Why Look at Debt Settlement Over Bankruptcy - Debt Settlement Booklet

Information About
Financial Options
End Your Bill Problems

and Get Back the Good Credit You Deserve
1
Information About Financial Options - Attorney David Falvey
860-449-1510 www.CTDebtConsolidation.com
David Falvey, Esq.
About the Author

DAVE FALVEY OFFERS ALTERNATIVES TO
BANKRUPTCY AND HAS EXTENSIVE EXPERIENCE
WITH DEBT MANAGEMENT AND DEBT SETTLEMENT.
HE IS PASSIONATELY CONCERNED that consumers are being

scammed by television ads for debt settlement services by
companies that are not licensed nor bonded with the Connecticut
banking department. Dave has pioneered efforts at credit score
improvement for clients and has written extensively on this topic:
www.pennywatchers.com which is one of his websites. His
approach to bankruptcy differs from most attorneys because he
defines a fresh start as a good credit score and not just filing for
bankruptcy. Therefore, he has developed materials entitled, the
fast track to credit which he urges his clients to use after they
have filed for bankruptcy in order to obtain a passing FICO score
of 625 within 12-24 months. His materials consist of a 2 DVDs
where Dave gives a seminar on credit score improvement along
with his manuals.
Information About Financial Options - Attorney David Falvey 2

About the Author (Continued)
Dave Falvey has been given the designation as Super Lawyer for
consumers who have financial problems. The prestigious
magazine, New England Super Lawyers, has for two consecutive
years given him the honor of being a Super Lawyer. Their website
is: www.superlawyers.com
Selection as a Super Lawyer: Only 5% of the total lawyers in

Connecticut receive the designation as Super Lawyer. The vetting
process necessary to receive this recognition is extensive and no
payment is made or can be made to receive this designation. This
process involves peer evaluation, and screening as to compliance
with all ethical and professional standards of competence.
Dave has been a Board Certified Consumer Bankruptcy Attorney

for over 10 years with the American Board of Certification:
www.abcworld.org. He has represented over 5,500 clients in
bankruptcy. He files both Chapter 7s and Chapter 13s.
He has been in practice for 26 years and for 20 years has

concentrated his practice in consumer bankruptcy and bankruptcy
alternatives.
What it means to be Board Certified: to become certified as a

bankruptcy specialist by the American Board of Certification a
candidate has to meet or exceed rigorous certification standards
relating to experience, continuing legal education, integrity, and
peer review; in addition to demonstrating a sophisticated
understanding of the law in their specialty area.
3
To become certified as a bankruptcy specialist by the American

Board of Certification, an applicant must successfully complete a
comprehensive daylong written examination covering (1) general
bankruptcy/creditors rights law (2) legal ethics, and (3) substantive
questions in specialty areas. In addition, each applicant must show
significant experience in legal matters and a substantial dedication
of their practice to such matters , as well as providing professional
references and participating in at least 60 hours of continuing legal
education over a three-year period.
Presently, Dave is one of two attorneys in Connecticut who are

Board Certified in Consumer Bankruptcy. Dave is admitted to all
Connecticut Courts and all Federal Courts including the U.S.
Supreme Court. He has cases of significance which are In re
Sokolowski 227 B.R. 16, 205 F3d 532 ( Second Circuit Court of
Appeals), and In re Plouffe 157 B.R. 198.
Dave belongs and participates in organizations as follows:

Connecticut Bankruptcy Roundtable, the National Consumer Law
Center, the National Association of Consumer Bankruptcy
Attorneys, the National Association of Chapter 7 Trustees, the
National Association of Chapter 13 Trustees, the National
Association of Consumer Advocates, and the American Bankruptcy
Institute.
David F. Falvey
Seriously Outstanding
only 5% selected each year
visit superlawyers.com

He offers alternatives to bankruptcy and has extensive experience

with Debt Management and Debt Settlement.
He has pioneered efforts at credit score improvement for clients
and has written extensively on this topic: www.pennywatchers.org
which is one of his web sites.
Dave graduated from Providence College and Suffolk Law School.
David F. Falvey, Esq.

