Debt Settlement, Debt Management, Debt Reduction Services, credit restoration, Alternative Debt Relief 

Everything that debt validation seeks to do is based on federal law. There are certain laws in place tha are designed to protect you, the truth is that the credit card companies, the credit reporting agencies, and especially the debt collectors either do things that are out of compliance with the Federal Law or literally violate provisions of Federal Law. It is through their non‐noncompliance and their violations that Debt Validation of America (DVA) is able to accomplish the main objective of the program., which is getting the client to debt freedom, Negotiating a settlement, correcting errors on the credit report, and finding creditors in violation of consumer credit laws. This is a very effective process simply because it is based on Federal Law.

Credit Restoration

The process works like this:
If you decide to obtain the services of Debt Validation of America (DVA) you will cease paying your credit cards and Debt Validation of America will go to work on the three areas outlined above. DVA will begin by restoring your credit report, by pulling all three credit reports and begin disputing anything on there that is negative now or that appears negative during the course of this process. The nature of the dispute that occurs with the credit bureau is very different than one might imagine. DVA disputes with the credit bureau based on the fact that they are out of compliance with reporting law. They are governed by the Fair Credit Reporting Act and in the act in section 609, there is a requirement that they maintain hard copy of supporting documents, verification documents, documents that verify that any account they are reporting negative about you is indeed your account.

This was inserted in the law because studies have shown that 70‐90% of all credit reports contain errors. So the law simply requires that credit reporting agencies, if they are going to report something negative, to have on hand a document verifying that it is indeed your account. This is generally along the lines of your credit card agreement with your signature. Well, the credit reporting agencies, absolutely DO NOT do this, it’s not that the documents are not available, the documents are readily available, your creditor has the documents, but the creditor and the credit bureau are different entities, and the credit bureau DOES NOT have the required documents. Again, they could get them…but they simply do not. DVA has a series of letters that they send to the credit reporting agency where they challenge them with the fact that they do not have the verification documents. They ask them “where is the required verification document the law requires you to have…either produce the document or remove the negative reporting, or be sued?” That is what the provision of the law is.

Invalidating Your Debt

Debt Validation of America deals with your debt in two ways, they deal with the original creditor who issued the debt as well as with the debt collector that ends up with the debt. DVA sends out a proprietary letter to your original creditor, challenging them on the validity of the debt. They are challenged to prove that a valid debt ever existed, that they ever lent you any money using generally accepted accounting principles and the creditor absolutely cannot do that.

Although this may sound odd, because you know that you have the credit card and you know you spent the money, but it has to do with how banks work. Banks work very differently than people understand and very differently than the bank itself represents that it actually does. Banks do not lend money…banks CREATE money. It is an entirely different process. In the United States, under the Federal Reserve System, we operate with what’s known as a Fractural Reserve Lending System. It works like this: Let’s say you have a $1,000 CD in a bank, by now the bank will pay you about 5%. Most people think that the bank takes about $1,000, turns around and loans it out to someone else, making about 10,12,15%...whatever the bank can get and that the banks money or profit is in the spread. The difference between what it pays for the money and what it can lend the money out for.

This is absolutely not how the process works. Under this Fractural Reserve Lending System, a bank is allowed to lend 10 times its reserves. So here’s what they do, they take your $1,000 and reclassify it as a reserve, which now allows them to make $10,000 in loans on your $1,000, to literally CREATE $9,000 in random money. The money that you borrow from a bank does not even exist until the moment you’ve borrowed it. It ceases to exist when you’ve paid it off. BUT while it is in existence they are charging you all kinds of interest and fees. Now you have begun to get a picture of why banks are highly profitable.

With this, DVA challenges the bank under the Truth and Lending Act and the Fair Credit Billing Act. In some cases when the bank received the letter from DVA they will zero your debt out and that is the end of it. But that is not normally how it works and not what is expected to happen. DVA sends the letter for two reasons: establishing some legal ground that is going to benefit us later, and secondly, we are looking to hasten a natural process. What we expect the bank to do is to simply get rid of your debt.

Now, they are going to do that anyways because when you cease paying a bank and you have not paid them for 6 months, by law they HAVE to write your debt off. They have to charge it off, take if off their books as a performing loan. Now when that happens the bank suffers no financial detriment. The bank has insurance on your debt; you have paid the premium on that insurance in your annual fee. The Bank even makes a little money, gets a generous tax credit on the bad debt, and turns around and sells the collection rights for the debt off to a debt collector for a few pennies on the dollar. So, the bank is made whole and they are out of the picture and in come the debt collectors.

Third Party Debt Collectors
and the Fair Debt Collection Practices Act
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When the debt collector enters the picture there is another Federal Law that comes into play, it’s called the Fair Debt Collection Practices Act. It’s a law designed to present abuses in the collection industry. However, it is a law that the collectors ignore. They ignore because they know that the general public does not know the law or no means to enforce the law, and frankly they ignore it because there is a lot of money in debt collection. Debt collection is a highly profitable business.

They buy your debt for maybe, 2, 5, 10 cents on the dollar, but they come to collect not even 100% of what the debt used to be because they are going to add their own interests’ fees and penalties and they are going to want to collect 120%, 150%, maybe 200% or more of the original debt and when you pay a debt collector you are not paying your creditor, your creditor is already out of the picture, you are simply putting profit in the hands of the debt collector and that is why they are so aggressive. They will literally lie, cheat, steal, and they will use fear harassment and intimidate you. They will do whatever they can do to get you to pay because it goes in their pockets. However, when they do the things that they do, they violate the Federal Law, this Fair Debt Collection Practices Act, and they can be held accountable, and they ALL violate the law.

