THE POOR MAN’S BANKRUPTCY WITHOUT COURT

EDITOR’S COMMENT: This strategy has been used for the last 30 years that I know of. I am constrained to say that what they are doing exposes them to some risk. On the other hand, there are many ways of not giving up and at the same time not paying. I make no suggestion that this is the way to go. But I present it here without editing as an alternative view.

We stopped paying on our credit cards some 1 year ago. We don’t answer the phone, we ignore all collection letters, we do not send a debt verification letter, we do nothing. We are all cash and it is great, we bank at a local credit union, we keep cash saved elsewhere. Our credit score is 525 but who cares. Banks and CC companies are a business, traded on the stock exchange, so we have been ousted from obtaining credit from them, doing business with them – good, that’s how we want it. Collection companies who buy bad debt buy bad debt, then they try to get you to pay for their purchase, funny when you think about it, nice game but we don’t play along. We attempted a loan mod but the servicing rights was sold to another right in the middle of it. We stopped paying the mortgage to obtain a loan mod. I have now sent a written request letter for a copy of their PSA and original loan docs, They wrote back and said they will investigate and report findings in 60 days. We will then send another letter written request to ask for copy of the original assumption agreement. We can file bankruptcy at anytime, we can pursue quiet title. That’s my story. If everybody did this they would fall. If you ask me the You Walk Away movement was started by the banks, it is not what you need to do. Stay put and fight it out, even if you have to do it alone cuz you can’t afford a lawyer, what have you got to loose if you are in a similar situation to me. Go to a court house and watch what happens, get familar with the courts, the people – you won’t be so nervous or unsure if you have to go to court. My wife and I have realized that no matter what happens at this point or future point in time, we will have won. We have started a new life and it is fun again. Our hope is our scene will drag on and we can save enough money and/or with help from friends just buy a house cash in a few years – no mortgage, no CC cards, no debt. That’s it for their debt slavery game for us. I believe one needs to be Fabian in the mortgage arena, look up Fabian in the dictionary. What if they had a war and no one showed up, what if they issued debt and nobody took it?

23 Responses

  1. Hey Mike H, Committing bankruptcy fraud is too scary for me!

  2. Okay, here’s the deal. Countrywide pulled the old apply to our work-out department to see if we can help you out (help me out of my home) is what they really meant.

    Anyhow, 5 months later I hadn’t even spoken with a living person in CW’s work out division so I filed Chapter 7 BK to stop the foreclosure that was begun by CW while I was suppose to be getting some form of a work-out.

    I filed my own BK (who could afford an attorney) and I made a few mistakes along the way but nothing so major that the proceedings didn’t continue on.

    CW filed its motion for relief from automatic stay and I filed a response from which the Judge determined there was good reason to hold another hearing in 30 days or less according to the BK rules.

    CW withdrew its motion a couple days before the hearing and I never heard from them again. I filed for BK protection March 15, 2007 and received my discharge on June 27, 2007.

    Along comes BAC and buys CW in July of 2008 and in July of 2009 BAC files a motion for relief from automatic stay and come to find out the BK Trustee never finalized the BK report the case wasn’t closed out. Anyhow, the Judge grants BAC’s motion (because by now the BK Judges have had their hands tied by the politicians in Washington) but after he grants the motion he turns to me and says, “My granting of this motion in no way impinges on your rights to pursue civil remedies in the state courts or for that matter in the federal courts.” The Judge could see the wrong of it all right from the beginning and that was back in early 2007.

    Sorry this is so long. Here is the interesting part of it,

    I claimed my Colorado Homestead exemption in my BK petition and nobody objected to it, least of all CW or BAC. This is one of those mistakes I mentioned, I claimed $200,000 as the exemption and I claimed $200,000 as the value of the property.

    Every major US Court decision I can find says that once discharged, without objection, the exemption stands even if it was for that to which the petitioner didn’t really have a right to claim.

    I have a civil case in the federal courts, 8 count complaint, against BAC as successor in interest to CW in the pre-trail (flurry of motions stage) rights and BAC is claiming I waived any homestead exemption I might have had in the DEED of Trust.

    I’m about to hit them with the fact that once discharged wihtout objection any and all exemptions claimed in my BK petition become mine and cannot be defeated by any pre-BK contracts or argument. BAC missed its opportunity to object and it had 16 months to do so after it bought out CW.

