Why Charge Offs Shouldn't Be Paid

Many times when I review clients' credit reports I see paid charge offs.  My stomach gets a sick feeling every time. Paying off a charge off might help the score a bit because it changes the balance to zero, improves the debt ratio, and potential creditors like seeing that the alleged debt was paid, but it's still a derogatory account and will always be a derogatory account.

The truth is, that creditor has already been paid for that charge off, even before it was charged off, but they never told you.  These creditors always fail to fully disclose every important aspect of credit accounts. That voids the contract. It voids the account. The account and contract were never valid because of fraud and lack of disclosure by the creditor.

One thing these creditors fail to disclose is that the account is insured to protect them from loss of asset due to default or other credit loss.  Did you know that? Did they disclose that to you?  They're supposed to. In over 30 years of doing credit repair, I have only seen the disclosure 1 time.  ONE TIME, and that was years ago.  Haven't seen any disclosures in probably over 15 years or so.

I'll explain the insurance in a bit but here are some other things they don't disclose.  They don't disclose that they are prohibited from lending you money from their assets or their depositors' assets.  They are prohibited from lending you their credit. They are lending you your own money that you first lent them, which means that you funded the account that you are using to shop or spend. They are converting paper (your application, service agreement, loan papers) into negotiable instruments and depositing them into the newly created account to fund the account and essentially lend them money.

The National Bank Act of 1864 and National Banking Act of 1933 are where you can find the regulation that states these financial institutions cannot lend money from their assets or their depositors' assets.  Supreme court case law repeatedly has ruled that these financial institutions cannot lend their credit.  Here are a few cases but there are many, many cases that uphold this. 

"A national bank has no power to lend its credit to any person or corporation…" Bowen v. Needles Nat. Bank, 94 F 925 36 CCA 553, certiorari denied in 20 S.Ct 1024, 176 US 682, 44 LED 637.

First National Bank v. National Exchange Bank 29 U.S. 122, 128

California Bank v. Kennedy 167 U.S. 362, 367

Concord Bank v. Hawkins 174 U.S. 364

You will find the requirements related to the insurance banks have for each account in 15 USC Section 1605.  Let's talk about this insurance and how it supports my opinion that charge off's should not be paid after the fact by the consumer.

FDIC rules require creditors to charge off written contracts at 120 days of default and revolving credit accounts at 180 days of default.  However, creditors can file a claim against the insurance for a credit account at 90 days of default.  That's 30 to 90 days prior to when that creditor is allowed to charge off the account.

Once the insurance claim is launched the creditor shortly thereafter receives the money to pay off the balance of the account which they claimed is a loss of asset.  Please tell me, whose loss of asset was really affected?  Not the creditor because they didn't have any skin in the game.  How can I say that?

Remember I stated that these financial institutions are converting paper (agreements, applications, etc.) into negotiable instruments.  Well, they don't own these negotiable instruments.  They belong to the consumer whose name is signed on the bottom. Under Title 12, negotiable instruments are to be treated as CASH!  Whose cash?  The consumer's cash.  That is what is deposited into the newly created account. That is what funds the account.  The CONSUMER funds the account, not the creditor, so the consumer should be the recipient of the insurance payment, not the creditor who has not lost a dime!

But let's go over the insurance and charge off actions. Since they get a payoff for the insurance claim they place for the "default" , the balance is paid off.  Why then do they charge off the account 90 days later, when the default timeline hits 180 days (or 120 for written contracts)? The balance was paid off by the insurance so there is no amount left to charge off.  Did you ever think about that if you knew about the insurance?  

Since the consumer funded the account and continued to deposit more money in the form of "payments" and the creditor never lent any money or credit since that's forbidden by law, and then the creditor swipes the insurance payment by fraudulently claiming they are experiencing asset loss, why do they need to charge the account off?  The insurance paid it off. In reality, the account was paid as agreed from the get go by the consumer and credit reports should reflect that.

But since these liars will never report the truth and will not correct the record, the consumer needs to not give them more money by paying a charge off but instead, demand that they prove their claim. Demand that they prove they lent something, that there was equal risk and full disclosure, and a truly valid contract.  Since they cannot provide that, put the squeeze on them and remove that bad account from your credit, get them to close their file, and work on rebuilding your credit without paying that derogatory, false account that is void and was void from the origination of the account due to an invalid contract, fraudulently created by them, the fake creditor.

