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Learn How Betty Fought Back Against the Debt Sharks

I received a phone call from Betty early one Wednesday evening. Betty is 81 years old and she lives alone in Phoenix, Arizona. I live on Cape Cod, Massachusetts so there's a two hour time difference. I could sense by the tone in her voice she was very upset. She demanded I give her back her money. All $695 dollars. I had no idea what she was talking about.

"What $695 dollars? I never charged you $695 dollars," I said.
"YES YOU DID," Betty shot back. "You charged me $695 dollars for the ZilchWorks report, and I want it back."

Betty had received an unsolicited call from one of those Debt Sharks. She was the perfect prey; single, elderly, debt-ridden.

Betty was lured with an attractive promise to lower the interest rates on her credit cards. She was told it would only take a minute and "with her permission" they would contact the credit card company and get a decision right away, while she waited. So, that's what happened. Betty agreed and was put on hold while the caller contacted the credit card company to negotiate a lower interest rate. Or so she thought.

After a brief pause, Betty was rejoined to the phone conversation. This time there was a third person on the line, a woman. This woman claimed to be with the credit card company. She greeted Betty very pleasantly using her full name. Even verified Betty's address and phone number. The woman went on to explained how the "nice man" on the other phone had clarified things up quite nicely and a lower interest rate would be placed on her credit card account. "Thank you for being such a good customer Betty," and just like that the woman was gone.

Betty was put on hold two more times and rejoined to the calls each time. Both conversations had gone similar to the first one.

The caller then asked Betty to tell him about all of her debts, because he was going to create for her a debt management plan. Which included the new lower interest rates of course. This step-by-step, debt management plan would show her exactly how much to pay each creditor each month. It was guaranteed to save her money and get her out of debt as quickly as possible. This would only cost $695 dollars. And of course it had to be done immediately or Betty would lose out on the lowered interest rates that had just just negotiated. Betty agreed. She paid the $695 dollars and a few days later she received her ZilchWorks report. And that's why she called me.

Betty and I talked for quite a while. I eventually convinced her that it wasn't me who did this. It took several minutes. She kept insisting that it was me because "after all" my phone number was on the bottom of the ZilchWorks report she received.

I explained to Betty, "I don't create debt management plans for other people. I create software."
"But your phone number is on the bottom of the ZilchWorks report," Betty insisted.
"Betty I assure you It wasn't me", I said.
"Then why is you phone number on the report?" Betty fired back.
"Someone bought my software and never change the default value," I replied.

"How did you receive the ZilchWorks report?" I asked.
"It came in the mail," she replied.
"Do you still have the envelope it came in?"
"Yes, yes... hold on let me grab it out of the trash."
"Does it have a return address? What is it?" I prodded.
"Clear Financial Solutions, 3208 E. Colonial Dive #157, Orlando FL 32803," came Betty's response.

I thanked Betty for this information. We agreed that both of us were victims. It told Betty to contact the credit card company and dispute the $695 charge. I also told her I would reach out to the Florida attorney general's office and let them know this kind of fraud is happening.

I checked back with Betty a week later and yes, she had gotten the $695 charge dropped from her account. I also reached out to Michael Wenger, Florida attorney general. It turns out, Clear Financial Solutions was operating out of a UPS Store in Orlando, Florida. Wenger opened an investigation.

Beware of Debt Sharks

If you have financial troubles you may be vulnerable. There is an entire industry of deceitful businesses out there just waiting to pounce on debt-ridden consumers. They have perfected their message. They know exactly what to say and how to say it. They prey upon defenseless people. Good people. People who have unfortunately stumbled upon financial hardship, many for the first time. They are known as “Debt Sharks”.

Just like real sharks, debt sharks can sense when their prey is most weak. They have been trained to smell fear. They are masters at creating terror and stirring up anxiety. They keep at it until they get that first little drop of blood in the form of a payment. Any size payment. Even a small token payment. That payment turns into a feeding frenzy. They want more, and more, and more.

If you are looking around on the Internet for an instant, quick-fix solution to financial woes - STOP.
There isn’t one out there. The Internet is a breeding ground for these debt sharks. Don't let the debt sharks con you, or push you into one of their scams, no matter how loud they get. The most important thing you can do right now is educate yourself on your next steps.

Surviving Debt

Expert Advice for Getting Out of Financial Touble

You can survive debt. This is an outstanding resource available from the National Consumer Law Center called “Surviving Debt” and it's available in print or eBook for $20 dollars.

