Taking the Debt Collector to Court

I had some things happen in my life that to this day, gets me upset when I think about them. Not to long ago I got a call from a debt collector that claimed because my name is Darnell Williams and I live in Harrisburg, I owed this large debt. I told the man that he had the wrong person. He called me a liar. Then I proceeded to tell the man off. At the end I told him if I am such a liar, sue me in court over the money and we will see who is lying and who is going to be sorry. He admitted that he had the wrong Darnell Williams and hung up. He was trying to get me to pay a debt that did not belong to me.


About 12 year ago, I got a notice for court action against me for non-payment of a dental bill for my youngest daughter. In Pennsylvania, a bill collector can take you to court to collect on a debt that is the debt belonging to your child, even if the mother of that child is the owner of that debt. This is the law that they thought they were going to take me to court on. They knew I had the deepest pockets.

However, knowing the law, I knew that my insurance paid 50% of the $2,000 bill. I personally paid 25% or $500 of the bill. My x-wife should have paid the last 25% of the bill. Not only did I pay my obligation under the law of 50% payment (the insurance $1,000 Plus $500 out of pocket), the bill was over 7 years past due. That means that in the Commonwealth of Pennsylvania, neither my x-wife because of the bill being past due nor I was obligated to pay because of meeting my obligation.

Yes, I was totally upset again and sent the debt collector who is a practicing attorney in the area a registered letter stating the facts behind the bill and told the attorney bluntly that if I show up in court with this information, I will counter sue them for violating the Fair Debt Collection Practices Act (FDCPA). Two days later, I got a letter from the attorney with a copy to the court dismissing the action against me. They never bothered me again.

Most people do not have 15 college credits in Business law or a child who has a BS in Criminal Justice as I do so you may want to see an attorney.

In your case, you may have forgotten about a debt because it is so old. It might be yours. So my first suggestion is to ask the collector to provide you with verification of the debt. If you request verification, the law says they must prove that the debt is yours and stop collection actions until they do so. Be sure you keep records of the request you sent to the collector for debt verification.

Once you receive the information from the collector, compare it with what is appearing on your credit reports. If they provide proof that the debt is yours and you have the money, by far the easiest thing to do is just pay what you owe and move on with your life.

But sometimes these debt collectors threaten to take your car, house, or put you in jail. Sometime, the debt is uncollectible because it is over 7 years old. Sometimes the debt belongs to your dead spouse. Never pay someone else’s debt especially with your personal check, no matter what the circumstances are. This could lead to big trouble for you down the road.

If you don't owe the money, or even if you do, I suggest you speak to a really aggressive attorney who would be willing to take your case on a contingency basis. The contingency fee would be based on suing the collector for using threats, like saying they will take your property, that appear to be in violation of the Fair Debt Collection Practices Act, or FDCPA. The FDCPA states a collector may not say they will take an action unless they are actually planning to do so. The collector may not legally seize any of your property to satisfy your debt unless the property is collateral for what you owe. There have been some big awards for violations of the FDCPA.

Either way, if this case goes to court, so should you. If you don't appear before the judge, the collector will get a judgment for the debt that can be used to garnish your wages in some states. The statute of limitations for suing in court to collect a debt looks to be six years in the state of Maine. There is a federal statute and a state statute on this. Typically the clock starts after the debt charges off. The definition of charge-off varies by state, but is generally 120 to 180 days from the date of your last payment.

Should the debt be uncollectible in court due to the statute of limitations, you can add yet another violation of the FDCPA to the list your attorney will be suing for. Bringing an action on a debt that is past the statute of limitations is not legal. If you go to court on your own, simply appear in court and submit documentation showing the statute of limitations has expired and the court should find in your favor. If, however, the debt is collectible in court, I recommend you determine how you will pay what you owe. Working out a repayment plan with the collector before your court date is even better.

Make Your Plan Then Work Your Plan!