A Specialist in Consumer Bankruptcy
Board Certified in Consumer Bankruptcy
Super Attorney for Connecticut 2008-2011
Member of:
Connecticut Superior Court
Connecticut Supreme C court
U.S. Bankruptcy Court for Connecticut
U.S. Federal District Court for Connecticut
U.S. Federal Appellate Court for 2nd Circuit
U.S. Supreme Court
National Association of Consumer Bankruptcy Attorneys

National Association of Chapter 7 Trustees
National Association of Chapter 13 Trustees
American Bankruptcy Institute
Association of Independent Consumer Credit Counselors of America
Connecticut Bar Association
New London County Bar Association

Table of Contents
1. What Are Your Options? .................................. 7
2. Why Use Debt Management or

Debt Settlement? ............................................ 12
3. Formal Options For Dealing With

Your Debts . .................................................. 13
4. What Should You Do If You Are Sued

While You Are Making Your Payments
In a Debt Settlement Plan?. 17
5. How Do You Choose a

Debt Settlement Company? ...... 18
6. Scams and Con Artists! .. 24
7. Frequently Asked Questions . 32
6
What Are Your Options?
At AA Debt Settlement, we have one of the very few

professional approaches to helping you decide on what is
the best option for you.
First, we explore in-depth all the

options, and there are 5 options
consumers select when dealing
with debt ..

Option #1: Put Your Head in the Sand.
You pretend that the problem doesnt exist or that it will

just go away. You pretend that the lawsuits against you
are meaningless and nothing can happen to you. You
dont open your bills, and you ignore the problem. THIS
OPTION DOESNT WORK.
OPTION #2: Rob Peter to Pay Paul
This is by far the most popular approach. When you try to

have balance transfers, or paying one credit card with
another credit card, or obtaining second mortgages on
your home, or obtaining a 401K Loan to pay-off credit card
debt, these are all examples of robbing Peter to pay
Paul. And, indeed, this approach appears to work for a
while. But since you can borrow money indefinitely,
eventually the balloon expands so far and then it bursts. I
tell clients that Fortune 500 Companies cant borrow their
way out of debt and the greatest country in the world, the
USA, cant make this approach work. Whats amazing to
me is that people know that this approach cant work, but
they use it all the time. Its, also, part of Option #1. THIS
OPTION DOESNT WORK.
8
OPTION #3: BULLDOZER
This is where you work all the overtime you can

obtain and/or you get a second job. You are working
at least 12-18 hours per day, 7 days per week and
your debt load is still increasing. As Will Rogers
said, "Once you realize that you are in a hole, you
should stop digging". THIS OPTION DOESNT
WORK.
OPTION #4: INFORMAL STRATEGIES:
Any OPTION which does not involves the Court is

an informal strategy or an informal workout.
There are 2 MAJOR INFORMAL STRATEGIES:
9
#1: Debt Management a/k/a Credit Counseling.
Credit Counseling is actually a misnomer because there really
isnt any counseling regarding your credit or your credit score.
Debt Management is a 100% repayment on your credit card
debt.
This strategy compares to a Chapter 13 where you pay a 100%
dividend to unsecured creditors. There are great similarities
between Debt Management a/k/a Credit Counseling and a
Chapter 13 Plan.
The Debt Management/ Credit Counseling Companies were
created by the credit card industry and there has always been
the suspicion about them that they are really soft collection
agencies.
The largest Debt Management Company / Credit Counseling
Company is Consumer Credit Counseling which has been
purchased by Money Management International. They have
been accused of not offering independent and objective
counseling regarding your options in handling your debts.
However, I have found that some of the accusations are well
founded at times and at times the criticism is not well-founded.
I have found that Debt Management Companies have accused
bankruptcy attorneys of just throwing people into bankruptcy
and not urging them to take responsibility for their actions.
I have found that bankruptcy attorneys because of their training
are actually biased against Debt Management Companies and I
have found that Debt Management Companies because of their
orientation and culture are biased against bankruptcy attorneys.
I have found no one who helps the consumer objectively weigh
the pros and cons of debt management, debt settlement and
Chapter 7 and Chapter 13.
10
I have developed a unique chart which gives the pluses and minuses of
each approach. Also, I have developed a unique analysis which allows
you to compare all of the options. And I realize that when making a
decision or selecting an option, you need the experience and guidance
of an attorney who has actually participated in all of the options.
There are two major trade groups for Debt Management:

