is of no value unless it can be enforced in a court of law. To establish the validity of a contract, consideration must first be given. Remember that no process actually prohibits a collector or creditor from suing you. Even the United States president can be sued while in office. Anyone can file a lawsuit; however, if you follow the principles in this book, the collector or creditor will not be able to enforce its claim or get a judgment against you provided the circumstances are similar to what is described here. My entire letter writing process is based upon little known but basic principles of contract law. If people had a basic understanding of them the credit and collection industry would probably not exist today. Elements of a contract or agreement If I agree to purchase a service from someone, that agreement is not valid until I pay something for it or enter into a written "promise to pay. It is "consideration" that creates an obligation and it can be in the form of just giving something in exchange for the performance or benefits of the contract. If I handed you a book that you wanted and you agreed to do something for me because of that book, then we have a valid contract. This type of verbal contract is sometimes difficult to enforce because when tested in court, the parties may not be able to resolve genuine disputes as to the true agreement. The court might then make a judgment based on what would appear to be equitable. Consideration for a valid agreement involves an exchange of a benefit or detriment between two or more people or entities. A valid contract exists when there has been an offer, acceptance, agreement, and when consideration has been made. And these contracts are

easier to enforce when they are written; however, there are at least two more important factors involved in making a valid contract. Each party to the contract must be competent, or have the standing to contract, and the terms of the contract must be equitable for everyone entering into it. A contract is a matter of equity. In other words, a contract with someone who is insane or not of sound mind (non-compos mentis) is not valid or enforceable in any court because it cannot be equitable. A contract with a child is not valid except to the extent that it may be enforced upon the party who is not the child. A contract with a corporation is not valid unless it is directly with its board of directors or an authorized agent or officer as defined in the corporation's articles and by-laws. A contract with any government is not valid unless it is authorized by one holding an office as prescribed by law and the office holder must have the proper delegation of authority as required by statute. When a contract is not equitable it can be said to be unconscionable, and therefore, unenforceable. If I agree to pay for a service and enter into a contract to that effect, then it may be enforceable. However, if the written terms of the contract create only obligations for me, but not for the service provider, it can be said to be unconscionable. It could not then be enforceable in any court for two reasons, the first because it was not fair or equitable, and the second because such an action to enforce it would be barred by the statute of frauds (no contract in writing). On its face, such a contract could be found to be unconscionable when the service provider attempts to sue for breach of contract. Or, if I brought suit for the service provider's failure to perform, there's a good chance that because the contract was more or less one sided, I wouldn't be able to show the court that the service provider had any particular obligation as agreed to under the written contract. Contracts cannot be extended beyond the language of the written agreement. And agreements made in a written contract must be performed within a certain period of time. Even statutes and company charters have expiration dates. The request for validation process can benefit you in restoring your credit history. CHANGE OF ADDRESS This first step involves a little time and preparation. It can be avoided for now, but the earlier you complete this, the better your chances will be of avoiding a lawsuit. The standard method of determining which law firm or attorney will be chosen to file suit against you is based upon your mailing address. It is assumed by the collections department and the law firm that your mailing address is your place of residence. Since the bank must file suit in the county in which you reside, it must then locate a law firm that is local to this mailing address. If the collection department sees that you reside in Phoenix, Arizona, it will assign the collection to a law firm located in Phoenix, Arizona. This is