    Any comments or suggestions as to how best to use this to my benefit would be appreciated, I’m pro se in the civil case as well and fighting a pre-answer motion to dismiss by BAC.

    50 MONTHS AND HOLDING.

  3. Dear John,
    It’s true you can’t get a d/c on the ch13 shortly
    after doing the Ch 7 and getting a d/c but you can
    get a stay and get time to put your finances in order.
    You say a ch7 can’t be done my way. I guess I
    didn’t know that and just got 5 done without knowing
    what I was doing! It’s amazing what you can do when you didn’t realize you can’t do it. I’m sure the
    Wright bros. were amazed to be flying when everyone said it can’t be done. They just did it!
    It’s called a Ch 20 my man. Read Nolo Press.

  4. 3rdborn, I meant Fabian regards mortgages not CC debt. I am at peace having learned what money really is, I’m 50 and just found out a year ago and have been reading up on it a lot. As Glenn Beck would say – blood is streaming out of my eyes when you find the truth, see webofdebt, money as debt videos, zeitgiest sp?, creature from jekyll island, etc and Federal Reserve own publication Modern Money Mechanics http://www.reallyneatstuffalaska.com/modern_money_mechanics
    Probably one is 100,000 people known what fractional reserve banking means. Banks are no longer banks these days, they are brokers, every loan is turned into ABS and MBS. Even Michael Dell buys MBS’s. The rich get richer. Well if my credit card debt is turned into a security and sold to some “choice word” in England, China, Japan and they are making money off my payments, well nobody told me about it, I thought I was dealing with BofA, Wells Fargo, etc, they were my bank for 15 years, my friends….not so….some schumk I do not know is receiving the benefits of my paying the credit card, car loan, mortgage…nobody told me…..what if I do not want to deal with some yahoo in China, I want the money I pay back to stay here in the USA…..but no, we don’t know who actually owns the debt…it could have been sold ten times back and forth….now somebody in Japan owns it….all debt is monetizied=money. Most people think banks lend out depositor money, not true…..
    60 minutes last night going over states being massively in debt….I’ll bet the Governors do not know how money is created. How come the media doesn’t talk about North Dakota, they have a state bank that lends money and the interest goes back to the state to fund their state government, roads, etc and not to Wall Street. Why don’t other states just duplicate what they do? Why don’t we all move to North Dakota and the 49 other states can play their rip off wall street/banking/speculator game among themselves.

  5. Most people don’t know that after your credit score in zip, then you can negotiate your debt down. You offer them about 20% of the total at the start of your negotiation and go from there. Make sure you get a signed, dated document from them absolving you of the credit card debt.

    On the other hand, Your score is already ruined, what can they do? They can bring a lawsuit against you in the form of a judgment, but you can file Chapter 7 or 13 and get rid of that. There is hope out there. If you think about it, charging people 25% or 30% interest is usury. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  6. HELP

  7. Hey Mike….I don’t understand your question.

  8. Mike H….Your thinking is flawed because you cannot file a 13 after a 7 for 6 yrs and all debt must be included in your 7 filing….you can not pick and choose. Stay current on your mortgage and discharge unsecured debt in your 7 then do not reaffirm mortgage and walk away.

  9. My strategy is to get rid of the biggest debt in Ch 7
    first and possibly save the home at the same time if
    the homestead exemption is big enough.(post Jud.)
    Next we do a Ch 13 and spread out the small debts over 3 years ( I try to set up a 50% plan).
    No discharge is possible under this set up for the
    small debts since you already got a discharge for
    big debt. However, I think this will result in less
    damage to a person’s credit long term.
    When I see attorney’s lump everything big and small into a ch7, my view is that this is malpractice
    and an abuse of the system. It will hurt the debtor
    for a long time and make his/her reputation as good
    as mud (if not endangering life or limb!) Some attorneys have no common sense whatever!

  10. Unless I missed a point, I think the correlation in this to Fabian is incorrect and is actually what we are fighting against. Yet–BEST TO YOU. Many are HAVING to do much the same thing, but not consciously, and not with the peace you seem to have.

  11. It takes both you and the credit card (bank) to “participate” in the fleecing of YOU. You have to allow them to do it by participating in their scheme. So I TOTALLY agree…kick them to the curb. We do not have to participate in their lousy system, where we are always the victims. Don’t pay them, or pay them the reduced amount, and NEVER do business with them again! You are right, if we refuse to do business with them, then where will they get their money????? I REFUSE do participate in any of it.