Table of Contents

Chapter 1 Six Essential Rules for Surviving Debt

Chapter 2 Responding to Debt Collectors

  • Introduction
  • Do Not Let Collectors Pressure You
  • What Collectors Can Legally Do to Collect on a Debt
  • Nine Ways to Stop Debt Collection Harassment
  • Illegal Debt Collection Conduct

Chapter 3 What You Need to Know About Your Credit Report

  • Introduction
  • What Is a Credit Report and a Credit Score?
  • How Does Continued Non-Payment Affect Your Credit Score?
  • Who Sees Your Credit Report and Who Does Not?
  • How to Review Your Credit Report
  • Coping with a Bad Credit Report
  • Rebuilding Your Credit

Chapter 4 Collection Lawsuits

  • Introduction
  • Will the Collector Actually Sue You?
  • Can You Win the Lawsuit?
  • How to Respond to a Collector’s Lawsuit
  • Common Defenses to Raise
  • Common Counterclaims to Raise
  • Special Rights If You Are Active Duty Military
  • Going to Court
  • Be Wary of Deals You May Be Asked to Make in the Court’s Hallway
  • Undoing a Default Judgment
  • Your Appeal Rights

Chapter 5 Taking Out New Loans to Pay for Old Debts

  • Introduction
  • Borrowing from Friends and Relatives
  • Borrowing Against Your Home
  • New Credit Card Debt
  • Credit Union Loans
  • Loans to Avoid

Chapter 6 Reverse Mortgages

  • Overview
  • Who Should Consider a Reverse Mortgage?
  • How the Reverse Mortgage Works
  • Reverse Mortgages Are Still Subject to Early Foreclosure
  • What About My Spouse or Partner?
  • Is a Reverse Mortgage a Good Idea?
  • How Does a Reverse Mortgage Stack Up Against a Traditional Mortgage, Refinancing, or Home Equity Loan?

Chapter 7 Choices to Avoid at All Costs

  • Introduction
  • Debt Elimination Scams
  • Debt Settlement Offers
  • Foreclosure Rescue Scams and Sale and Lease Back of Your Home
  • Rip-Off Reverse Mortgages
  • Credit Repair
  • Payday Lenders
  • Auto Title Lending
  • High Cost Installment Loans
  • Refinancing and Consolidation Loans
  • Student Loan Debt Relief Scams
  • Rent to Own
  • Auto Brokers
  • Subprime Credit Cards
  • Bouncing Checks and Postdated Checks
  • Using Overdrafts As Credit
  • Selling or Giving Away a Creditor’s Collateral
  • Get-Rich-Quick Schemes

Chapter 8 Reducing Your Expenses

  • Introduction
  • Tips to Reduce Expenses Described Elsewhere in This Book
  • Saving Money on Insurance Coverages
  • Medical and Dental Care
  • Food Expenses
  • Appliances, Furniture, and Electronics
  • Check Cashing and Banking
  • Pressure-Related Shopping
  • Winter Holiday Cycle of Debt
  • Other Expenses

Chapter 9 Options for Increasing Your Income

  • Introduction
  • Wage-Related Options
  • Income Assistance
  • Food Assistance
  • Emergency Programs
  • Veterans Benefits
  • Reporting Change in Income If You Receive a Needs-Based Benefit
  • Other Ways to Increase Income

Chapter 10 Keeping Track of Income, Expenses, and Debt

  • Introduction
  • How to Remember Your Expenses

Chapter 11 Medical Debt

  • Introduction
  • Don’t Pay Medical Debt Ahead of Other Debt or Borrow to Pay Medical Debt
  • Debt Collectors and Medical Debt
  • Limits on Credit Reporting of Medical Debt
  • Can a Hospital Turn You Away If You Owe It Money?
  • Correcting Your Medical Bills
  • Requesting Financial Assistance
  • Will a Health Care Provider Sue You for Unpaid Bills?

Chapter 12 Credit Card Debt

  • Introduction
  • When to Pay on Your Credit Cards and When to Use Them
  • How a Delinquent Credit Card Account Affects You
  • Special Cards Create Special Problems
  • Interest Rate Reduction for Members of the Military on Active Duty
  • Negotiating to Reduce Your Credit Card Debt
  • Avoid Debt Settlement and Debt Elimination Companies
  • Credit Counseling and Debt Management Plans
  • The Bankruptcy Option

Chapter 13 Student Loans

  • Introduction
  • First Step: Identify What Kind of Loan You Have
  • Rights to Cancel Your Federal Student Loan
  • How to Reduce or Delay Your Payments
  • What to Expect If You Are in Default on Your Student Loan
  • Getting Out of Default
  • More Help with Federal Student Loan Problems
  • Private Student Loans

Chapter 14 Car Loans and Repossessions

  • Introduction
  • Strategies to Prevent Repossession
  • What to Do After Your Car Is Repossessed
  • Creditors’ Collection Efforts After the Repossession Sale—The Deficiency Action