information that you provide, and when you move to a different address, you can easily complete a change of address form and include that with your monthly payment. What if you submitted a change of address form with an address located in the middle of the Atlantic Ocean? Provided that you would ultimately receive all mail, or that you pay your bills online so that this would not be a factor, no one would probably notice. In fact, if your account did go to collections, upon deciding to file suit, that department would attempt to locate a local law firm to the middle of the Atlantic Ocean. What do you think your chances of being sued would be at that point? There is a chance that the bank would have archived a history of previous mailing addresses, and be able to try the next most recent. But what if they did not? What if you sent the bank a change of address notice with an address in an area of the United States that had a population less than 4,000 people in one county? Your chances of being sued by a local law firm would be dramatically reduced. I hope you dont get the wrong impression, that John Gliha is saying duck and hide and thats your solution to debt problems. No, I believe this is a practical strategy and one that is consistent with my text and other strategies. Along with the correct statement used in asset protection and privacy methods, They cant take it if they cant see it; it may be equally true that they cant take it if they cant take you to court and obtain a judgment first. The only way to do that is to properly serve you with a summons and complaint, and with a local attorney, at least within a few hours of where you apparently live. I have compiled a list from the World Almanac 2003 of every county in the country where the population was under 2,000 people in 2001 and between 2,000 and 4,000 people in 2001. This edition does not include any mail box services, but you can easily locate any post office boxes in these areas. You will have difficulty finding a mailbox service for the same reason that the bank will have great difficulty finding a law firm in these counties. However, an Internet keyword search and searching at websites for services such as Mail Boxes Etc., The UPS Store, and Pak Mail will be to your advantage. You may need to obtain their consent to open a box via mail, and if they accept, they will want to see two photo identifications, and have you complete and Form 1583 required by the post office. Once you are able to open your new mail box, you can complete the change of address notification for each credit card account to which you wish to apply these strategies. The mail they send you can then be automatically forwarded to your local address for response. I know that some of you will ask me What happens if I do this and they sue me anyway? Well, thats why I wrote the course, but in this case, your first response is to file a motion to dismiss for improper venue (without making any other motions) and explain how your residential address is where it is. This will only cause delay, but at least the lawsuit can be handled locally.

Pop. 2001 Alaska 1196 1914 Lake and Peninsula Borough 1675 Yakutat Borough 791 Haines 2333 Skagway-Hoonah-Angoon 3449 State County California Sierra Costilla Custer Ovray Sedgwick Colorado Dolores Hinsdale Jackson Kiowa Mineral San Juan Georgia Quitman Schley Webster Idaho Camas Clark Adams Butte Lewis Kansas Comanche Greeley Wallace Cheyenne Clark 1961 1503 1706 3114 2371 Coldwater) (Tribune) (Sharon Springs) (Saint Francis) (Ashland) 1002 971 3428 2856 3625 (Fairfield) (Dubois) (Council) (Arco) (Nez Perce) 2610 3921 2301 (Georgetown) (Ellenville) (Preston) 1837 800 1589 1537 809 586 (Dove Creek) (Lake City) (Walden) (Eads) (Creede) (Silverton) 3485 3647 3693 3882 2668 (Downieville) (San Luis) (Nestcliffe) (Ovray) (Julesburg) Pop. 2001 Seat of Government Bristol Bay Borough Denali borough

Decatur Edwards Elk Gove Graham Hamilton Hodgeman Jewell Kiowa Lane Lincoln Morton Ness Rush Sheridan Stanton Trego Wichita Woodson Kentucky Robertson Michigan Keweenaw Minnesota Traverse Mississippi Issaguena Missouri Worth Montana Carter Daniels Garfield Golden Valley McCone Meagher Petroleum Powder River Prairie Treasure Wibaux

3432 3325 3189 3008 2845 2671 2154 3591 3132 2091 3547 3385 3340 3488 2726 2408 3195 2538 3758 2294 2257 3999 2225 2355 1375 1998 1243 1019 1900 1938 488 1824 1216 802 1050

(Oberlin) (Kinsley) (Howard) (Gove) (Hills City) (Syracuse) (Jetmore) (Mankato) (Greensburg) (Dighton) (Lincoln) (Elkhart) (Ness City) (La Crosse) (Hoxie) (Johnson) (Wakeeney) (Leoti) (Yates Center) (Mount Olivet) (Eagle River) (Wheaton) Mayersville) (Grant City) (Ekalaka) (Scobey) (Jordan) (Ryegate) (Circle) (White Sulpher Springs) (Winnett) (Broadus) (Terry) (Hysham) (Wibaux)