  12. I would also like to comment that by using your CC, you are creating money thereby adding more money thereby diluting the total money supply out there thereby creating your own inflation, collectively everybody using their CC’s is doing that, but you are not creating the interest part so that part even dilutes the money supply more – if you do not pay off the balance. If you pay off balance every month, then you are not adding to the system. The trick on consumers is to get people to use their credit on consumables, stuff, and hope they carry a balance. The way to beat the system is to use your credit to make money within the 30 day time period of no interest.

  13. Wow, had no idea I’d make headline with my comment. I went to a credit union because it’s local and I do not want to contribute to banks CEO high pay. Since learning that CC’s are also sold and packaged as ABS, asset backed securities, and then the CC companies raised my interest rates to 30% while I was on time and never missed a payment, and my income varies month to month and realizing I was paying the debt first and realizing and learning what really is money and the CC’s have insurance as well for deflaut, I said that’s it, I’m paying myself first and I’m not paying your 30% interest rate. To top it off, I added up all the money I payed and all the amount I charged and it was about even, even thou I still had a huge balance – that’s their compound interest. So I said that’s it – no more payments to CC’s, we are about even and I don’t call if you call it interest, principle, dog poop, whatever, we are even and you didn’t make any money off me, TS. I tried my damnest to make it go right, just was dragging on and on. So I could either officially file bankruptcy or unofficially. I choose the later with the option of filing bankruptcy if somebody got nasty. One year later and nothing happens – so far it’s smoke and mirrors with little men behind the curtain shouting you must pay. Everyone of those CC’s finally offered a huge reduction in balance before their 6 month write-off period, so much for their credit money worth – it’s thin air. Well, they should have offered such when I called them and said I’m not able to continue with payments, can you help. Who was that said if you owe the banks several thousand you are in trouble but if you owe the banks a million dollars the banks are in trouble. Well, if you ask me, if you owe the banks any amount of money, they are in trouble so you had better be good to me if you want ME to pay it back, not the other way around cuz I don’t care about your FICO game. Jeepers, can you believe I get CC offers in the mail everymonth or so and yet my credit score is the pits. They just want another account to package again into another ABS security. Stop using your credit cards, pay them off if you are in a good position with assets, I have none. Don’t use those damn things no matter what. I remember when CC first hit the scene and my dad got an offer, he says to me – what is this credit card crap, I pay cash to pay my bills. And Dad was proud of it, jeepers he was right all along. The banks certainly turned the game upside down.

  14. Are credit unions safe from default judgments?

  15. The debt slavery game we played it I played it. I dud it this way. Whilst waiting in the illusive loan mod I used my mortgage payment I could afford and settled my cc debt myself you do not need a debt managment company nor a bk trustee for that however I loved my home and I went into bk court for. The protection when loan mod dud not happen and it bought time for me to get my adversary proceeding going then I voluntarily came out of that court. The bsk was unsucessful a motion to lift stay I fought it and judge curly was clued in but the moment I came out from the protection if bk court
    which I dud cuz the payments were si high I could not afford a trial attorney if I stayed in bk court so I made a choice and then they sold the house just like that! Under power if sale so now I’m trying to get it back and so you fight them the banks and this crazy slavery. Like the author I care not to be enslaved by debt a darn divo score I’ll do without cc I don’t want one because I hate what the banks have done I loathe what has been done to the people so I’ll live without that credit crap trap. It’s such a relief to not give a tiny fart anymore about that fico score thst I had watched si so carefully up untill the housing fraud. That’s how I feel and yes credit union where the shareholders are it’s community

  16. I agree with a significant amount of what E. Tolle is writing and quoting. I’m torn on not repaying debt.

    I believe debt paid back at near zero interest rates may be the ideal scenario. But since the Barack Obama administration continues to lag over such an obvious solution, and stalls over what I see as an obvious friendly spark over fixing what is wrong, credit card debt reduction incentives based on low interest rates, other options will have to be explored otherwise the banksters just won’t, change.

    There is a reason that Barack Obama was supported over Hillary Clinton, and we are seeing it play out on Wall Street on a daily basis.

    Let us not forget that Barack Obama had less campaign finance accountability than either Hillary Clinton or John McCain. Barack Obama’s campaign accepted pre-paid credit card payments that were given by anonymous donors.

