Wiping Out Your Debts
           Conventional and Unconventional Techniques
                               by
                   John Paul Jones for P/HARM





[ Introduction ]

It seems that in today's society, one lives by being in debt in
today's credit-oriented society.  As a matter of fact, there is
nothing wrong with owing money to someone.  The majority of
businesses get started by borrowing money.  It becomes wrong when
you get into debt over your head and when creditors begin to call
and harass you.  Well, now it is time to DO something about it
and not have your debts worry you all the time.


[ Conventional Techniques ]

Probably the most obvious answer to solving your debt situation
is by getting a loan to consolidate your debts.  Many  banks and
financial institutions offer this kind of service.  Personally,
my favorite conventional method of dealing with creditors is by
writing them a letter.  A letter has a better advantage because
it IS in writing and YOU have a copy of it.  The disadvantage is
that is it IS in writing and that it can become legally binding. 
Therefore you should be as vague as possible when making any sort
of promises.  Here is a sample letter that you can use:

Gentlemen:
     I just received your letter informing me that my account No.
12345, is past due.
     I have made every effort to meet this payment. 
Unfortunately, due to difficult times which my family is
currently seeing its way through, I am at the present time unable
to make good on current payments at the rate previously agreed
to.
     However, I feel certain that my financial situations will
improve in the near future, and that I will at that time be able
to resume payments according to the agreed schedule. 
     In the meantime, I am enclosing a token payment of $______
to show my good intentions.

                                                                                                    Sincerely yours,


[ Unconventional Techniques ]

This is my favorite techniques in getting your creditors to stop
harassing you.  Federal and State laws now prohibit such tactics
of collections such as telephoning a debtor(you) and harassing. 
The laws also prohibit a creditor to send letters to a debtor
threatening to profane their credit or threatens that certain
legal actions will be taken.  THE THREAT OF CRIMINAL ACTION IS
ILLEGAL!  

A creditor or collection agency may NOT use a name that can
mislead someone into thinking that they are some government
agency, or represent themself as a government agency.  Nor may
they falsely represent themself as a lawyer, law enforcement
agency, or private detective.

Collection agencies are prohibited from calling on, or otherwise
contacting a third party such as a neighbor or employer to
discuss your debt.

Furthermore, the Federal Communication Commission has ruled in
favor of debtors, that it is illegal to use the telephone by a
creditor or collection agency to harass abuse , or otherwise
frighten a debtor, or to call at his home to discuss the matter
with a family member.

All of the above mentioned tactics are covered by the Fair Debt
Collection Practices Act, passed in March, 1978, a copy of which
is available from the Federal Trade Commission regional offices
whose address follows.  All these restrictions apply to
collection agencies.  Restrictions on business such as retail
stores, banks, and small loan companies, are more lenient.

Any complaint against a collection agency, finance company,
retail store , or other creditor, should be addressed to the
Bureau of Consumer Protection, Federal Trade Commission, at one
of the following regional offices:

     25 Federal Plaza             New York NY 10007
     John F. Kennedy Fed Bld  Boston     Mass.02203
     2120 L Street, N.W.       Washington D.C. 20037
     730 Peachtree St.           Atlanta GA   30308
     1240 E. Ninth St.           Cleveland  OH 44199
     55 E. Monroe St.             Chicago    Ill 60603
     911 Walnut St.                  Kansas Cty MO 64206
     500 S. Ervay St.             Dallas TX   75201
     450 Golden Gate Ave       San Francisco CA 94102
     11000 Wilshire Blvd.     Los Angeles   CA 90024
     1511 Third Ave.               Seattle    WA 98101

Remember, if you feel that the creditor violated your rights by
the use of the telephone then notify your telephone company and
the Federal Communications Commission.  The FCC's address is:
     1919 M Street, N.W. Washington, D.C. 20554

Send a copy of a letter along these lines to the creditor and/or
agency if one is involved:


