Collection agencies have a fairly high employee turn-over rate. Let’s hope the collector calling you is a “newbie”. He will be far easier to manipulate.

There are very few barriers to getting a job with a collections agency. A good collector will be well-spoken, able to play psychological games to great effect, be in control of his/her emotions. These are skills that the more successful career collectors have anyway.

A collector must also be focused and driven to make many calls every day. Like any other job that lives or dies on commission, a collector should be highly ambitious and money-driven. Money-driven? Let’s not mince words here: Greedy! It is their greed that will be their undoing, as you shall see.

Every time a debtor pays a collections agency, the collector handling that person’s debt gets a percentage of the payment towards his commission. The collector must collect a certain amount before he starts accumulating commission. Let’s say his monthly collections quota is $30,000. For all debts collected above $30,000, he might get to keep about 5% of that for himself. Therefore, if he finishes the month with $50,000 in collections, that would be $20,000 above his quota. Five percent of $20,000 is his bonus check: $1000. On some slow months he may not even hit his quota- which means he gets no bonus check.

The last few business days of the month are usually when the collector is the most desperate to get those payments in. Depending on how desperate/greedy he is, he will be willing to break a few rules to get that money. Therefore, it is best (though not necessary) to lay our trap on the last few business days of the month.

Do not wait until the last or even second to last day of the month. We will need at least four business days to carry out our plan of action. (If you lay your trap towards the end of the month, don’t worry about it. He’ll still be willing to break the laws regardless).

A collector has huge leeway in deciding what your repayment terms are. He wants to get the most out of you as he possibly can before the end of the month. A skilled collector is good at ‘feeling out’ the debtor’s financial and family circumstances by asking questions. He usually knows when you are fibbing, especially when he has your credit report right in front of him when speaking to you. By looking at your credit report, he already knows who you pay, how much you pay, how much equity you have in your house, where you work and many other things.

If he thinks you are capable of it, the collector will tell you that your only option is to pay the full balance immediately. If you are 70 years old and living on social security, he will cut his losses and take what he can get. $25 is better than nothing.

Are collectors harassing you? Congratulations! You have been handed a wonderful OPPORTUNITY. Yes, you heard me correctly.

Here at last are the industry secrets that the collection agencies and banks DO NOT want you to know. As far as I know, this is the only book of its kind.

In the hands of too many people, this information will be the ruin of the collections industry. So tell all your friends and relatives about this book!

I spent three years working for a rather notorious law firm where I harassed people day in and day out. Sorry about that. Let me try to make it up to you here.

Representing three of the top five banks in the U.S., my former employer is one of America’s largest collections law firms. At one point I was their training manager. Like most people in management, I started as a collector. I was a good one, obviously.

In this book, I will teach you how to:

1. Lure collectors into breaking state and FDCPA laws

2. Legally record these violations over the phone

3. Use those phone recordings to sue for damages

4. Settle your debts for pennies on the dollar

You may be in debt now but hopefully you won’t be after you follow my steps. Filing bankruptcy is to be done only as a last resort. And whatever you do, DO NOT turn your debts over to one of those debt settlement companies. They are all crooks. Every last one of them. You will regret it if you do.

The following is an excerpt from my book, The Debtor’s Survival Guide.

Most states have their own debt collection laws that go above and beyond the FDCPA. I am not going to include all of them here. If I did, this blog would turn into a 1000 page legal textbook.

To learn your state’s collection laws, go to Google and do a search for Arizona state debt collection law, (for example) or the laws in whatever your state of residence.

Most collectors do not have a good grasp of the states’ individual laws. This is simply too much information for one person to know. Collectors often break these laws- sometimes knowingly, oftentimes unknowingly. Learn your state laws. This is where we are going to trip them up!

The following is an excerpt from my book, The Debtor’s Survival Guide: An Easy Step-by-Step Guide in How to Catch Debt Collectors Breaking the Law and then Suing them for Damages.

Non-spousal states

1. North Carolina
2. Iowa
3. Illinois
4. Massachusetts
5. Ohio
6. New Hampshire

These are the six states where the spouse is considered a third-party. That means the collector is not allowed to discuss the debt with the spouse under any circumstances.

If you are lucky enough to live in one of these six states, you can easily get the collector to talk to your spouse about the debt. Just have him/her answer the phone when the collector calls. There is a 95% chance that the collector will freely (and illegally) discuss your debt with your spouse. Now the violations are racking up!

As you can see, it pays to know your state laws! Now go Google them.