Arthur Banner Blaine Grant Hayes Hooker Keya Paha Logan Loup McPherson Rock Sioux Thomas Wheeler Fallon Granite Liberty Mineral Sheridan Sweet Grass Wheatland Nebraska Boyd Brown Chase Devel Dundy Franklin Frontier Garden Gosper Greeley Harlan Hitchcock Nance Pawnee Perkins Nebraska Nevada Storey Esmeralda Eureka New Mexico Harding

411 802 548 741 1099 749 948 776 709 536 1728 1399 705 858 2761 2899 2096 3843 3940 3585 2153 2394 3542 3974 2073 2203 3495 3066 2220 2049 2670 3759 3082 3969 3015 3153 3253 3467 978 1632 772

(Arthur) (Harrisburg) (Brewster) (Hyannis) (Hayes Center) (Mullen) (Springview) (Stapleton) (Taylor) (Tryon) (Bassett) (Harrison) (Thedford) (Bartlett) (Baker) (Philipsburg) (Chester) (Superior) (Plentywood) (Big Timber) (Harlowton) (Butte) (Ainsworth) (Imperial) (Chappell) (Benkelman) (Franklin) (Stockville) (Oshkosh) (Elwood) (Greeley) (Alma) (Trenton) (Fullerton) (Pawnee City) (Grant) (Loup City) (Virginia City) (Goldfield) (Eureka) (Mexico)

Catron Debaca North Dakota Slope Adams Bowman Burke Divide Foster Grant Griggs Hettinger Kidder Logan McIntosh Nelson Renville Steele Towner Oklahoma Cimarron Ellis Harmon Harper Roger Mills Oregon Gilliam Sherman Wheeler South Dakota Harding Hyde Jones Sully Aurora Bennett Buffalo Douglas Faulk Haakon Hand Hanson Jackson

3512 2138 754 2523 3124 2191 2203 3624 2775 2628 2650 2666 2221 3306 3563 2542 2191 2770 3023 3952 3155 3464 3331 1851 1827 1513 1292 1600 1118 1514 3015 3554 2014 3421 2543 2099 3665 3294 2846

(Reserve) (Fort Sumner) (Amidon) (Hettinger) (Bowman) (Bowbelis) (Crosby) (Carrington) (Carson) (Cooperstown) (Mott) (Steele) (Napoleon) (Ashley) (Lakota) (Mohall) (Finley) (Cando) (Boise City) (Arnett) (Hollis) (Buffalo) (Cheyenne) (Condon) (Moro) (Fossil) (Buffalo) (Highmore) (Murdo) (Onida) (Plankinton) (Martin) (Gann Valley) (Armour) (Faulkton) (Philip) (Miller) (Alexandrie) (Kadoka)

Jerauld Lyman McPherson Mellette Miner Perkins Potter Sanborn Stanley Ziebach Texas Borden Briscoe Loving McMullen Motley Roberts Sterling Stonewall Terrell Throckmorton Armstrong Baylor Cochran Coke Collingsworth Concho Crane Crockett Culberson Dickens onley Edwards Hall Hemphill Hudspeth Jeff Davis Kinney Lipscomb Mason Menard Oldham Reagan Real Schleicher Shackelford

2275 3969 2805 2082 2839 3284 2544 2617 2754 2517 677 1710 70 849 1338 854 1336 1576 1005 1757 2129 3986 3689 3873 3135 3917 3919 3919 2774 2705 3836 2044 3848 3346 3318 2211 3430 3034 3805 2324 2149 3214 3083 2963 3310

(Wessington Springs) (Kennebec) (Leola) (White River) (Howard) (Bison) (Gettysburg) (Woonsocket) (Fort Pierre) (Dupree) (Gail) (Silverton) (Mentone) (Tilden) (Matador) (Miami) (Sterling City) (Aspermont) (Sanderson) (Throckmorton) (Claude) (Seymour) (Morton) (Robert Lee) (Wellington) (Paint Rock) (Crane) (Ozona) (Vanhorn) (Dickens) (Clarendon) (Rocksprings) (Memphis) (Canadian) (Sierra Blanca) (Fort Davis) (Brackettville) (Lipscomb) (Mason) (Menard) (Vega) (Big Lake) (Leakeu) (Eldorado) (Albany)