    So pre-paid credit card donations could have come FROM ANYONE with no limits as to how many below the legal amount donations they wanted to send.

  17. Legal counsel help you at the time of bankruptcy but the procedure for the poor man can be tough. I like your overall topic for the the part of the society.

  18. The Obama administration was catapulted into existence on the premise of hope and change. Now, after two years, all that we can hope for is change. What a failure this entire group has been. Bankers run the administration, write policy, direct the congress members where to sign….it’s out-o-control. The revolving door spins.

    The goal as promised, after bailing out the banks, was to return our economy to capital formation for small and medium sized businesses, and to regain the standard of living back to reasonable levels for the population as a whole. Employment would increase as a natural result. Everything would be hunky-dorey.

    Instead, what we’ve been handed are bills claiming that we, the world, owe such fantastic amounts of money, with wild interest to rentiers who hide behind the artifices of well known ivory towered financial institutions, that have somehow managed to maintain a level of respect, even though just under that thin veneer they can easily be seen as nothing more than grifters swindling at every opportunity. Cheap ass swindlers. Con artists. Low life crooks. Only they wear $1000 suits, and have friends in high places. Same old confidence tricks. Wall Street’s exotic derivatives might as well be a skilled carnie’s “pick a card” game offering, for all they’re actually worth.

    And we continue to allow them to exist by parking monies in their ivory towers, by allowing our retirement accounts, our pensions, or what have you to deal with these mercenaries.

    From: http://michael-hudson.com/2010/12/financial-interests-dictate-sovereign-policy/

    Real experts would follow the advice that John Maynard Keynes gave in the 1920s regarding German reparations and Inter-Ally debts. It is better to wipe out bad debts than to try to pay creditors at the cost of reducing capital formation, living standards and public spending on education, health care and other basic infrastructure. A wise government would subordinate the financial sector to promote economic growth, capital formation and rising living standards.

    How much longer will we let them rule? Instead of realizing that we’ve been taken, and that we are no longer going to buy the talcum powder sold to us as pure heroin, when do we fight back?

    We cannot possibly return to a positive growth scenario while these vampires exist. They….Goldman Sacs, JP Morgan Chase, Bank of America, Wells Fargo, Citi, for starters, have to be removed. They have 40% of our GDP and provide nothing for us whatsoever, save for continuing our state of misery.

    I’d love to have anyone from any of these institutions come on this board and explain why they are worthy, why we shouldn’t take them down like enemies of the state. Like the low life scum they’ve proven themselves to be. Prove your worth.

  19. Oops, meant to write “lawyer”.

  20. Begin quote…”Go to a court house and watch what happens, get familar with the courts, the people – you won’t be so nervous or unsure if you have to go to court”…. End Quote.

    Excellent advice. Also, a competent paralegal who doesn’t charge a lot might be helpful versus not hiring anyone.

    Just make sure the paralegal (if you can’t afford a lawywer) are reasonably busy. Not too busy, but also, busy enough so they have a routine down and it becomes evident they have the basics down when it comes to filing motions and responding to motions and such.

  21. I am right there with you in AZ ! We may bump into each other at court 🙂 Power to the people!

    President Jefferson said it best:

    “If a nation expects to be ignorant and free, it expects what never was and never will be.”

    “If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

    “I believe that banking institutions are more dangerous to our liberties than standing armies.”

    “I wish it were possible to obtain a single amendment to our constitution – taking from the federal government their power of borrowing.”

  22. Way to go! You’re right. If everyone would just stand up for themselves a bit, it would be a whole different ball game out there.
    Jamb up the courts! You can go one further by filing a suit on THEM! (Really not too hard to do, and you don’t have to pay the fee if you fill out papers showing you can’t afford to.)
    Whether it is a credit card or a mortgage. They’ve done the same rotten thing to you. They don’t own the debt. Neither do these attorneys that are buying evidence of debt. It proves nothing with a fake, robo-signed affidavit, but they try to use that in court against you. (Some do, but most just go away if you even write back and say you dispute the debt–Please send me the paperwork to verify that I owe it, had a contract with you, and that the amount is correct–which they don’t have.)
    I don’t know of a statute in Arizona, If anyone else does, please send it, but in Oklahoma is it illegal for these attorneys and collection companies to buy evidence of debt and then try to collect it.

  23. You are not alone.

Leave a Reply

%d bloggers like this: