Jorge Newbery erased his debts without filing bankruptcy. Now you can, too. Like many Americans, Newbery struggled with debt. But unlike most people, he owed more than $26 million.
Creditors swarmed after a natural disaster devastated his multi-million dollar business. The stress was crushing. He needed a way out — and what he discovered will amaze you.
His breakthrough came practically by accident. One of his creditors made a sloppy legal mistake, and he battled the creditor all the way to the Missouri Court of Appeals. The court ruled that the entire debt — nearly $6 million — was "inadvertently extinguished.” It didn't have to be paid. It was completely eliminated.
Newbery applied the powerful techniques he had learned to all his other debts. The results were astonishing. One after another, his debts were either settled or gone forever.
Now, Newbery reveals his proven debt-cleansing methods. In simple, step-by-step instructions, you’ll learn how to…
- Assert your rights and defend yourself against creditors.
- Stop making payments — and turn that to your advantage.
- End harassing collection calls.
- Dispute your debts to stack the odds in your favor.
- Uncover deficiencies that can put money in your pocket.
- Protect your assets from creditors (100% legally).
- Negotiate the best possible settlements.
- Be debt-free for life.
Debt Cleanse shows you how to gain leverage over your creditors. You can settle your unaffordable debts for pennies on the dollar – and not pay some at all. Don't let your debt burden you one more day.
This book will set you free.
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About the Author
As an athlete, Newbery raced bicycles for a living from 1986 - 1990 as a Category 1. He competed in the 1988 Olympic Trials and was 4th in the Spenco 500, a nonstop 500-mile bike race televised on ESPN. He also raced for the Costa Rican National Team in the Tour of Mexico, was 2nd in the 1987 Southern California State Championship Road Race, plus held the Green Jersey in the 1987 Vulcan Tour. Newbery also runs and has completed over 70 marathons and ultramarathons. In 2012, he was the overall winner of the Chicago Lakefront 50K. At 46-years-old, he was double the age of the 24-year-old second-place finisher.
Today, Newbery helps others crushed by unaffordable debts rebuild their lives. Jorge is Founder and CEO of American Homeowner Preservation (AHP), a socially responsible hedge fund which purchases nonperforming mortgages from banks at big discounts, then shares the discounts with families to settle their mortgages at terms many borrowers find "too good to be true." Jorge's response to the nation's mortgage crisis creates meaningful social and financial returns for investors, while keeping families in their homes. AHP's mission is to facilitate win-win-win solutions for homeowners, investors and lenders.
"Burn Zones: Playing Life's Bad Hands" is Jorge's autobiographical account of how he was pushed to his physical and mental limits during his time of strife, and how he overcame the challenges he faced. Jorge's latest book is: "Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All)," which provides step-by-step help for families overwhelmed by debt.
Jorge is a regular contributor to Huffington Post and other publications, and speaks regularly on debt, investing, finance and housing issues.
Connect with Jorge at:
Read an Excerpt
CREDITORS & CHICKENS
"This isn't just a problem for the people caught up in rising debts. It's a potential problem for everyone. An economy built on borrowed money is an economy built on borrowed time."
— GEORGE OSBORNE, BRITISH POLITICIAN
There are 17 billion chickens in the world, 7 billion humans and 1,826 billionaires. The 85 richest people in the world have as much wealth as the poorest 3.5 billion people. 400 American billionaires have as much wealth as the entire African American population of the United States, 41 Million people. The average net worth of America's 400 richest rose by $800 million in 2013, while the median net worth of African American families sunk to $4,955, poorer than the average household in India. At the same time, the median net worth for single African American women dropped to $5, less than the cost of a Big Mac with a small order of fries. Half the collective wealth of African American families was stripped away during the Great Recession. Where did all this money go? To the elite. Since 2009, 95% of U.S. economic gains have gone to the richest 1%, who control more wealth than the bottom 99%. We need to stop being chickens.
What do I mean by that? Chickens allow humans to take all of their lifelong output, their eggs, and eventually their bodies for meat. Humans are the chickens' creditors: we give them food and a place to stay and, in return, they give us eggs and McNuggets. Chickens outnumber humans more than 2 to 1, so they could turn on us, but they are comfortable enough that they don't. Similarly, Americans labor a lifetime and the bulk of our output goes to creditors. The majority of Americans are simply McNuggets for the elite. We outnumber the elite 99 to 1 and we could turn on them, but we are typically comfortable enough that we don't.