I can’t stand it when people with great paying jobs have nothing to show for it then complain about others that have a pot to do you know what in. Equally as bad is watching people who don’t have good jobs but will drop a penny, nickel, or dime but will not pick it up. These people are what I call the “Stupid Poor.” In the book of Michael Jackson they are called, “Ignorant!”

You want to send your children to college? Well the time to start planning for it is the day they are born, not when they turn 14 years old. My oldest daughter and I bust out laughing at the idiots that we seen looking for help in sending their children to college only one year away from High School Graduation. The time to start saving for that new car is when your old car is still new. But if you want to keep up with your friends and have the bank and your employer own you, stop reading this Blog and go look at “Two Men And a Baby” or whatever the name of the show is on TV. I can’t help you. I am only concerned with people who want to be the head of their domain.

Let me give you some tools that can come in handy if you want to plan for that new expensive car or home.

You need a “Whirlpool Duet WFW94HEX 27" Front-Load Washer with 5.0 cu. ft. Capacity.” It sells for $935. If the Stupid Poor pays for it over 60 months at 20% interest, the Stupid Poor would only have to pay $25 per month, for a total of $1,500.

If they pay $46.75 per month, they can pay it off in 24 months, paying only $1,122. That is $378 less over 2 years.

http://www.mindyourfinances.com/calculators/savings-goals

If they can wait, by using the Savings-goal calculator, the same people can figure out how much they would have to save and at what rate to get the same thing. Saving $25 per month, they may be able to reach their savings goal of $935 in 3 years. They will also be able to avoid paying up to $550 more to wash their clothes.

The idea is to create a savings plan that will allow people to make their paycheck go further. You want to avoid wasting your money.

http://www.printablebudget.com/householdbudget.php

The link above will show you how to set up a Bill Paying Schedule for your household. Warning, this is no good if you do not have the discipline to follow it!

You can find other Savings Calculations by viewing this link by the Pa. SEC.
http://www.psc.state.pa.us/investor/calculators.html

GMAC -- Taking a Ten Year Risk

GMAC Inc. bond issue, General Motors Acceptance Corporation 7s of Sept. 15, 2021 sells for $955 as of April 19, 2011. That is a yield of 7.8% for about 10 years, 5 months. In this amount of time, the investor would get $45 bond appreciation plus $70 per year for 10 years plus $35 for 6 months. That is a total of $780 per bond.

For this amount of money, you, the investor will be taking some risk. The first risk is inflation risk. What is the risk that inflation will run above 8% in the next 10 years? If inflation runs above 8%, you will loose to inflation. Bankruptcy risk is a real factor since the bond S&P rating is only “B”. That is below investment grade but above the critical S&P “CCC” rating. As long as the company can pay, you, the investor will get your money.

According to Wikipedia, Ally Financial Inc., previously known as GMAC Inc., is a bank holding company headquartered in Detroit, Michigan, United States at Tower 200 of the Renaissance Center. With more than 15 million customers worldwide, Ally Financial provides a range of financial services including auto financing, insurance, mortgage services, and online banking.

In 2009, Ally employed 18,900 people. In 2008, the firm provided financing to 75 percent of the 6,450 GM dealers. On 24 December 2008, the Federal Reserve accepted then-GMAC's application to become a bank holding company. Ally returned to profitability in 2010, posting a net profit of $1.075 billion for the fiscal year. Ally plans an initial public stock offering in 2011.
As of 30 December 2009, approximately 14.9% of GMAC was owned by Cerberus Capital Management, 12.2 % by third party investors, 56.3% by the United States Treasury, 16.6% by General Motors (with 9.9% of that in a GM Trust).

The company's Global Automotive Services offer retail auto financing and leasing; dealer lines of credit for vehicle inventory, equipment or facilities; insurance coverages including retail vehicle service contracts and commercial insurance; and remarketing services through physical auctions and online services. Ally Financial also operates Ally Servicing (previously Semperian) within its Global Automotive Services division. Ally Servicing provides customer relationship management, servicing, and collection through several inbound call centers across the U.S.