There is no such thing as a debt collector that does not violate the Fair Debt Collection Practices Act. For instance, one thing they all do: Let’s say one of your accounts is with Bank of America, you quite paying Bank of America, Bank of America then writes your debt off, they sell the collection rights to the debt collector, then the debt collector calls you and says “Mr. Jones, I am calling you about this money you owe Bank of America.” Well, right there he is lying to you; he is violating the Fair Debt Collection Practices Act, because the truth is you no longer owe Bank of America anything. See, Bank of America has gotten paid, because we talked about it, they got their insurance money, their tax credit, and they sold the collection rights to the debt collector.

On Bank of America’s books your account will show a zero balance. In fact, if you were to call Bank of America at this and say “Oh I just won the lottery and want to pay off my credit card debt,” they would tell you they could not take your money. They would refer you back to the debt collector and that’s because you do not owe Bank of America anything. The debt collector does not want you to know that, nor does he want you to know that he bought your $10,000 credit card debt for $300 or $500, because he is going to come to you and say “Well, Mr. Jones it was $10,000 originally but now it is 12,000, 13,000, or 15,000 dollars now because of interests fees and penalties,” whatever number they come up with, “…but I’ll tell you what if you can come up with some money in the next few we will settle for 9,10,or 11,000 dollars,” again, whatever number they come up with. Well, obviously if you could buy something for 300 or 500.00 and turn around and sell it for 9, 10, or 11,000.00, wouldn’t that be a pretty decent profit margin? That is exactly how the debt collector operates. Yet, when the debt collector’s standard operation is in direct violation of the Fair Debt Collection Practices Act, collection of such outrageous fees in unattainable if the law is enforced.

When the debt collector lies to you, when he misrepresents who he is collecting for, he violates the Fair Debt Collection Practices Act. There are so many other things that the debt collector does that is in violation of this law. When he calls you multiple times a day, making your phone ring to the point of harassment, every single one of those calls could be in violation of the Fair Debt Collection Practices Act. When he calls you too early in the morning or too late at night, calls you at work when you have asked him not to, when he calls your friends and neighbors having him bring little notes to you, those could be violations of the Fair Debt Collection Practices Act. The debt collector becomes abusive on the phone. He starts off being nice but when you don’t pay they turn ugly: abusive language is a violation of the Fair Debt Collection Practices Act.

When the debt collector threatens you with something that he is not legally empowered to do: wage garnishment, taking your home, or getting you fired, etc. Well until he is legally empowered to do so he is in violation of the Fair Debt Collection Practices Act. When he threatens to put you in jail…rest assured he CANNOT do that. There are no debtor’s prisons in this country; it is not against the law to not pay your credit card debt. But a lot of times the debt collectors will threaten people with things of that sort because it is effective, it scares people.

That is not only in violation of the Fair Debt Collection Practices Act, it is against criminal law. It is a CRIME to threaten you with criminal prosecution for a civil offense in many states. There are so many other things that the debt collector does, and Debt Validation of America helps them along, they send out dispute letters, for instance, and when these collectors receive these requests for validation of the debt and they do not properly respond, those too are violations of the Fair Debt Collections Practices Act. When the debt collector continues to try and call you and collect from you AFTER getting the validation letters and not properly responding to the letters to validate you debt…those are additional violations of the Fair Debt Collection Practices Act.

Every single time the collector violates the law, it is worth a minimum of $1,000 plus attorney’s fees, plus the actual damages to the client…and that is just on the Federal level. There are corresponding state laws in most states, where the attorneys can sue the debt collector on the stat level as well. So, here is what Debt Validation of America does: document the things that the debt collector is not supposed to do, that he does. Now, obviously, you have to participate in this process. Fax any and all correspondence you receive from the debt collector. A violation file will be built that will then be turned over to your attorney that is a member of DVA’s network that is in your area that will file a federal lawsuit against the debt collector.

They will file a federal complaint, suing the debt collector in federal court and perhaps state court as well. When that happens, when they file the lawsuit in federal court, the tables have now been turned on the debt collector, now the collector is calling the attorney wanting to know how he can settle this. These debt collectors are highly motivated to get rid of these federal complaints. Now remember, he buys your debt for a few pennies on the dollar, he is going to collect lots of debt on lots of people. He is going to collect from as many people as he can for as cheaply as he can. Well, when your attorney has taken your case to federal court, they have sued him and all of a sudden your case becomes VERY EXPENSIVE and VERY COMPLEX. Plus, he cannot defend it, he has broken the law and he knows he has broken the law. So, he is calling your attorney, wanting to know how he can settle it.

You see, these federal complaints also negatively impact the debt collectors’ state licensing requirements and other aspects of their business, so he wants the complaint to go away. So he wants to know how he can settle it, in fact, normally at settlement occurs within 30‐60 days after filing the federal complaint. Well, when the debt collector calls DVA, wanting to know how it can be settled, they can settle it but here is how it is settled: 1. the client’s debt, your debt, is reduced to zero. 2. The client is marked “paid as agreed” to the credit bureau. 3. There are no tax consequences so there are no 1099‐MISC issued. 4. The attorneys will collect some money for damages from the debt collector based on the documents from the violations file. Typically, 4,000‐7,000 per account is collected; sometimes it is much more depending on what the creditor has done in violation of the law.

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