Sherman Upton Utah Daggett Piute Rich

3185 3283 905 1387 1979

(Stratford) (Rankin) (Manila) (Junction) (Randolph)

Once you have completed the first change of address, you should do one more after three months. This will greatly improve the possibility that the creditors will not maintain more than two addresses for you at the same time. One word of caution, they can easily look into your credit file to review more addresses, so it is very important that when you begin the change of address procedure, you pull your credit file from all three bureaus and dispute the listing of your personal residence by stating that it is not correct, and then provide them with the correct one, the one you would not mind showing to creditors. FACTS YOU SHOULD KNOW ABOUT SETTLEMENT OFFERS You must be very cautious, and even avoid all partial settlement offers, either directly with the creditor, collector or through debt consolidation. You will have to pay federal income tax on the difference between what they said you owed and the amount you paid to settle the account. After you settle the account under the new terms, or even if you do not settle the account because you failed to make all payments, the creditor or debt collector will send you a copy of a Form 1099 that it will file with the IRS. When you file your next tax return, you will need to include the amount on the 1099 as imputed income; if you do not, it might cause an audit or deficiency notice. If you do not file, you will receive a deficiency not or summons for an audit. The following example is a response to a notice that the amount you did not or will not pay will be reported as imputed income. This is their attempt to coerce you into maintaining your payments. The response explains the problem and the reason why they cannot legally file this report, unless you make a payment arrangement and unless they actually lent you something.

[Subscriber] [Address] [City state zip] [Bank] [Address] [City state zip] [Phone] [Date] Re 1099 for uncollectible account; No. _________ Greetings: I recently received a communication from you indicating that if I did not pay you money to satisfy what you claim to be my debt to you for the above stated account, that you would send me a Form 1099 and report this nonpayment to the IRS as my income. Please be advised that imputed income can only be reported when there has been a settlement arrangement and a failure of payment according to its terms, and only when money was actually lent. If you carry out this scheme, my CPA will provide expert testimony that I was the depositor in this account and that you owe me the return of my deposit (credit limit). You will not have lost any money because you lent me nothing. When the account was opened, you entered a dollar amount of credit in my name but that money did not come from you or other depositors. That money came from my promise to pay. You created currency that never existed before the account was opened. This account is my receivable, not yours. If you wish to make false statements to the Internal Revenue Service, I will file a complaint with the Criminal Division of the Inspector General's Office at the IRS and hold you liable for all damages I might incur from such false statements. I am willing to forgive the return of my deposit provided that you discontinue your attempts to collect what you claim to be owed, and this includes reporting to the IRS. Best regards, [Subscriber]