"Those in debt are slaves," said Andrew Jackson, the seventh president of the United States. Debt and slavery have been intertwined since before currency existed. In ancient Rome, those in need of goods or services would agree to Nexum, a debt bondage contract in which a free man pledged himself as a bond slave as collateral for a loan. If additional collateral was needed, a son was often pledged. Rome's elite discovered that they could profit more from a motivated contract worker than a slave, as an indebted worker will toil away inspired by dreams of a better life.
America, the purported "land of opportunity," is a country of optimists. We often anticipate that a raise or job is just around the corner, or we will meet a wealthy Mr. or Ms. Right, that Mark Cuban will fund our great business idea on the next season of Shark Tank, or our teenager will win American Idol, or get a fat pro sports contract. The reality is that something bad happens just as often as something good happens. We are just as likely to move further away from what we want as we are to move toward it.
Nevertheless, spurred by the prosperous futures we envision, millions of Americans are taught from an early age to aspire to pledge big chunks of their income to creditors. Buying the most house we can by committing a third of our income for the majority of our working years is considered wise. Taking out huge student loans to go to college may make us the pride of the family, yet they often mire us in lifetimes of debt. We freely use credit cards; yet if we are over the age of 43 and live the average American lifespan of 78 years, just paying the minimum payment on $5,000 at 18.9% will not pay off the cards in our lifetimes. How about allocating 34% of our income to a mortgage, 14% to credit cards, 11% to vehicle loans, and 7% to student loan debt? These are common percentages and, when combined with the typical 23% subtracted from paychecks for taxes and other deductions, result in 89% of many Americans' paychecks being pledged to the elite in the form of debts and taxes. The other 11% goes to pay for food and necessities to actually live on. If we have an unexpected expense, maybe a medical emergency or a car repair, then we join the 43% of Americans whose income is less than expenses, an unsustainable situation. Bawk-bawk! The majority of us truly are chickens for the elite.
Creditors are not our friends. Families challenged by debt are often counseled to contact their creditors and explain the situation. Most creditors then go through a tedious and time-consuming review process in which they determine the most that they can squeeze out of you and still keep you motivated and paying. If you are overwhelmed with an impossible payment, then you lose motivation. However, if your lender gives you a payment that you can just barely afford, then they will take advantage of every penny they can get from your income and leave you with just enough to survive.
Lenders fantasize that you can get Netflix instead of cable, access the Internet at the local library instead of at home, eat all your meals off the dollar menus at McDonalds and Taco Bell instead of Panera and Chipotle, use Cricket instead of Verizon, walk instead of drive, and go to Wal-Mart instead of Whole Foods. Depending on your lifestyle, some of these choices may be wise (and the $1 Triple Layer Nachos at Taco Bell may be tasty) but you should not be forced into these choices as your lenders guzzle up ungodly chunks of your income. You are the one earning your living and you should have the freedom to decide how to use it best for you and your family.
BREAK UP YOUR BAD DEBT RELATIONSHIP
Debt Cleanse is not an overthrow of the 1%, but rather a disruption to improve the lives of the 99%. Think of Debt Cleansing like breaking up a bad relationship, getting away from an abusive mate who may be tough to shake. Breaking up with a creditor does not demand the usual awkward in-person "I quit you" along with some explanation as to why. Instead, you can take the easy way out with your creditors. Just stop taking their calls and install a free app on your mobile phone to block their numbers. When they send you letters, dispute the debts. "Ours wasn't that kind of relationship. I don't know what this fool is talking about," is the essence of your retort.
Tuck away all the correspondence that goes back and forth as you would love letters. They'll try to tempt you back, but stand your ground. You don't need all that emotional push and pull. Make a clean cut and be determined to look forward, not backward. When you are having a weak moment, call another friend to chat: no hooking up with debt for clandestine trysts, like one last credit card purchase. Your relationship with debt is over and done. There are better relationships out there for you.
Chances are you were playing the field, so you have several creditors and not just one. Hey — no judging here. We're cool. The breakup process works the same way no matter how many debts you have. Most creditors will get the message, write the debt off, and move on. Their recourse will be to give you a bad grade and mess up your credit score.
We're so over credit scores — we need to make low scores cool. Some people put credit scores in their dating profiles, like on match.com. That is, if they have a high one. That so screams to the world: "I'm a conformist, I bow to The Man." Let's usher in a new era in which a low credit score is sexy. That bad mark on your credit report may prevent you from getting into new relationships with other creditors, but that is what you want: no more creditors in your life, ever. So, welcome the bad marks and plunging credit score as they put you in vogue.