Chapter 15 Utility Terminations

  • Introduction
  • Your Rights When the Utility Threatens to Terminate Your Service
  • How to Get Your Utility Service Turned Back On
  • Ways to Reduce Your Utility Bills

Chapter 16 What Every Homeowner Should Know About Mortgage Payments

  • Introduction
  • First Considerations
  • Surprising Facts About Partial Mortgage Payments
  • How to Determine the Status of Your Mortgage Loan
  • Disputing the Amount Due
  • Escrow, Taxes, and Insurance
  • Reduced Mortgage Rates for Active Duty Military

Chapter 17 When You Are Having Trouble Making Mortgage Payments

  • Introduction
  • The Help Offered Depends on the Lender Involved
  • Options for Fannie Mae and Freddie Mac Loans
  • Options for FHA-Insured Mortgages
  • Options for VA Mortgages
  • Options for the Rural Housing Service (RHS) Guaranteed Loan Program
  • The RHS Direct Loan Program
  • The Loss Mitigation Application Process

Chapter 18 Defending Your Home from Foreclosure

  • Introduction
  • Your Rights in the Mortgage Foreclosure Process
  • Getting Legal Advice to Stop a Foreclosure; Advice to Avoid
  • Delaying the Foreclosure Process
  • A Chapter 13 Bankruptcy May Stop a Foreclosure Permanently
  • State Temporary Bans on Foreclosure; Conference and Mediation Programs
  • Your Options After the Foreclosure Sale
  • Special Protections Against Foreclosure for FHA, VA, and RHS Mortgages
  • Special Protections for Active Duty Military
  • Foreclosure of Land Instalment Sales
  • Foreclosure Protections Where Mortgage Resulted from a Home Improvement Scam
  • Foreclosures of Manufactured (Mobile) Homes
  • Foreclosure for Unpaid Condominium Fees

Chapter 19 Property Taxes and Tax Sales

  • Introduction
  • Reducing Property Tax Debt
  • Managing Seriously Delinquent Property Tax Debt
  • Contesting a Tax Sale
  • Setting Aside a Completed Tax Sale
  • Redemption Following the Tax Sale

Chapter 20 Evictions and Getting Out of a Lease

  • Introduction
  • Getting Out of a Lease
  • Responding to a Landlord’s Eviction Attempts

Chapter 21 Civil Court Judgment Debt

  • Introduction
  • Civil Court Judgment Debt—What It Is and What It Means
  • Garnishment of Your Wages
  • Government Benefits Completely Protected from Garnishment
  • Freezes and Seizures of Your Bank Account
  • Protecting Your Car and Personal Possessions from Seizure
  • Protecting Your Home from Seizure
  • The Debtor’s Examination and Debtor’s Prisons
  • Exemption Planning
  • Workout Agreements to Protect Wages and Property
  • Bankruptcy Is the Most Powerful Way to Protect Wages and Property

Chapter 22 Debts Related to Criminal Law

  • Introduction
  • Identifying the Type of Criminal Justice Debt You Have
  • Why You Must Pay Special Attention to Criminal Justice Debt
  • Defending Against Incarceration for Non-Payment of Criminal Justice Debt
  • Keeping or Reinstating Your Driver’s License
  • Payment Plans and Other Ways to Delay or Reduce Payment
  • Asserting Your Rights Against Collection

Chapter 23 Federal Income Tax Debt

  • Introduction
  • File the Return on Time Even If You Do Not Pay the Taxes Owed
  • Options for Paying Tax Debt
  • Spousal Defenses
  • Steps the IRS Can Take to Force Payment
  • Effect of Bankruptcy on Your Tax Debt
  • Seeking Help

Chapter 24 Deciding Whether and When to File Bankruptcy

  • Introduction
  • What Bankruptcy Can and Cannot Do
  • Understanding the Difference Between a Chapter 7 and a Chapter 13 Bankruptcy
  • How a Bankruptcy Can Help You
  • The Best Time to File for Bankruptcy
  • The Cost of Filing Bankruptcy
  • Common Misconceptions About Bankruptcy
  • When Bankruptcy May Be the Wrong Solution

Chapter 25 How the Bankruptcy Process Works

  • Introduction
  • Step One: Get the Right Help with Your Bankruptcy Filing
  • Step Two: Exemption Planning
  • Step Three: The Credit Counseling Requirement
  • Step Four: Choosing Between Chapter 7 and Chapter 13
  • Step Five: Deciding Whether to File Bankruptcy Jointly with a Spouse
  • How Chapter 7 Bankruptcies Work
  • How Chapter 13 Bankruptcies Work
  • Bankruptcy’s Tax Consequences
  • Using Credit Wisely After Bankruptcy


  • Introduction
  • Entries A-D
  • Entries E-P
  • Entries Q-Z