The basic concept to remember in responding to any settlement offer, or collection notice, is to always explain that you are not refusing to pay, but that you are disputing the amount they claim you owe. The form letters in this course are very useful to that end, and many attorneys have contributed to making them focused and legally enforceable over the years. Another fact that is not widely known is that the IRS recently issued a letter ruling that precludes settled accounts that would normally qualify as imputed income from being classified or reported as such if the debtor is insolvent. That is, if the consumer is bankrupt or cannot pay his creditors, regardless of whether or not a bankruptcy petition has been filed, his is insolvent and there is no taxable event for imputed income on the settled account. UNFAIR AND ILLEGAL BINDING ARBITRATION After the credit reporting scheme created by the banks to coerce people into payment, and after the debt consolidation gimmick that tricks consumers into making payments longer than they would normally, commercial binding arbitration was next. Commercial binding arbitration is an excellent means of resolving disputes between businesses and labor unions and government agencies without taking the matter into the court system. However, requiring the unsophisticated consumer to utilize the same forum has been shown to be unfair and even illegal and unethical. In the mid-90s, banks began adding arbitration clauses to their credit card agreements and simply using the notice clause of the contract to add it in by sending copies with monthly statements. What most consumers do not realize until its too late is that these commercial binding arbitration clauses require the consumer to waive his rights to a jury trial, in fact, waive all rights to use the benefits of the court system, such as discovery. Discovery allows the parties to investigate each other claims in great detail. It also precludes card holders from joining class action lawsuits against those same creditors who routinely violate federal and state laws against large groups of their customers. The research behind this text shows that these so-called arbitration clauses are not binding because there is never a meeting of the minds or mutual assent. In other words, the unknowing customers are never given a fair opportunity to understand the change. The banks claim that the notice is adequate and that the consumer can close his account in response, this is not reasonable. Many courts agree that the banks cannot do this, especially when you have a network attorney represent you in your defense. In order to create your defense, you must object to the creditors notice of arbitration. The first opportunity is when you receive notice in the mail, follow the process they explain to state your rejection of the new terms. If at some point in the future, the bank claims you to be in default, they might file a notice and demand for arbitration with one of their arbitration firms, NAF, JAMS or AAA. Most of the arbitrators that work for these organizations receive most of their

income from these arbitration petitions filed by the banks. You can be sure that you have very little chance of a fair hearing. If you receive a notice or demand to arbitrate such as this, and usually they are filed by MBNA via the NAF via Wolpoff & Abramson or Mann Bracken, then you must file an objection immediately, but never, never and never participate in any way in the proceeding. After you file your objection, do not attend hearing, produce documents or anything. If you participate by filing anything other than an objection or attending a hearing, you will have waived your objection as to no valid agreement, and limited it only to the forum being corrupted or unduly influenced. This will preserve your defense if you are sued. You should also take the initiative, if they obtain an award against you, to file a motion in your local court to set aside or vacate the award for the same reasons stated in your objection. This will give you the best chance of prevailing. In some cases, an arbitrator will suspend the petition to arbitrate in view of your objection. If not, they should be expected to obtain the award and then apply to your local court to confirm it. The basis of your objection should be that there was no valid agreement to arbitrate and that the proceeding is or was subject to undue influence and corruption. Your objection should be signed and dated and include a certificate of service stating that you certify it was mailed to the forum and the attorney on a certain date (post mark date). Initial and date the certificate of service and include that with the objection and copies of their petition for reference. Keep a copy for your records. CORRESPONDING WITH THE CREDITORS ATTORNEY You can expect collection notices from attorneys, it is just part of the process. In fact, this is how you reach a final resolution of the collection problem. As of June of 2004, we began building an attorney network in every state. If there is a member attorney in your county, he will already be knowledgeable of these strategies and able to assist you through our office if you have purchased that service. In the alternative, if you only have recently purchased only this text, you can use these forms in your own behalf. The following response is what should be sent to the collection attorney representing the creditor (not the third party debt collector).

[Subscriber] [Address] [City state zip] [Bank] [Address] [City state zip]

[Phone] [Date] Re Collection Notice Greetings: I received your collection notice, a copy of which is attached for your reference. I understand that you will send me copies of monthly statements if I request a validation of this disputed account. I object to your claim and request validation, but more importantly, if you intend to sue me, I ask that you send me a copy of the contract on which your claim would lie. I need to see at least a copy of the instrument that bears my signature and date of execution. Do not ignore this part of my request. I need to know what specific terms of default to which you allege I agreed. Also, I need to know what steps your client undertook to mitigate any damages it claims to have incurred and any records that might evidence such damages. If you fail to provide it now, you will be compelled to produce these records by the court. My dispute is not relative to the provisions of the Fair Credit Billing Act. All undisputed charges on my account have been properly authorized. My dispute is that you incurred no losses, lent nothing and in fact, have been unjustly enriched by opening the disputed account, or will be unjustly enriched if you are permitted to obtain a judgment against me. I will expect your complete response including all requested records within thirty (30) days. Best regards, [Subscriber] LEGALLYH IMPEDING THE GARNISHMENT OR LEVY There are many creative ways to defeat levies (garnishments) and if you have prepared properly, the only money subject to this risk is your paycheck. It is very easy to protect bank accounts and other assets from levy. This is a subject best left to a qualified estate planner, usually an attorney or financial planner that is local to you. However, I have distilled a few strategies into this text that have been used over the years to legally defeat judgment garnishments. After receiving a judgment against you, the first step should be to request a wage garnishment exemption form from the clerk of the court, unless you already have one. Many people believe that filing an appeal is a solution, but the system is not fair in this regard. The reason why most people are sued is because they cannot pay, yet the courts require a bond in order to file your appeal that is equal to or twice the amount of the judgment. This is usually not a viable option for many people reading and relying on this text. Before I continue explaining about the exemption form, I wanted to mention one other procedure you might be able to use.