Ally Financial's mortgage operations include Residential Capital, LLC (ResCap) and the mortgage activities of Ally Bank and ResMor Trust. Through these divisions, the company focuses primarily on the residential real estate market in the U.S. Business activities include the origination, purchase, servicing, sale and securitization of residential mortgage loans.

GMAC Home Services is the parent for GMAC Real Estate, formed by the purchase of Better Homes and Gardens Real Estate in 1998, and GHS Mortgage. Brookfield Residential Property Services purchased the GMAC Home Services business in September 2008. Brookfield is a wholly owned subsidiary of Brookfield Asset Management, a global asset manager located in Toronto, Canada.

Ally Financial's direct bank in the U.S., Ally Bank, offers savings products, including certificates of deposit (CDs), online savings accounts, interest checking accounts and money market accounts. ResMor Trust Company offers Ally-branded deposit products in Canada, including online savings, guaranteed investment certificates (GIC) and tax free products. Ally Bank and ResMor Trust Company are members of the FDIC and CDIC respectively.

However, the bonds talked about in this blog are not covered by FDIC or CDIC. Darnell L Williams does not own this issue but owns an issue that matures in 2018.

Cincinnati Bell Inc. Bond Investment

Some of you with a 9 to 10 year time horizon may want to invest in Cincinnati Bell Inc. 8.375% of 10/15/2020 bonds. As of April 18, 2011, the bond sold for $998.75. That means every year; the bond pays $83.75 and gives $1,000 at maturity. So the bond yields 8.394%. So one bond to maturity would give you an approximate total of $795.63.

Cincinnati Bell Inc. is a Standard and Poor’s “B” rated company.

Cincinnati Bell (NYSE: CBB) is one of the nation’s most-respected and best-performing local exchange and wireless providers, with a legacy of unparalleled customer service excellence and financial strength” according to the companies propaganda. Cincinnati Bell provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana.
The common stock sells for $2.69 as of April 18, 2011 day trading. It is giving a dividend of 40 cents with a yield of 14.87%. You may think that this is better than the bond yield of 8.394%. It is for now but the company earns 8 cents per share and spends 40 cents per share on dividends. So the dividend is not secure. Remember, the company does not have to pay a common stock dividend but must pay the bond interest.

Below is the business wire on the company.

CHICAGO, Apr 14, 2011 (BUSINESS WIRE) -- Fitch Ratings has affirmed Cincinnati Bell Inc.'s (CBB) Issuer Default Rating (IDR) at 'B'. Fitch has also upgraded CBB's senior unsecured ratings to 'B+/RR3' from 'B/RR4'. A full list of rating actions follows at the end of this release. The company's Rating Outlook is Stable.

Fitch's 'B' IDR for CBB reflects expectations for relatively high, albeit stable leverage and its diversified revenue profile. In addition, its wireline and wireless businesses generate strong free cash flows. Risk factors incorporated into the rating include the competitive pressure on CBB's wireline and wireless segments, as well as the expansion of its data center business. The $525 million acquisition of CyrusOne Networks, LLC (CyrusOne), a data center operator, closed in June 2010. With respect to the data center business, the acquisition represented CBB's first significant step outside of its traditional service territory. In Fitch's view, CBB's expansion of the data center business nationally and internationally entails additional risk.

As a result of the CyrusOne acquisition, CBB's year-end 2010 leverage rose to approximately 5.0 times (x) from 4.1x at the end of 2009. Leverage may be slow in returning to historical levels as the data center business - even with the acquisition - is not yet of a sufficient scale where its growth rates will significantly overcome the effects of competitive pressures on EBITDA in the wireline and wireless business. Additionally, given investment needs in the data center business to sustain higher rates of growth, Fitch believes CBB is unlikely to direct cash flows to material debt reduction, and, for the most part, leverage reductions will depend on EBITDA growth.
CBB's debt on Dec. 31, 2010, totaled $2.52 billion, an increase of $544 million from Dec. 31, 2009, with the rise stemming from the acquisition of CyrusOne in June 2010. At the end of 2010, the company did not have any debt outstanding on its $210 million secured revolving credit facility, and the amount available was $186.9 million, after the effect of LOCs.

