Thinking About Settling a Debt Lawsuit? Watch This First

[00:00:00]If you were served and you're getting ready to pay a settlement for that debt, I need you to stop and watch this video.

[00:00:04]The first thing I want to tell you guys is that I am not an attorney and this is not legal advice. If you are seeking legal advice, please consult an attorney in your local area. The first thing I want to let you guys know is that a lot of consumers are under the impression that, "Oh my gosh, I got this credit card. I never paid them off." Whatever the debt is, and so I must owe this debt. That is not 100% true. The same way that you pay taxes at the end of the year, is the same way that companies pay taxes at the end of the year. You have to keep in mind that a lot of these companies are in the the business of loaning money. So, if they hold onto a whole lot of debt, they wouldn't be able to lend money to consumers. That is why when your debt becomes non-performing, they do one or two things. They'll either discharge the debt through the IRS and get a tax credit for that, which waves your obligation. If it's over $600, you receive a 1099-C. If it's under, you do not. But legally, you no longer owe the debt.

[00:01:03]The second thing that may happen is that they'll securitize that debt, which means they will transfer the ownership of that debt to a trust.

[00:01:10]It's a pool of investors who trade it like the stock market, and in return, the trust pays them back for the amount that was owed. They become the manager of the account, but do they not but they do not legally own the debt. With that being said, if you are to go and settle with that company, you may be paying paying a debt that was already discharged through the IRS or to a a person that doesn't legally own the debt. So, there is a scenario where the trust can then come back and sue you for that same debt you paid that original creditor. This is the same thing that could potentially happen with third parties. So, I advise that before you pay your debt, you do your research.

[00:01:51]And if you guys need help with that portion, we do help you with identifying where the weaknesses are in your case, helping you format an answer so that you can actually defend yourself in court, and make the plaintiff prove that they have standing and the legal right to own the debt, to collect on the debt, and that they can tie that debt to you.

[00:02:12]If you guys like more information like this, give me a like, a share, a follow, and I'll be seeing you in the next one.