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Learn how to:
*Overcome ruthless scare tactics and illegal "late fees" charged by credit card companies
*Legally disarm collection agencies
*Handle lawsuits and credit ruination-cross-complaints and counterclaims you can file against your creditor
*Pressure your creditors to "write-off" uncollectable debt and remove derogatory credit bureau information
To Pay or Not to Pay shows you how to turn the tables on creditors' scare tactics, buy time, and settle your debts for cents on the dollar-legally!
Stanley G. Hilton, J.D., M.B.A., is an attorney, writer, and professor who has been representing debtors and other clients for twenty-seven years. He is a graduate of Harvard Business School and Duke University Law School. A resident of San Francisco, CA, Mr. Hilton is a former U.S. Senate Attorney and aide to U.S. Senator Bob Dole.
|Product dimensions:||5.50(w) x 8.43(h) x (d)|
Read an Excerpt
Chapter 1: THE PHILOSOPHY OF DEBT AVOIDANCE: "BEING STRONG MEANS NEVER HAVING TO SAY YOU'RE SORRY"
From the day they crawl out of their cradles, Americans are taught the values of "paying one's debts." Yet in today's world, what is truly a "legitimate debt" is often a matter of perception, cagey legal strategy, and ever-changing laws, customs and mores.
Every year, millions of American individuals and businesses succumb to the stentorian demands of creditors and collection agencies, throw in the towel, sell or give up their homes, cars and credit cards, by filing for bankruptcy. Yet the real secret is that bankruptcy is rarely the best option available, bankruptcy does not dispose of IRS tax debts or student loan debts, and bankruptcy creates a stigma that will damage the debtor for many years to come.
If bankruptcy is still a stigma because it is an admission of personal failure, debt litigation is the very opposite: a manifestation of personal success, clever tactics and newly discovered self-empowerment.
The psychologists tell us that mental depression stems from feelings of helplessness. Small wonder it is that the more debt people pile on their backs, the more helpless and depressed they feel. No wonder there has been an explosion in sales of anti-depressant drugs, psychiatric hours chalked up, and mental anguish, riding side by side with the cavalcade of debt.
There is no better way to regain one's self-esteem and self-confidence than to "sock it to" one or more of your creditors. Beating your creditors not only gives you a renewed and reinvigorated feeling of accomplishment and control of your personal destiny, but also literally improves your finances by allowing you to pursue a strategy of "selective debt payment," choosing those few creditors whom you wish to pay regularly, in order to preserve continuing "good credit" with them, while pursuing the policy of debt avoidance with other creditors who have violated some rule of law or moral or ethical maxim.
It is indeed an interesting phenomenon, verified by the psychologists, that people generally are conditioned to feel "guilty" if they do not pay their debts on time. This feeling of mass guilt is exploited by creditors and collection agencies, who will resort to any tactic-no matter how harassing or unethical-to squeeze the last dime out of a debt-and-guilt-plagued consumer.
But who are these creditors, anyway, who make us feel so guilty about not paying them? Is it really right, or legal, for a gargantuan bank like Bank of America to charge an arbitrary and exorbitant "late fee" whenever your monthly payment arrives a day late? Is this legal? Does the application of late fee and other dubious charges on your credit account entitle you to a moratorium on paying your debts to the bank? Should it?
A great deal of this book has been about how to hone and use one's legal swords and shields in the courtrooms of America, to mount wars of attrition against over-reaching creditors. But the question we ask in this chapter is, "Is such a strategy morally right? Is it ethical? Is it "just and fair?"
In the Bible, in the Book of Leviticus of the Old Testament, God decreed that every 25 years, all debts must be forgiven during what was proclaimed a "Jubilee Year." The Bible also has much to say against "usury," the charging of interest on loans, and the scorn which the Bible heaps on usurers and moneylenders is unparalleled for sheer volume and vituperation. In the New Testament, Jesus showed his mettle by "overturning the moneychangers' tables" outside the temple, and St. Paul referred to money as "filthy lucre" and as the "root of all evil."
Clearly, western civilization has always had an ambivalent, dualistic attitude toward money, and toward the debt collection system which enforces the world of money. On the one hand, we worship the almighty dollar and all wish we could become millionaires, either by winning the lottery or hitting the big time by a magical stroke of luck. Americans, in particular, worship the Golden Calf of Money, and even preachers shout from their pulpits that one's materialistic success in life is a measure of one's status as "the elect of God."
On the other hand, Americans' worship of money has coexisted uneasily side by side with a deeply felt skepticism about money, about its corrupting power and about the spiritual emptiness of a life spent in the pursuit of materialistic gain. "What shall it profit a man," asks Jesus, "if he should gain the whole world and loses his own soul?"