On June 11, 2010, the company entered into a new credit facility consisting of a $210 million revolving line of credit and a $760 million secured term loan. The new revolver, which matures in June 2014, replaced a facility of the same size that would have matured in August 2012. The $760 million secured term loan B facility, which would have matured in 2017, was used to repay the $205 million outstanding on the previous term loan B facility, to close the CyrusOne acquisition and to pay related fees and expenses. The repayment of the term loan B facility through the senior unsecured note offering in the latter half of 2010 eliminated potential refinancing risk in 2014, when the term loan facility would have matured under certain circumstances. In any event, the notes mature in 2020, whereas the expected maturity of the Term Loan B would have been in 2017.

Me, disabled? No chance in ****?

But the chance of becoming disabled is higher than you probably think. According to the Council for Disability Awareness who says that you can ignore the problem, but it's hard to ignore the facts:

1. Almost one-third of Americans entering the work force today (3 in 10) will become disabled before they retire.

2. Freak accidents are NOT usually the culprit. Back injuries, cancer, heart disease and other illnesses cause the majority of long-term absences.

As I said many times before in my blogs and in my books, “Insurance is not an investment. It is protection against loss! That is loss of pay, loss of property, and loss of body parts.”

Are you prepared if it happens to you?

Probably not according to the Council for Disability Awareness. If you're like most Americans, you don't have disability insurance. Or you may not have enough emergency savings to last 2½ years. Yes, that’s the duration of the average long-term disability. Instead you probably have a large life insurance policy that will not help you if you become disabled.

Know your disability risk before you take it!

Most working Americans estimate that their own chances of experiencing a long term disability are substantially lower than the average worker’s. 64% of wage earners believe they have a 2% or less chance of being disabled for 3 months or more during their working career. The actual odds for a worker entering the workforce today are about 30%.

A. According to CDA’s 2010 Long-Term Disability Claims Review, the following are the leading causes of new disability claims in 2009:

o Musculoskeletal/connective tissue disorders caused 26.2% of new claims.

o Nervous System-Related disorders caused 13.7% of new claims.

o Cardiovascular/circulatory disorders caused 13.1% of new claims.

o Cancer was the 4th leading cause of new disability claims at 8.4%.

B. Cardiovascular/circulatory claims increased slightly in 2009 after three years of decline.

C. Accident-related claims dropped rather significantly as a cause of new disability claims from 10.7% in 2008 to 8.8% in 2009. This may be related to lifestyle changes, possibly driven by the economy.

D. Approximately 90% of disabilities are caused by illnesses rather than accidents.

In June of 2010, there were nearly 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits. Over 51 million Americans - 18% of the population - classify themselves as fully or partially disabled. 8 million disabled wage earners, over 5% of U.S. workers, were receiving Social Security Disability (SSDI) benefits at the conclusion of June, 2010.

A sample of factors that increase the risk of disability: Excess body weight, tobacco use, high risk activities or behaviors, chronic conditions such as; diabetes, high blood pressure, back pain, anxiety or depression, frequent alcohol consumption or substance abuse.

A sample of factors that decrease the risk of disability: Maintaining a healthy body weight, no tobacco use, healthy diet and sleep habits, regular exercise, moderate to no alcohol consumption, avoidance of high risk behaviors including substance abuse, maintaining a healthy stress level, and effective treatment of chronic health conditions.

Here is how you figure out the risk that you are taking.

To calculate your own Personal Disability Quotient, go to:

http://www.disabilitycanhappen.org/chances_disability/pdq.asp To learn more about risk factors and ways to help reduce your risk, go to:

http://www.disabilitycanhappen.org/reducing_chances/default.asp

When you take the risk and it does not work out. You take on a severe financial hardship.