The following is an excerpt from my book, The Debtor’s Survival Guide: An Easy Step-by-Step Guide in How to Catch Debt Collectors Breaking the Law and then Suing them for Damages.

Non-Community Property States

If you’re like most people and live in one of the 41 non-community property states and a collector tells the spouse he/she is responsible for the debt (which he often will), you have the collector on another violation.

You will need to enlist the help of your spouse to entrap the collector. When your spouse talks to the collecter, your spouse must pretend like he or she is intimidated. Never be combative or let on that you know your rights.

Here is how the conversation should go:

Spouse: I’m really worried about my husband’s/wife’s debts. What is going to happen to us if we can’t pay it? Can they take our house/garnish my wages/sue me? (Use one of those following three scenarios. We are fishing for false threats.)

Collector: Well, I can’t really say for sure (damn, he didn’t take the bait!) but as the spouse, you are legally responsible for his/her debts (Bingo! Another violation! One is better than none.)

See how easy that was?

The following is an excerpt from my book, The Debtor’s Survival Guide: An Easy Step-by-Step Guide in How to Catch Debt Collectors Breaking the Law and then Suing them for Damages.

Community Property States

1. Arizona
2. California
3. Idaho
4. Louisiana
5. Nevada
6. New Mexico
7. Texas
8. Washington
9. Wisconsin

In these nine states, your spouse’s debts are your debts -and vice versa. As the debtor’s spouse, you ARE legally responsible for the debt. The spouse can be sued and his/her wages can be garnished. However, this can only happen when the debt is question was incurred after the marriage. Spouses are not responsible for debts that pre-date the marriage. If the debt in question pre-dates the marriage and the collector tells you that you- as the spouse- are responsible- this is arguably a violation. To make it certainly a violation here is what you can say:

Spouse: When was this debt last paid? (do not use industry terms like charged-off, for it may tip the collector off that you are wise to the game)

Collector: It was last paid in March of 2004.

Spouse: Well, we got married in 2006. Am I still responsible for it?

Collector: By law, yes you are. (Bam! There’s another fine.)

The following is an excerpt from my book, The Debtor’s Survival Guide: An Easy Step-by-Step Guide in How to Catch Debt Collectors Breaking the Law and then Suing them for Damages.

Non-Garnishment States

1. Texas
2. South Carolina
3. North Carolina
4. Pennsylvania

If you live in one of these four states and a collector so much as implies he intends on garnishing your wages, he has made a false threat and you are entitled to another $1000. Garnishment is prohibited in these four states.

Here is an easy sample conversation you could use if you live in one of these four states:

You: What could happen to me if I don’t pay this?

Collector: It could end up in court.

You: And what happens then?

Collector: The judge could decide to garnish your wages. (the collector just broke state law and now owes you money.)

If that sample conversation didn’t lure him into taking about garnishments, try getting straight to the point:

You: Could my wages be garnished because of this?

Collector: Why, yes they could!

And there you go!

The following is an excerpt from my book, The Debtor’s Survival Guide: An Easy Step-by-Step Guide in How to Catch Debt Collectors Breaking the Law and then Suing them for Damages.

I will highlight the most commonly broken laws for you here:

A collector may NOT:

• call you before 8am or after 9pm in your time zone. Most collection agencies adhere to this rule. If they do not, it is usually due to human error on the collector’s part. For example, Tennessee, Kentucky and North Dakota are in more than one time zone. Some states like Nebraska, Florida or Indiana have a tiny section that is in one time zone, while the rest of the state is in another. If you live in one of these areas, it is possible a collector may illegally call you during prohibited hours on accident. Accident or not, it is a violation.

• continue to contact you after you have sent them a “cease-and-desist” letter. A C&D letter can be drafted by an attorney, notarized and hand delivered. If you don’t have the money for an attorney, simply write “DONT CALL ME NO MORE!!!” on a paper towel with a crayon. That will work too! Make sure you send it certified mail, so you have proof the collection agency got it. Make sure your put your name, address and phone number on the letter so they know who it is they are not to call.

• call you at work after you have told them not to do so. (if you do not explicitly tell him not to call you at work, a collector can legally call you there). There are a few states and municipalities that DO NOT allow collectors to call your workplace at all. California and New York City (the city only, not the state) are two such places.

• call your phone repeatedly with the intent to harass you. This is a grey area that collectors often exploit. Some states have laws that explicitly state that a debtor cannot call more than once a day, while other states are more vague on this point. (please refer to your individual state law). A good attorney should be able to argue that more than one phone call a day from the collector is “harassment”- unless the debtor has explicitly given the collector permission to call more than once in a day.