Those haunting words, echoing down the corridors of time, create a cognitive dissonance in our attitude toward money. We like to see millionaires and celebrities brought down through scandal and bad publicity. Our scandal-mongering press is always on the lookout for a fabulously rich person brought down by his or her own greed, like Leona Helmsley, O.J. Simpson, the Iran-Contra profiteers, and the Enron-Arthur Andersen executive vultures. Though we may not like to admit it, a part of us likes to see rich people and companies fail, because in each of those scandals we share a secret but mighty triumph. If this be so, why should we cringe with guilt at the thought of not paying a creditor on some alleged debt?
Of course, there is no clear answer to this question. For each person who pursues the unbeaten path of debt avoidance, and who marches to the tune of a different drummer, this question can only be answered by looking into one's own soul. Each of us must balance his or her conscience with one's goals in life and the tools created in society to give us what we want.
As any judge and litigator will tell you, "What is legal is not necessarily what is just." As the legendary Chicago attorney Clarence Darrow put it nearly a century ago, "True justice is for angels, not for men."
In this type of an imperfect world, how can creditors insist upon absolute payment of debts? How can they be so sure they are "right" in some legalistic, or moral, sense?
Given the relativity of values in our society, and given the dichotomy and inconsistency in our cultural norms concerning money and debt, wealth and poverty, who is to say what is "right" and what is "wrong," in any absolute sense?
So, whenever you face the inevitable existential question,. "To Pay or Not to Pay," you should think of these things and then make your decision. Let no one else make the decision for you.
America: Land of the Free, Home of the Debt Slave
The United States today is the greatest debtor nation in the history of the universe. Apart from the "national debt," which is owed by the government to "investors" foreign and domestic, the total amount of consumer debt is truly staggering. As of 2002, the total amount of consumer debt in this country exceeds $ 1.3 trillion. This amounts to an average consumer debt of $ 16,000 per adult, which will take an average of 45 years to pay off. Two-thirds of all sales in the annual US economy are sales based on debt. Indeed, consumer debt is the "engine" which drives our economy. Without consumer debt, our economy would come to a standstill.
But what is the significance of this?
In 1890, when the US Census first attempted to measure consumer debt, the average American owed $ 880. That was long before the Age of Credit Cards.
Today, when a credit card is de rigueur for any citizen, to enjoy the conveniences of life, the situation is far different.
What is the meaning and nature of debt? Debt is, literally, a means of financing the purchase of durable goods and services which are far beyond our means and self-discipline. By signing up t borrow money to purchase these items and services, the consumer is voluntarily placing himself into slavery; he is "legally bound" to pay off the lender, no matter how long it takes, no matter how many times the original debt has been multiplied by usury.
What is it about human nature that makes debt a perpetual plague? Why can't people learn to live within their means, to heed the admonitions of the Bible and the sagacious Ben Franklin's Poor Richard's Almanac?
Henry Ford's Ghost Rears its Ugly Head
In the 1920's, an interesting but little-known experiment in debt was carried out by none other than that genius of the Model T assembly line, henry Ford. When the automobile was being mass produced, Old Henry thought he'd apply the Biblical pronouncements against debt and make those damn consumers pay for their cars with an honest buck. Henry Ford ordered all of the Ford dealerships throughout the country to sell cars only to people who promised to make weekly payments on their cars. In this strategy he stood alone. General Motors, his chief rival, adopted a liberal "the sky's the limit" credit policy, and let people buy their cars by rubbing the credit Genie.
What happened? Ford found that his car sales stalled on takeoff, while GM's sales soared into the market leadership. Soon, Ford sales lagged far behind the competition, and even old Uncle Henry at last saw the light and abandoned his weekly payment scheme in favor of the credit Genie.
The experiment is illustrative, because it shows how strongly people-even people in the Roaring Twenties-value their credit genie. Take that genie away, force people to pay "an honest buck for a car," and you will find yourself in a sales wasteland.
Ford's lesson was not lost on a whole generation of American businesspeople. Long-term consumer debt, or "CD," became the norm, accelerating with the invention of credit cards, money chop shops and other forms of "easy credit."
Consumer debt has become so commonplace that one rarely thinks back to the past, when our forefathers warned against it in the most drastic of terms.
"Neither a lender nor a borrower be," wrote Shakespeare, in the guise of Polonius counseling the young Hamlet about to go forth into the world (in our current terminology, the topical advice to such a young man would now be, "A great borrower be.")
In the Bible, God admonishes man in these stark terms: "Borrow not; lend not."
And in the words of an old sage, "borrow like a tortoise, pay back your loans like an eagle."
Today, we have totally reversed this advice, urging consumers to borrow more and more, and pay back less and less, so that our debt-fueled economy of consumerism can continue to run.
Debt has enabled us to overcome one of the most important physical laws, the First Law of Thermodynamics, which says that energy can neither be created nor destroyed. In our world, economy energy is being created daily by the proliferating mass debt. Our economy is a gigantic Perpetual Motion Machine which manufactures great demand and desire, by people who lack the financial means and self-discipline to live within their means.