Some creditors just can't move on. Some may get desperate, saying they can't live without you. At this point, they may take matters to an extreme, like getting an attorney to try to get back at you. If that's the case, you have to bring out all the dirt you have on the creditor. They should have stayed quiet. You were ready to move on. So, put together whatever documents you have from when you first met plus all those love letters you've been stashing, and the lawsuit they served.
Then, ask your creditors for their records, some proof of your relationship. If you had a handful of relationships, or even dozens, chances are your creditors had thousands or even millions. "But you were special ..." they might say. "Prove it, show me evidence, show me where I signed on the dotted line," you will respond. "Give me a reconciliation of all our time together. Prove I meant something." I am sorry to break this to you, but you were just another number. They didn't care enough about you to even keep the records straight.
I'll teach you to find your creditors' weaknesses and exploit them. I'll show you how to dish it right back at them. You will get a jab in for every time they disappointed you, threatened you mercilessly when you were late, and made staying together so unbearable that you didn't have time for your family, your friends, and even yourself. For every moment of worry, every sleepless night, every speck of enamel grinded off your teeth, every watt of energy wasted by stress over losing your home, your car, even your life: Now is your time to stop being a chicken. Now is your time to Debt Cleanse.CHAPTER 2
Over $12 trillion in consumer debt is originated each year. Of this, $317 billion goes unpaid and is charged off, meaning that the creditor gives up on collecting, writes off the debt, and typically assigns it to a collection agency or sells to a debt buyer. Many other debts go delinquent, but debtors struggle to make some payments and keep the debt from being charged off. The reality is that these debtors would better their situations by not paying anything and letting the creditors charge off their debts.
The charged-off debts are concentrated in five asset classes: auto ($8.5 billion), healthcare ($11.6 billion), credit card ($21 billion), mortgage ($30 billion) and student loans ($143 billion). $150 billion to $200 billion of these charge-offs end up in the hands of collectors, which typically recover between 20% and 25% of what is due. You want your debts to be in the 75% to 80% that are never collected.
Before we get started, let's get warmed up with some preparatory steps:
STEP ONE: LEARN KEY TERMS
The first set of terms you need to know are the four primary players in Debt Cleanse:
Debtor: You, the one who owes the money.
Creditor: The entity to whom you owe money. Also known as the Lender.
Debt Buyer: The entity that will hopefully buy your delinquent debt at a big discount from your Creditor.
Debt Collector: The entity that the Creditor or Debt Buyer may contract with to collect the debt from you. Sometimes, Debt Collectors receive a contingency fee, earning a percentage of what is recovered. May also be known as a Loan Servicer or Collection Agency.
You also need to be aware of the FDCPA:
Fair Debt Collection Practices Act: a consumer protection amendment to the Consumer Credit Protection Act, which establishes legal protection from abusive debt collection practices. The Act also provides consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy.
The terms Creditor, Debt Buyer, and Debt Collector are often used interchangeably and can also be simply known as Debt Holder. There is no need to get too caught up in the differences. However, the FDCPA generally only applies to Debt Buyers and Debt Collectors, as opposed to what the FDCPA identifies as Creditors, which are the entities that originally provided the financing (sometimes referred to Originators, a term which also includes third-party brokers or dealers which work with borrowers to complete financing-transactions).
For example, I once had a Southwest Airlines Rapid Rewards credit card issued by Chase Bank. Chase was the Creditor and was not bound by FDCPA. In 2006, when I stopped paying the credit card, Chase assigned the debt to a collection agency, which was bound by FDCPA. The debt was later sold several times to different debt buyers, all of which were bound by FDCPA. It's now 2015 and I never paid anything on the debt.
That said, many Creditors abide by the FDCPA as this is considered a prudent practice to limit litigation from consumers. Additionally, many states have enacted consumer protection laws that may overlap and be even more stringent than FDCPA. These often govern Creditors in addition to Debt Buyers and Debt Collectors. When you gather information and documentation using the strategies in this book, your attorney (should you end up in a lawsuit) can review your records for FDCPA violations and other deficiencies that might create leverage in negotiating a settlement.
