Debt Relief Service Strikes Again

Every once in a while our clients truly surprise us. A sharp-witted business plan, a cutting edge marketing idea, or the new found ability to face their most aggressive creditors with confidence.  However, for the first time, a Debt Relief Services client has left me just short of speechless.  For those of you who may not know, Debt Relief Services is our non-profit division that focuses on people who have lost their business and are now faced with financial disaster with almost no resources available to protect themselves with.  We represent these clients at little to no charge, settling their debt with the same ferocity we do our regular Second Wind Consultants clients, achieving the same level of success and saving these people from liquidation and bankruptcy.

The DRS client I reference is actually two woman, one elderly and disabled, and her daughter, with little to no legal or financial back round or education, who were able to out-smart a $700/hour attorney representing the bank. These woman (Mother and Daughter) were financially devastated by the loss of their business and the passing of the Husband/Father of the family.  After liquidating all assets and investing them into the failed business, they were left to live off of very minimal social security income, as the bank convinced them to forfeit the husband’s life insurance policy to pay interest and principal payments on the loan.  They drive a 20 year-old car that is only worth scrap metal value.  Their home is underwater no matter which way you look at it, and the only reason they aren’t losing it to foreclosure is due to the Obama Making Homes Affordable Program which allowed them to modify their mortgage payments based on their income. THEY OWNED NO OTHER ASSETS, NO RETIREMENT FUNDS, NO INHERITANCE, NOTHING

Nonetheless, the bank found the highest paid attorney in the state and pursued them legally and aggressively, racking up thousands of dollars in legal fees.  Meanwhile, the banker and I are going through the process of slowly examining their financial situation, the closing of the business, the flow of cash from the business assets, etc, and working towards the ultimate goal of settlement.  The banker, whose to date has been reasonable and cooperative.  The attorney, not so much.

My advice to my clients is always to not fight the legal battle.  You borrowed the money, you cant pay it back, you have no defense.  No matter how hard you try, the bank will ultimately get the judgement they are seeking.  However, in this case there were obviously signs of predatory lending.  From possible misrepresentation of guaranty documents, to how the life insurance of the late husband was handled, to how the personal guaranties are written.  However, due to the very limited financial status of the guarantors I found it unlikely that they could fund the legal fees necessary to litigate over the matter and told them that fighting the case without an attorney was likely useless and they should just allow the bank to get the judgement they seek and we can settle the debt thereafter.

However, my clients had been kicked around too much.  They needed an outlet to tell there story.  Even if it did nothing and the judge tossed them out of the court and awarded the judgement to the bank, even if they were embarrassed by the legal counsel for the bank, they had to try to tell their story.  They went to court 3 or 4 times.  The opposing counsel did everything possible to intimidate them and discourage them from further confrontation, sending them home from court in tears a couple times.  With enough of my coaching and preparation, they held their poise and continued their course.  Eventually the bank put forth all of their allegations and my clients had a chance to respond in writing.  After preparation they wrote a very candid and honest response… They told their story

The judge called them and opposing counsel back to court this past week.  First, he brought the bank’s attorney into his chambers and notified him of his immediate decision and then dismissed him from the court room.  The elderly client was unable to enter the judges chambers due to her wheel chair, so the judge cleared the court room and spoke to my clients directly… He read their story and informed them that he was not awarding the judgement to the bank that day.  He delayed the process for 90 days and instructed the bank to settle this debt reasonably in that time frame before he brought such a simple matter back into his court room.  He advised my clients to make no further allegations, as a lengthy legal battle was not in their best interest, but to focus on settling through our services.

The way I see it, these two woman just put the pressure back on the bank to settle.   The bank has 90 days to settle with us and the clock is ticking.  If we put forth a reasonable offer (and we will) and it gets rejected, I am curious to see how the judge reacts.  As it stands now, without the judgement they have failed to get, the bank cannot continue to collect against my clients…  All this due to the determination of my clients and sense of reason from the judge.

These two elderly woman found a way to use the legal system to their advantage, outsmarting a $700/hr attorney…. Nothing short of amazing

90 days and counting… Stay tuned.