1. 90% of wage earners rated their "ability to earn an income" as "valuable" or "very valuable" in helping them achieve long-term financial security — wage earners perceive their ability to earn an income as even more valuable than retirement savings, medical insurance, personal possessions, other forms of savings or their homes.

2. Medical problems contributed to 62% of all personal bankruptcies filed in the U.S. in 2007, a 49.6% increase over results from a similar 2001 study.

3. It is estimated that medical problems contributed to more than 500,000 personal bankruptcy filings in 2007.

4. Personal bankruptcy filings increased 32% from 2008-2009, 31% between 2007- 2008, and 38% from 2006-2007.

5. Medical problems contributed to half of all home foreclosure filings in 2006.

How long could you afford to be without a paycheck?

1. Do you spend more than you earn? 44% of U.S. families do.

2. Do you have private pension coverage? Most of us - over 50% - don't.

3. Retirement savings? One-third of us have none.

4. 60% of adult Americans have NO savings earmarked for emergencies.

5. 71% of Americans would find it very difficult or somewhat difficult to meet their current financial obligations if their next paycheck were delayed for one week.

6. 65% of working Americans say they could not cover normal living expenses even for a year if their employment income was lost; 38% could not pay their bills for more than 3 months.

7. Nearly nine in ten workers (86%) surveyed believe that people should plan in their 20’s or 30’s in case an income limiting disability should occur;

o Only half (50%) of all workers have actually planned for this possibility.

o Fewer than half (46%) have even discussed disability planning.

Relying on SSDI

A. 65% of initial SSDI claim applications were denied in 2009.

B. Can your family live on $1,065 a month? That's the average monthly benefit paid by Social Security Disability Insurance (SSDI) in June of 2010. 8% of SSDI recipients received less than $500 monthly. 52% received less than $1,000 per month. 97% received less than $2,000 per month.

C. The average SSDI monthly benefit payment was $1,190 for males, and $928 for females.

D. Less than 10% of disabling accidents and illnesses are work related. The other 90% are not, meaning Workers’ Compensation doesn’t cover them.

According to the Council for Disability Awareness, disability is already widespread in the U.S. and the risk is growing.

Here's what you can do to reduce your chances of becoming disabled.

Visit the CDA website for more information: http://www.disabilitycanhappen.org/

Darnell Reached a Mile Stone!

Darnell’s IRA Portfolio doubled in two years, two months, and 13 days. He started keeping track of his IRA on January 30, 2009 and it doubled on April 11, 2011. That was an investment time of 802 days giving 102.53 per cent.

“Year to Date” (YTD) Darnell's portfolio is out performing the Dow. This is a surprise to him because he thought that the recovery would have started by now and people would be spending more money causing profits of companies to rise. This in turn would cause demand for common stocks that would cause stock prices to rise. This would cause the Dow to rise. But this is not happening. The unemployment rate has fallen some but the amount of unemployment in the United States is staggering. The amount of unemployment around the world is far worse. Unemployment has caused civil unrest in Europe and governments are threatened in North Africa and the Middle East. The last time this much economic civil unrest occurred is when Hitler and Mussolini came to power causing World War II.

With his yearly contribution, YTD (April 15, 2011), Darnell is up 13.4%. Without his yearly contribution, YTD, April 15, 2011, he is up 6.64%. The Dow is up YTD 5.26%. Many of his bonds that he bought at the time of the Stock Market melt down matured on April 15, 2011. He will have to reinvest his money in bonds giving a lower return. The bonds that he bought in 2008 and 2009 gave a return of 36% per year for 2 to 3 years. The bonds that he bought on April 15, 2011 is giving interest of only 7.9% to 9.5% per year for the next 2 to 7 years.

No matter how you look at Darnell's portfolio, he is still beating the Dow.

Who has been looking at Darnell's blog in the past 30 days (from the most to the least);

1. United States

2. Russia

3. Slovenia

4. Canada

5. Germany

6. France

7. Hungary

8. Iran

9. United Arab Emirates

10. Brazil