Finding your creditors’ mistakes and deficiencies is the key to settling your debt for pennies on the dollar, or even getting your debts wiped clean entirely. Once you get into debt, your creditors are part of a whole industry designed to keep you there so that they can extract as much money from you as they can for as long as possible. But they have to be perfect. Because if they make a mistake—and they make them more often than not—you can turn those errors to your advantage.
Americans have over $13 trillion in debt, and 77 million Americans have debt in collections. That’s a lot of paperwork. Sometimes documents go missing, especially when lenders sell their loans to debt buyers. Sometimes creditors sign off on deals without actually reading them, or employ robo-signers to blindly sign off on critical documents, making the signatures legally suspect. Sometimes they input information incorrectly or fail to input it at all. Finding these mistakes can give you a major edge in a negotiation or court battle, and could force your creditors to settle your debt for less or forgive it altogether.
It’s the cornerstone of the DebtCleanse system for a reason—because it works.
Take a look at some startling figures:
- In a sample of 6,100 mortgage documents in one North Carolina County, 74% had questionable signatures.
- A county in Massachusetts found over 25,000 mortgage documents with suspect signatures dating back to 1998.
- An Illinois county pulled a sample of 60 documents and found all 60 had been robo-signed.
- A civil court judge in Brooklyn, NY who saw over 100 credit card lawsuits every day said, “I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt.”
- In 2014 more than 93% of credit card lawsuits went unchallenged by debtors.
(Click here for more stunning facts about debt in America.)
The numbers speak for themselves. There are errors all over the place, but most people simply don’t know about them so they get overlooked. The only way to turn those errors into relief from your debt is to find them and put them to use.
Lenders, buyers, and sellers
Your debts rarely stay with the originating lender. Debt has become a commodity to be traded. Lenders bundle debts into portfolios and sell them to buyers who then package them with other debts and sell them again. This may happen three or four times, and if your debt ended up with a collection agency, that just means it’s been sold again.
Every time a debt is sold, all the accompanying documents are supposed to go with it, but that’s rarely the way it works. Things get lost or bungled along the way. In fact, a Federal Trade Commission study found, “For most portfolios, buyers did not receive any documents at the time of purchase.” Even when they did receive at least some documentation, most of the time the sellers—e.g., your original lender—gave no guarantees that the documents were accurate.
“Debt collection lawsuits are a pure volume business,” said Tom Pahl, assistant director for the FTC’s division of financial practices. “The documentation is very bare bones.”
It’s like a game of telephone. Your originating lender started with the entire message. Then it got passed along and passed along, getting more garbled each time, until by the end of the line it’s just gibberish.
If you still think that these mistakes are rare, think about this: companies buying and selling debts without knowing what was in them was the root of the 2008 subprime mortgage crisis. This isn’t something that only happens once in a blue moon. It’s something that’s so common that it brought the entire US economy to the brink of ruin.
You’re more powerful than you think
Knowing that your creditors make mistakes is one thing. Actually finding those mistakes and getting that debt relief is another. Whether you’re dealing with a neighborhood payday loan business or a multinational bank, you might be thinking the same thing: They have all the power. They wouldn’t be this big if they didn’t know what they were doing. I’m not a legal expert. How am I supposed to catch their mistakes?
That’s exactly what they want you to think. But you have more power than you might realize. You don’t need to be a financial expert to catch some of the most common errors:
- The original promissory note or similar evidence of the debt is missing.
- The promissory note or security agreement is missing a signature from you or a guarantor.
- The date of the notary acknowledgment doesn’t match the date of the signing.
- The notary didn’t actually witness the signing.
- Payments on the loan were not properly credited, i.e., you’ve paid off more than they say.
Don’t want to go it alone? DebtCleanse Premium members get a complimentary consultation and documentation review every month with an attorney who has been specially trained in finding these deficiencies and well over 100 others. Identifying creditor mistakes immediately gives you a stronger bargaining position to pay off your debt for a fraction of its face value.
According to the FTC, debt buyers pay an average of only 4 cents for every dollar of debt face value. So if you have a $10,000 debt, they might have paid only $400 for it. If you can find an error that jeopardizes their claim to ownership of the loan and put them in a position where they have to decide between either accepting $800—doubling their investment—or possibly losing out on the entire $10,000, which do you think they would choose?
Debt relief with proven results
DebtCleanse founder and CEO Jorge Newbery knows just how effective these techniques are, because he used them himself. By finding a deficiency in his creditors’ paperwork, Jorge was able to get a $5.8 million debt completely wiped clean in a unanimous judgment by the Missouri Court of Appeals. He ultimately cleared $26 million of debt, and used the strategies he discovered to create a debt plan for people who can't pay.
Click here to download the Debt Cleanse Quick Start Guide which includes:
- 134 most common creditor mistakes and deficiencies.
- 140 document requests
- 208 interrogatories to make your creditors prove they hold your debt
- 156 requests for admissions
- 24 letters to shut down creditors
Join our waitlist now to get notified the moment DebtCleanse goes live.