Hopefully this sinks in and you will stop and think about how they are trying to dupe you, before you pay off a charge off that you do not owe.  

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Repair Your Credit Before Buying Or Selling A Home

We're coming up on Summer and that is usually a hot time for buying or selling a home.  You need to consider the shape of your credit before you take the leap to either buy or sell real estate. It might seem like it doesn't matter how your credit is when you are selling your home but believe me, you are a prime target for the collection vultures. They're definitely preying on potential buyers but sellers usually have equity and they want to get hold of some of it as well.

For sellers, you're not going to be able to hide the public records like tax liens and judgments. The title company will almost always force you to pay those off before they will allow you to close escrow.  You may also get hit with claims from creditors and collectors that get wind of your transaction.  It's not hard for them to find out that you are selling your home so you really need to take care of your credit issues before you open escrow, and preferably before you even list your home for sale.  

Many times sellers are also going to be buyers. Again, you will want your credit in the best shape possible.  Even if your new lender doesn't require you to pay off certain alleged debts prior to funding, getting these things either paid or off your credit reports is most likely going to raise your credit scores, which will give you a better loan rate and save you thousands - even hundreds of thousands of dollars on your home loan and possibly other credit down the line. 

Some lenders will approve you for a loan with a mid FICO score of only 580. That is typically an FHA loan. However, debt to credit and debt to income ratios play a part in qualifying for a loan.  The higher your score, the better your interest rate. The less debt, and yes that includes 3rd party collector debt, the better your ratios are going to be. Many times your lender will tell you to pay off  the bad debts showing on your credit reports.  That's not necessarily the best advice, many times it is bad advice, but then again, they don't know credit repair the way a professional credit repair expert knows it.

I HATE, HATE, HATE anyone having to pay a 3rd party collector anything!  If you've read even just a few of my blog posts, you'll know that and you'll know that I stand firm in my claim that you don't owe a collection company a dime!  This is one of the main reasons that if you are contemplating buying or selling a home in the near future and your credit is not perfectly clear of these types of accounts, you need credit repair help soon.  You may also be in a position to need to rebuild your credit as well. This is where getting together with a professional credit repair consultant can really assist you in getting ready to buy a home.

Two other main items to address before buying a home are tax liens and judgments.  These are public record items but many times lenders don't pull public records reports on borrowers. So, if they are showing on your credit reports, you want to get them off. Otherwise, your lender might make paying them off a condition of  funding your loan.  Again, removing these types of items are where hiring an expert to assist you really helps you save many thousands of dollars.

I don't worry too much about removing bankruptcies from credit reports. It's not like you can hide the fact that you've had one (or more) in the last few years.  You have to disclose that on the loan application.  If you don't disclose it, you run the risk of being accused and possibly prosecuted for bank fraud. Don't go there.  

Bankruptcies are VERY difficult to remove from credit reports. You have to disclose the fact that you've had one when you apply for a home loan, so I just wouldn't worry too much about removing them.  Yes, attempt to remove them, but don't feel defeated if it doesn't come off.  At least it's not like a collection, tax lien, judgment or charge off showing a balance that might need to get paid in order to close escrow if it's showing on your credit reports.

Interest rates on home loans are still pretty decent but they're not going down; they're going to be going up. Now is the time to get to work on your credit if you're thinking of buying or selling a home in the near future. If you're thinking about buying in less than a year, then its probably best to hire someone to assist you. 

If you're needing to move and you're going to rent, if your credit has collections and public records, you are in the same position as a potential home buyer.  Landlords want to rent to people that have good credit. If they see you have tax liens,judgments, collections, charge offs with a balance higher than $0, they're going to choose to rent to someone with better credit  than you.  Your score will also reflect a lower number as well and that is a turn off to landlords.

 Credit repair is what I've done professionally for over 30 years.  My business partner has done credit repair for over 20 years.  We've taught other credit repair companies how to do it successfully. We are true experts. We want to help you purchase your home.  We want to help you keep the equity your home has earned.  We want to help you be able to rent your next home.  We want to help you. 

If you're ready to get your credit reports looking much prettier and your credit scores higher, we'd love the opportunity to help you reach your goals.  Email me today. Let us get you into your next home!  My email address is futurefico@gmail.com if you would like to contact me directly. You can also go to our website and fill out the form to get started with a free consultation. Just go to InsightCreditGroup.com so we can fight for you.