• use abusive language. If in the heat of argument, the collector calls you a name such as “dead beat”, “loser” or uses any profane language, this is a violation.

• contact a debtor after it is known he is represented by an attorney, or someone with Power-of-Attorney. Verbally informing the collector on the phone that you are represented by an attorney- or that you have someone with Power-of-Attorney over your affairs- is sufficient to stop any further calls to you. If the collector continues to call after that point (and you have this on recording) then he has violated FDCPA.
• call the debtor after a request for written Validation of Debt has been made. Before a collection agency contacts you by phone, he must first contact you by letter. Once you receive that letter, you may then ask the collections agency prove- in writing- that you owe the debt. This Validation of Debt should show your signature on the loan contract as well as an itemized list of charges you have incurred. You must request this by mail, and they must send it to you by mail. If the debt collector contacts you before you have received

• make false threats. This means exactly what it says and it is yet another grey area easily exploited by collectors. This is the area where most FDCPA abuses take place. I will be talking more about false threats later.

• use misrepresentation or deceit to collect the debt. This includes the collector pretending to be an attorney, a paralegal or even the attorney’s secretary when he/she is merely a collector. This includes the collector telling you that your debt is still legally valid when the debt is past the SOL (a common trick used by collection agencies that collect on out-of-statute debts). This also includes telling you the incorrect balance of the debt, the incorrect date it was last paid on or any other willful lie to get you to pay.

• disclose the debt to a third-party. Per Federal Law, a “third-party” is anyone other than 1) the debtor, 2) the debtor’s spouse or 3) the debtor’s attorney or power-of-attorney. The collector cannot legally discuss the debt with a third-party. A collector may call a third-party for the sole purpose of locating the debtor (when the debtor’s whereabouts is unknown). For example, a collector may legally call the debtor’s neighbor, distant relative, former employer, etc and ask them for the debtor’s phone number -or else ask them to pass a message on to the debtor to call back. Doing this is only legal when the collector does not have the debtors’ contact information. If the collector already has the debtors home or work number but calls the third party anyway- this is a violation. In addition, the collector may only contact the third-party once, unless the third party has given the collector incorrect information. Furthermore, a collector may not disclose the name of the company he is calling from unless he is asked first. (Some states have even stricter laws regarding third-party contact. I will discuss those states later).

Likewise, a collector MUST:

• read the mini-miranda at the very beginning of the call before anything else is discussed. The mini-miranda goes like this: “This communication is from a debt collector. Any information obtained will be used for that purpose.” The mini-miranda must also be present on all written correspondence from the collection agency. Failure to give the mini-miranda is one of the most common violations. The debt collector must give the mini-miranda every single time he calls you or you call him. Every single time. Let me say it again: every.single.time.

Again, the laws listed above are merely the most common FDCPA violations. There are many other FDCPA laws and you will need to study them in the appendix. Make yourself an expert.

For each FDCPA violation, the collection agency must pay a fine of $1000 to the debtor. In addition, collection agencies are liable to pay compensation for personal damages, if any.

If your lawyer is a good one, he can significantly increase your lawsuit settlement by arguing for personal damages. There are many cases where debtors have won judgments against collection agencies for hundreds of thousands of dollars.

As far as debts are concerned, the Statute of Limitations refers to the time-frame in which a debt is legally valid and can be sued. Once the debt has passed that time-frame, it is known as a ‘zombie debt’ and you are no longer legally obligated to pay it back. You cannot be sued, garnished or forced to repay debts past the SOL and any collection agency that tells you otherwise is lying (and thus breaking FDCPA).

Some collections agencies specialize in zombie debts that are past the SOL and I will teach you how to deal with these scumbags in my book.

Each state has its own laws regarding Statute of Limitations. Please look up your state on the list.

There are four categories of debts, each of which have their own Statute of Limitations. These four categories are:

1. Oral Agreements- There is no written contract between you and your creditor. Oral agreements are still legally binding, though harder to prove in court.
2. Written Agreements- You agree to repay a loan under terms spelled out in a document that has been signed by you and the person loaning you money. This is usually a less formal loan between two people.
3. Promissory Note- This is a contract you have signed with a financial institution that specifically spells out the interest, monthly payments and other repayment terms. Most mortgages and car loans fall under this category
4. Open Accounts- All credit-cards fall under this category, be it a Visa or MasterCard, a department store card or a gas card. These are revolving lines of credit with varying balances and no set monthly repayment.

I imagine most of my readers’ debts will fall under the Open Account category.

Sol