In addition to the four players and the FDCPA, there a few other key terms you need to know as you make your way through Debt Cleanse:
Deficiencies: These are errors made by Creditors, Debt Buyers, and Debt Collectors. These can include faulty and missing documentation, incomplete and lost records, defective and inaccurate legal pleadings, improper and illegal collection efforts (including FDCPA violations), and many other boo-boos. Deficiencies are common amongst all types of debt.
Discount: The difference between the amount you owe and the amount your Creditor sells to a Debt Buyer for; and from debt buyer to debt buyer, and so on.
Time: This is always the debtor's friend and creditor's enemy. In almost all situations, delaying debt resolutions will benefit debtors.
Here are some document-specific terms:
Allonge: An attachment to a Promissory Note, which transfers, or purports to transfer, ownership of the Note. This can also be accomplished by an Endorsement directly on the Note, similar to signing over a check. For instance, an Allonge or Endorsement or similar document transferred my unpaid credit card obligation from Chase to a debt buyer.
Assignment: Document that transfers ownership, often of a Security Instrument or other evidence of a debt.
Note: The document in which one party promises to pay another party on terms on specific terms. Also known as Promissory Note.
Security Instrument: Document that evidences the pledging of an asset as security for a loan. This includes a Mortgage and Deed of Trust.
STEP TWO: REGISTER & CREATE DEBT HIT LIST AT DEBTCLEANSE.COM
Register at debtcleanse.com to access many free tools to streamline your Debt Cleanse, including creating a Debt Hit List. If getting online is a challenge, then use the manual list below.
A Debt Hit List is an inventory of every debt you have. Confessing every debt problem may be nerve-wracking. Go ahead, though, and pull out all your statements, or go online, to get the exact balances. Don't worry about writing down the monthly payment amounts — you aren't going to be paying any of these. You can also get details on your debts by obtaining free copies of your credit reports at annualcreditreport.com. For "type", insert "mortgage", "auto loan", or other descriptor.
Your Debt Hit List needs to be a complete inventory, so do not leave anything out, no matter how small or seemingly insignificant, such as the "four easy payments" for that dull knife set you bought off TV.
There, all your debts are contained in one place. Expect that some of your debts will be sold or assigned to collection agencies, so plan to update debt contact names as needed. There may be multiple transfers, which is good. Presumably, every time your debts are sold, they are sold for smaller and smaller amounts. Time is on your side. Over time, as you knock off your debts, whether you settle or they die, cross them off your Debt Hit List.
STEP THREE: ASSET PROTECTION
Asset protection is ideally done before you start to Debt Cleanse. The goal is to get assets out of your name. For instance, my name is Jorge Newbery and I do not want anything in my name: real estate, vehicles, bank accounts, ownership in a company, beneficial interests in a trust or estate, jewelry, furniture — nothing. Think of Asset Protection like going through TSA at the airport. If you have water, drink it up. If you have a pocketknife, mail it to a family member. Whatever you hang on to, you will likely have to give up to the TSA screeners.
50% of Americans have no net worth — that is, the value of whatever assets they own equals (or is less than) whatever they owe. In fact, 25% of Americans have a negative net worth, owing more than the value of what they own. Thus, for at least half of the readers of this book, there are really no substantial assets to protect. This is good — great, even — as this will make your Debt Cleanse easier.
What we are trying to avoid is leaving any asset vulnerable to seizure by a creditor who is able to obtain a judgment. As you go through the book, I will teach you how to avoid getting a judgment. However, these judgment-prevention strategies do not work 100% of the time. So, just in case, I also teach you how to thwart collection of a judgment. This is much easier if you have no assets in your name.(Continues…)
Excerpted from "Debt Cleanse"
Copyright © 2016 Community Books LLC.
Excerpted by permission of Community Books LL.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of ContentsPROLOGUE
1. CREDITORS & CHICKENS
3. QUICK START
6. VEHICLE LOANS
7. STUDENT LOANS
8. BUSINESS LOANS
9. SECURED PERSONAL LOANS
10. CREDIT CARDS & UNSECURED PERSONAL LOANS
11. MEDICAL BILLS
12. PAYDAY LOANS
13. COLLECTION ACCOUNTS
14. AFTERMATH: LIVING DEBT-FREE
15. ACTION TOOLS
A. 136 DEFICIENCIES TO EXPLOIT
B. 140 DOCUMENT REQUESTS
C. 208 INTERROGATORIES
D. 156 REQUESTS FOR ADMISSION
E. 252 DEPOSITION QUESTIONS
F. 24 LETTERS TO SHUT DOWN YOUR CREDITORS