You Don't Owe Your Debt - Its All A Fraud!

You've been duped and you don't even realize it.  When you think you borrowed money, you are incorrect. When you think you have to pay back money for what you borrowed, you haven't learned the truth.

Most people grow up believing what they are told by parents, teachers, lenders, politicians (well maybe not so much them), our government. Few grow up challenging what they are being told. Few people stop and ask why or how. Few people stop and say, "Prove it!"  

I'm one of the few who has always questioned what I was told. I was always labeled as argumentative when I really was just looking for answers. Somewhere in my gut it seemed that things I was taught and things I was told was not the whole truth.  You may have had that same feeling at times in your life. But we are conditioned to just accept what we were told as the truth.  Its not our parents' fault. They didn't know any better because they were  raised the same way.  You just don't question authority and you should just respect your elders.  

Well, in my book, you should question what triggers a twinge of doubt in your gut and why respect your elders (lying government officials, lying banksters) when they are not telling you the truth and they have an agenda to keep you from knowing the truth.  Truth is power and they want to keep you from gaining any truth or power because they want it all for themselves.  Then they can control you and enslave you.

I've decided to post a video today. Please take the time to watch it. Its about money. Where it comes from, where debt comes from, and how its all a fraud that has been kept secret so you won't find out the truth.

There are 5 videos in this series. I encourage you to watch all of them when you have a chance.  They will help open your eyes to the scam that has been played on all of us.  I hope that it helps you understand that getting into debt is not your fault because that's how this system was set up - even if you maxed out credit cards, were allegedly irresponsible in your spending, and just got to a point where you had to walk away or give up trying to pay these bills for credit and loans. 

When the truth about this sinks in, you may get a bit angry, and rightly so.  I care about you and I want you to know the truth.  Please, if this video opened your eyes a bit, then share it. I would love it if you shared my blog with others. They too can watch the video right here but also, there's a lot of information that I give that may be what they need to help handle their own credit issues.

Thanks for reading, watching and sharing.  Enjoy!

If you have found this blog helpful to you, please consider donating as a sign of your appreciation for information I have freely given to you.  The "Donate" button is on the right side bar.  Thank you for your generosity.

How to Write Follow Up Letters For A Medical Collector's Validation Response

On my last post, I had already written so much that I thought it would be good to address the follow up letters you need to send when you get a supposed validation response for a medical collection in another blog post. Collectors, whether standard alleged debts or medical, have to comply with the FDCPA and also the laws that many states have that mirror the FDCPA.  But, medical collectors also have to comply with HIPAA. That is the Health Information Portability and Accountability Act.

First of all, when you demand validation from a collector for an alleged medical debt, you really should be altering your letter a bit.  Medical providers have to comply with very strict HIPAA regulations. HIPAA governs the privacy of medical information. Failure to comply with, or committing violations of HIPAA, come with stiff penalties and even jail time.  This set of laws isn't playing around.  When you demand validation for medical collections, you need to use HIPAA to your advantage.

Medical collections are most of the time actions of 3rd party collectors.  It is very uncommon to have collections from the actual medical provider.  They are in the business of medical stuff, not collections. They have billing and accounts receivable departments, but they usually turn accounts that are not paid for in 30 - 90 days over to a collection company immediately after that time has passed.  That is wonderful for you. 

I'm not saying you shouldn't be taking care of your medical bills, but really, who has that kind of money laying around?  If you don't have insurance or you do but they are slow to take care of their part, it affects your credit, and they don't give you time to make payment arrangements usually. No, they let the 3rd party collection companies do that.  Well, you know how I feel about 3rd party collectors - you don't owe them a dime!

I hate 3rd party collectors, and the 3rd party medical collectors really turn my stomach.  Here's why.  I'm in real estate. You have a property that you listed or you have a buyer that finally got his offer accepted and you're on the final stretch in escrow.  The buyer has been approved for a loan, credit is fine, no collections that have to be paid, then...out of nowhere, on the final credit pull by the lender prior to funding...OH CRAP!!!! There's a brand new medical collection that is super old, reporting on the credit report and its screwing up the score and it has to be paid and removed or this deal goes south!

YES, THAT'S WHAT THESE BLOOD SUCKERS DO!  They monitor or ping, or somehow find out someone is buying a house and they know that people will pay even old, time barred debts so that they can finally buy their house. These 3rd party collectors are unscrupulous, low life, law breaking, scum of the earth pricks that will do ANYTHING for money!  Okay, you get the idea, I really can't stand them!