If you were sued, that is a complaint was filed and you were not properly served with a summons and complaint, in person as is usually required in all states and counties, and a default judgment is entered against you, you have a chance to have that judgment set aside if you file a motion to set aside or vacate the judgment for improper service of process. In some cases, if you are only a few days late in filing your answer, a motion for leave to answer out of time that argues your defense is meritorious, or that you answered late due to excusable neglect, and that you have exercised due diligence in answering as quickly as possible and that your untimely filing will not cause a substantial prejudice to either party, the court is inclined to grant your motion and accept the answer, or give you more time to file your answer. The name of the game in defeating collections after a judgment has been obtained when there is no chance to appeal or have it reversed is delay, delay, and delay. If you cannot file the motion to set aside for improper service, and you did file a timely answer and raise appropriate defenses, yet the plaintiff obtained a judgment anyway, you might be able to use one rule about allowing the court to set aside such judgments if they were obtained by fraud or misrepresentation. There are many people selling this as a solution to debt problems by itself and it is in no way what these individuals claim it to be. The courts are very skeptical about granting such motions, so they must be well founded in the facts and supported by an adequate memorandum of legal citations. These motions and even an appeal would not necessarily stop the collection process, but they might cause the judgment creditor to wait until the matters are resolved before proceeding. The worst part of a judgment is what is known as post judgment discovery. This is very much like a tax audit, you must answer all questions, usually without objection, and they are questions that will allow them to take any property you have not protected. Like I said, this problem can be avoided by planning. As an example, if a judgment creditor was able to sell my house and take the money, he would not be able to do that if I did not own my house, or if it was owned by my corporation. So while I would tell him the truth about its ownership, there would be little, actually nothing he could do about it. If I transferred the property to my corporation because of the lawsuit, then it would be reversed on the basis that I did it to defraud that creditor, but again, with planning, you wont face this problem. Dont be confused, an unsecured credit account does not attached to real estate like a mortgage would, but it might cloud your ability to sell the house without first paying the lien if it is recorded properly. In order to attach real property to an unsecured judgment, the judgment holder must ask permission from the court, and this is usually never given unless prescribed by state law. The reason is that it would allow plaintiffs to effectively re-write their contracts with customers and unfairly increase the customers risk while unfairly decreasing their risk to your prejudice and without due process or mutual assent.

In any case, these types of motions may assist you in recovering from a judgment. In one example, we were able to reverse a levy that had been active for about a year by simply filing a motion to set aside for improper service of process. Because the opposing attorney did not want to pursue the collection, he agreed to settle the account by returning all the money levied and discontinuing all collection efforts, rather than take it back before the judge and explain why he misrepresented having served the summons and complaint properly. While you may choose to file any of these motions, it will never preclude you from filing a petition in the local bankruptcy court. This does not mean you need to follow through and obtain a discharge and chances are it may never appear on your credit file or the local newspaper. It simply means that you will take advantage of the courts one hundred day automatic stay against the type of levy you are defending against. The day you file your petition and notify creditors, only those who are taking collection actions against you, they are prohibited by penalty of law from continuing to collect.