     Gentlemen:
     On June 26, a representative of your firm acting on your
behalf, telephoned my home and discussed an alleged debt with a
member of my family.  Furthermore, on July 1, I received a letter
from you stating your intentions of profaning my credit if I did
not make a certain payment that claim is now past due.
     Your practice was in invasion of my privacy, and was a
defamation to my character.
     I will NOT permit my family nor myself to be subjected to
your illegal tactics.  I have reported your firm to the Bureau of
Consumer Protection, Federal Trade Commission.  Continued
harassment will result in my immediately filing suit against your
firm for damages.  
                                                                                                    Sincerely yours,


Letters such as the above will give the creditor the impression
that you know your rights and are not easily frightened.  This
will also give the impression that if he were to file suit in
court, he would be met with strong opposition.  He must now weigh
and justify the high cost of further action against you, against
the amount of money he may recover if and when he should win.  By
common sense, no creditor likes to tie themselves up with law
suits especially when the have the impression that they are in
for a tough time and IF there is a collection agency involved
they will get 50% on any money collected anyway.   Also, no
agency can afford the expense and bother of going to court when
the chance of winning has already been challenged.  So unless the
amount of money involved is real large, you stand a good chance
that the creditor will write off your account as "UNCOLLECTIBLE"
and forget it.  They are not in business to lose more money than
necessary.  Furthermore, thy must take into consideration that
your threat of suing can be a real one and they stand to lose too
much to take any chances.

If the creditor writes your debt off as uncollectible, they can
not report it to the credit-reporting bureaus.  They have no
claim against you!  All you did was challenge their business
practices and it was THEIR decision to cancel your debt.


Here's another tactic that can be used quite effectively.  Make a
list of all your creditors and the amounts owed.  This should not
include anyone you have a secured loan with (home mortgage, car
payments, etc.).  Lets say the total amount you owe is $5000 and
you can raise  $500.  Of course the higher the dollar amount, the
more likely they are to accept.

If you can get the help of a friend, lawyer, or legal aid society
so much the better.

Have a separate letter typed to each individual creditor along
these lines:

Gentlemen:
     I have been retained by (or, represent) Mr._________ for the
purpose of settling as many accounts as possible before filing a
petition in bankruptcy.
     Mr. ___________ total debts at the present is $5000.00, with
assets on only negligible value.
     In an effort to settle honorable with his creditors, Mr.
________ has managed to raise $500.00 for this purpose.  This
money will be distributed on an equal percentage bases only among
the creditors who accept this offer.
     Of course your percentage my be as little as ten percent,
and may be much more (may be large enough to repay the debt),
dependent on the number of creditors accepting this offer.
     The funds in settlement of debts due will be mailed on
_________. (write in the date of 10 days from the time you mail
this to the creditor.)  Your response must be received prior to
this date.
     To accept this offer, all you need to do is sign the
enclosed copy of this letter and return it to me using the
enclosed self-addressed envelope.
     Pursuant to the provisions stated above, we hereby agree to
accept a minimum of $________, or a greater amount pursuant to
the number of creditors accepting this offer, as full payment and
settlement on account number _______________.
                  Name of Creditor _______________
                  Authorized signature ___________
                  Date ___________________________


A letter like this is very effective.  None of the other
creditors will want to be the fall-guy.  Sure they only have the
chance of receiving only 10%, but by the same token there's a
chance of receiving alot more and by nature, creditors love a
gamble.  They'll jump at your offer, knowing that this is one
play the stand to win at least something, and cannot lose more
than what has already been lost.


[ Conclusion ]

Presented here are some of your legal rights as a debtor and how
to wipe out your debts, some at even a fraction of the cost that
you owe in total.  If the laws say you can do it, why buck it? 
You probably couldn't repay the entire total of debts with todays
high interest rates.  As always, you should consult a lawyer or
legal aid society just to be on the safe side.  I will be writing
more files on the subject and other successful stalling
techniques in the future.  If you have any comments or
suggestions please feel free to contact me through any of the
P/HARM members or nodes.  You can also reach me on The City of
Boldhome
 (714)831-2860.

{SPECIAL GREETS go out to:}
Master, Dopey, P/HARM, and the Oracle.