Indeed, living beyond one's means has become the prevailing modus operandi for Americans. Today, few can afford to pay fro what they purchase. "Desire," long scoffed at and denigrated by ancient sages and the Bible, has become transformed into a Great Virtue in our modern society and economy . It is as if we secretly believed that the grand sum of all nefarious desires will constitute a virtuous Great Good. The sum total of our private vices will somehow create a Great Virtue.
The corollary of this twisted value system of the Debtor Age, is that being a debt slave is a good thing because it forces us to yield to an external form of "discipline"when we cannot impose discipline on ourselves.
But wait a minute! Can this mentality really makes sense? When a society chooses slavery because it admits that it cannot police itself, that society is in great trouble.
So young Hamlet cannot afford a Porsche? No problem! Just buy it on credit, and wind up paying $100,000 for a car not even worth $20,000 by the time it is paid off.
You say you want to purchase a yacht but cannot afford the cash? No problem! Just hand over the plastic, and presto! The dream yacht is yours.
You say you can't possibly buy a house priced at 6-figures? No problem1 Just signed the mortgage on the dotted line, and your palace is yours.
The credit card is today what a mythical Genie was in mythical times past. The credit card genie can literally get you anything beyond your means,. If you rub him the right way, and if you have to sell your soul to the credit devil to pay off the debt, so what? Like Faust, today's debtor can indefinitely draw out the night before his soul is required of him. With Faust, he can chant: "O Lente Lente, curit noctis equi."
"Just Say No" to Your Creditors
But does the modern American debt slave really have to fulfil his contract with the creditor devil? What would happen if debtor-slaves began to revolt en masse? Would the system shut down if debtors defaulted on a mass scale? Who would be around to "collect the Uncollectible?"
Well, the fact is that debtors can "just say no" to their creditors, and the purpose of this book is to show them how.
Young Hamlet can and will indeed confront that eternal question, "To Pay or Not to Pay," and will be shown how to "Just Say No."
Interestingly, one of the most notorious debtors of all time, Ronald Reagan, gave us that immortal line which is every debtor's lifeline to survival: "Just Say No."
Reagan, who charted a course that landed the country in huge debts, with multi-billion dollar annual deficits and multi-trillion dollar national debts, also told us, "Just Say No." Widely touted as "the most popular president in history," our Great Debtor President gave us a line which should be on every debtor's lips: Just Say No.
Every debtor in this country should take up his mantra-literally.
Table of Contents
|Dedication and Acknowledgments||vi|
|Part I||The Philosophy of Debt Avoidance||1|
|Chapter 1||"Being Strong Means Never Having to Say You're Sorry"||2|
|Chapter 2||Collection Agencies: The 800-Pound Gorillas in the Ring||11|
|Chapter 3||Credit Repair Scams: The Snake Oil Salesmen of Our Time||19|
|Chapter 4||Bankruptcy: An Illusory Deus Ex Machina for Debtors||31|
|Chapter 5||The Fungibility of Money and the Economics of Litigation||41|
|Chapter 6||Litigation: Debt Eradication in Practice||50|
|Chapter 7||The 11th Commandment: "Debtor, Protect Thy Assets"||64|
|Part II||Creditors Sue Debtors: The Debtor on the Defense||71|
|Chapter 8||Medical Bill Collections: The "Speedy Gonzalez" of the Credit Monsters||72|
|Chapter 9||The Law of Supply and Demand: Student Loans||87|
|Chapter 10||Tax Wars and Grunts: Battling the IRS||91|
|Chapter 11||"Housejackers, Beware!"||97|
|Chapter 12||"Carjackers, Beware!"||109|
|Chapter 13||Simon Says: "The Tenant Is Always Right"||115|
|Part III||Debtors Sue Creditors: Debtors on the Offense||121|
|Chapter 14||Discrimination: Playing the "Joker's Wild" Card||122|
|Chapter 15||Riding Shotgun: Class Action Against the Creditor||129|
|Chapter 16||The Last Resort: Suing the Stockbroker||133|
|Chapter 17||The Steamroller of Countersuits: Antitrust||140|
|Chapter 18||"They Made Me Do It": Plastic Unlimited and the Duty to Warn||151|
|Chapter 19||Fighting Collection Agencies with the Law||156|
|Chapter 20||Aim High: Aim for Settlement||161|
|Part IV||How Courts Work: The Black Robes and Other Players in Action||167|
|Chapter 21||Masquerade at the House of Judges||168|
|Chapter 22||Escaping the "Summary Judgment" Monster||177|
|Chapter 23||Criminal Law: The Modern-Day Debtor's Prison||183|
|Chapter 24||Expert Witnesses for Hire: Pied Pipers of the Courts||192|
|Chapter 25||Sealing the Deal: Suing Your Way to a Clean Credit History||197|
|Chapter 26||To Hire or Not to Hire a Lawyer||204|
|Appendix A||List of Causes of Action a Debtor Can Sue a Creditor For||210|
|Appendix B||List of Laws of the Law||211|