Let's take a look at the types of responses you may get from medical collectors. The first one, and the main one I like, is the letter that straight out says they are discontinuing collection efforts and sending it back to the original creditor.  That is such a beautiful thing to see.  Sometimes they will even state in the letter that they are removing all entries of it from your credit reports.  You will still need to send a dispute letter to the bureaus to make sure that they take it off.  If it doesn't come off, send another dispute to the bureaus with a copy of the letter that the collector sent you stating that they are removing it. That should definitely make it go away.

The next type of response is very similar to other types of collections.  They say they have investigated and they are reporting correctly.  That is NOT validation!  That is HEARSAY! Sometimes when they address their response, they call it your request for "Verification."  You did NOT ask them for Verification, you asked them for Validation.  Validation is forwarding copies of the actual proof of the alleged debt and alleged account.  Verification is being willing to testify under oath that they have the documents on hand, know everything that has ever transpired on the alleged account, and testifying that everything that is reported is 100% accurate.  Your follow up letter tells them what I just said.  Hold them to it, call them on it (in writing, not on the phone), and never acknowledge the alleged debt or alleged account.  It is their job to prove it.

The next type of response is also very similar to other types of collections. They may respond just like the previous example, but they include a printed statement from the original creditor. Sometimes it will be a copy of your signature agreeing to be responsible.  Sometimes you can tell that they copy/pasted the signature.  That is still not validation.  That is a paper saying that you agree to be responsible for the services, but it is not a contract between you and them.  Where is that?  Where is the full accounting?  Where is the contract showing that they have been given the right to collect on the alleged debt from the original creditor?  They don't send those because they don't have it.  And if they give the full accounting, well, you've got them on HIPAA violations really strongly.

The next type of response is my second favorite response.  It is the one where they send a full accounting from the medical provider.  It has medical procedures, medications, supplies, you name it.  It has HIPAA violation written all over it! You see, that is your information that is supposed to be very private. They are never supposed to come in contact with that kind of paperwork.  This is the one where your response letter really gets to go after them and ream them good. Here's some of the stuff I tell them when I see those:

• They committed a Level 3 HIPAA violation that comes with not just financial penalties but can also get them up to 10 years of jail time.  A Level 3 HIPAA violation is "an offense committed with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, gain or malicious harm.
• They are in violation of Subtitle D of ARRA Sec. 13401 (Application of Security Provisions and Penalties to Business Associates of Covered Entities) 
• They are in violation of Subtitle D of ARRA Section 13407(1) - (Breach of Security).
• The last 2 can hold them liable for penalties under the HITECH Act.
• They will be in clear violation of HIPAA (..."no permissible business purpose in divulging protected health information to anyone on an account") should they ever inquire, report, update or verify anything on the credit report

ARRA is the American Recovery and Reinvestment Act which gave stimulus monies to the health care industries for IT resources. HITECH is Health Information Technology for Economic and Clinical Health. HITECH is Title XIII of ARRA. They have a lot to do with health and medical information being maintained and communicated through technological means. Think - filing and maintaining these very sensitive files online or on computers.  

Now, another thing I look for in their responses, is if they have dates of the original bills or services.  Many times, you will find that they are outside the Statute of Limitations for your state.  You can hit them with that as well.

One thing I ALWAYS include in my responses to the 3rd party medical collector, is the fact that since they are 3rd party, they have no rights to collect anything from the alleged debtor since there is no way they can prove they were on any original contract.  I always hit them with 73 AmJur, 2nd, Section 90.  They have no right to "subrogate" (substitute) themselves into a contract, whether it is by purchase, assignment, transfer, or trade. If they "bought" the debt, they did it on their own behalf, not at the request of any alleged debtor, and therefore are a "stranger to the transaction" (voluntary payee).

One of the final things I put in the letters to these vultures that clearly violate HIPAA, is that if they refuse to delete all information they furnished to any and all credit bureaus, and they do not destroy any information about any alleged account they claim to have with me, to prevent them from pursuing any more collection activity against me, and that should they sell, assign, transfer or trade the alleged account to some other entity to attempt collection, I will file a formal complaint to the DHHS OCR against them. (Department of Health and Human Services, Office of Civil Rights).

I like to hit them hard, throw the law at them and give a call to action - to get rid of it, get it off the credit report and never pull this with me again or allow some other 3rd party scumbag to attempt to mess with me either.  You can do the same.  Use the laws you find to go after them. Put the laws in their face. Its a game.  Defense is always important, but its your offense that wins the game!  Be strong. Be knowledgeable. Don't be intimidated! 

I love credit repair. I love writing. I love helping people. I love winning!  If you don't love writing, don't like research, don't look forward to repairing your credit on your own, but you want to fight, you want a chance to win the credit repair game, please call or email me.  My contact info is up at the top on the right side. I would like to help you!

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How Loans And Credit Cards Really Work

I have to admit upfront that I borrowed the title of this post from the video I am posting below.  I decided to post this video because I have so many friends and clients that always say that they really feel they should pay these old alleged debts because they did sign a contract with the creditor and they did use the card or account, so they really think they owe it.  I sure hope everyone who reads my posts gets it that you DON'T OWE Any 3rd party collector.  You have NEVER signed a contract with them and they were Never on the original contract.  The law and AmJur are very clear about this.  They do NOT have the right to substitute themselves into or onto a contract that they originally were not on. They are a VOLUNTARY PAYEE - a "stranger to the transaction" and the alleged debt was wiped out a number of times, including when they purchased the alleged debt.  That is the absolute truth!

But, original creditors, well, people have a very hard time wrapping their minds around the truth about not owing them.  We have been programmed, manipulated, and brainwashed by just about every institution, media outlet, and legal entity, to believe that we owe these alleged debts.  They don't want you to know the truth. Why? Follow the money, first of all, and secondly, the media pundits and many of the different sources that regurgitate this nonsense haven't bothered to do their homework so they are ignorant of the truth.

Hopefully, this video, which I absolutely love, and it makes it so clear, will help you understand why I continue to fight the system and scream the truth about credit and money.  Heck, even the mainstream news media "reported" during the "debt ceiling" debates that the FED (Federal Reserve) was going to "print more money..., create more money out of thin air."  I doubt that these blabberheads actually knew what they were reading, though.  Well, in this video, you are going to learn what the truth is and what the majority of people world wide are ignorant to.  This gentleman is not from here in the states, but that's okay.  The fraud is universal and is just as applicable here as there, and everywhere.  Its about an hour long, but one of the best hours spent.

Please watch, learn, and enjoy!

Debt Collectors ALWAYS Commit Fraud!

I constantly proclaim that you should never, ever pay a 3rd party debt collector.  I sure hope many of you listen to me.  It doesn't mean that they will just go away. Sometimes, yes they will.  But there are times when you will have to fight.  If you don't fight, if you don't demand validation, you are not going to win.  We need to stop being afraid of these thieves and fraudsters.  Demand they provide the proof that they have the right to collect. Demand that they prove you owe any money. Demand that they prove they have a valid contract with you.  THEY DON'T!! 

I don't go into extremes on this blog about my opinions on original creditors because plenty of people would think I'm nuts or have gone off the deep end.  Well, here's the the facts for me.  You don't help people with their credit repair and help improve their credit reports for over 2 decades and become extremely successful without researching and studying and digging into areas that the financial industry would rather you not find out about, without turning up proof after proof after proof that validates the facts of their outrageous, criminal behavior.  

I have done the research.  I still do the research. I love researching, and I apply what I learn. Guess what?  When I apply it to validation and dispute letters, when I apply it to my clients' case defenses when they get sued, these lying, thieving, law violating, tax cheating, insurance law breakers and fraudsters hit the road! They have to.  They don't want to be exposed for the thugs that they are. They are in violation of many federal laws. Harassment, extortion, RICO Act, mail fraud, bank fraud, FTC violations, FDCPA violations, FCRA violations...the list goes on and on.

I don't usually post videos, because I like to write and share information from my heart and soul with you.  I do have a passion for this.  But, today, this video falls right in line with my passion for justice, truth, and consumer advocacy.  I'm not a loon, and the gentleman on the video is not a loon.  This video shows how original creditors sell your alleged "debt" and how they and the 3rd parties make money whether or not you "pay off" the alleged debt.  You will hear from an actual bank employee who is in charge of selling these "bonds" (yes, they illegally convert to securities which create the "bonds"), and he admits, flat out acknowledges the fraud, without calling it fraud, of course! If you have about 20 minutes to visit here, please relax and watch the video.  It will be an eye opener for many of you.  

Please Enjoy!