www.aiccca.org (The Association of Independent Consumer
Credit Counseling Agencies) and
www.nfcc.org. (National Foundation for Credit Counseling).
We have had clients use a Debt Management Plan wherein we

repaid the credit cards 100%, and we are doing Debt Settlement
Plans where we pay a portion of the total debt and negotiate with
creditors for settlements.
And I have for over 26 years guided clients in using Chapter 7 and
Chapter 13.
11
THESE OPTIONS CAN WORK BUT YOU NEED AN
ATTORNEY WHO HAS ACTIVELY PARTICIPATED IN
THESE OPTIONS TO GUIDE YOU.
An attorneys allegation is first to his/her clients best interest according to our
ethics. Therefore, your best analysis and guidance will come from an attorney
who has actively used all the options with his clients. Unfortunately, there are
very few, if any, attorneys who can tell you that they have done debt
management, debt settlement, Chapter 7 and Chapter 13 with any amount of
significance. There are two major trade groups for debt settlement and they
are www.tasc.org (The Association of Settlement Companies) and
www.usoba.org (United States Organization of Bankruptcy Alternatives)
Why use Debt Management or Debt Settlement?
Essentially, I have found at least 12 Basic Reasons why someone cant

or wont file for bankruptcy.
There are many reasons under the Bankruptcy Code why someone
cant file a Chapter 7 bankruptcy petition. But lets say that you qualify
for filing a bankruptcy petition, but you elect not to file.
After you have been informed of all the pluses and minuses of filing
bankruptcy or using debt management or debt settlement, you have to
make the final choice.
If you elect a non-bankruptcy option, then you should be assisted in a

non-bankruptcy option which is actually more involved than the filing of
what is called a Straight Chapter 7 Bankruptcy Petition.
Why is it more involved? The reason is that you dont have the
protection of the Automatic Stay of the Bankruptcy Court when dealing
with creditors and your financial affairs will take considerably longer than
90 days to settle.
12
Formal Options for Dealing With Your Debts
Chapter 7
If you have a ton of credit card debt, Chapter 7 is usually the best option, of
all the options for dealing with debt. A Voluntary Chapter 7 is one which you
voluntarily petition the court for relief from all of your debts. Its called a
Liquidation because all your debts are liquidated within 90 days and all
your assets are liquidated. However, and this is very important, since the
purpose of a Chapter 7 is to give you a fresh start, it makes no sense to
take away all of your possessions and sell them for the benefit of creditors.
Therefore, you have exemptions for your assets. You can exempt out
your assets from the liquidation process. And this is very important. Many
people think when they come to my office that in a Chapter 7 that they are
going to lose their home, car, pensions, furniture and cash.
I have explained to clients that they could see the Chapter 7 as loading
onto a conveyor belt that is carrying items into a furnace to be liquidated
that they load their debts onto the conveyor belt. They would have to load
their assets onto the conveyor belt but they have exemptions and those
exemptions allow us to take their assets off of the conveyor belt.
Therefore, they see just their debts being liquidated or canceled
(discharged).
However, having said the above, you have to confer with an attorney in
order to make certain that your assets are exempt. There are times when
assets are not exempt. Only an attorney experienced in this area should
help you.
13
The famous last words I hear from a client are: I have a simple case
and; therefore, how much are you going to charge me? I have found
that in cases, which one would think that they are simple, are lurking
the most complex issues imaginable in Bankruptcy.
I tell clients that it only takes one nuclear bomb to ruin your day and
lurking within the Bankruptcy Code is vast amount of landmines just
waiting for you. I blame this on the banking and credit card lobby,
which is constantly changing the Bankruptcy Code in order to screw
you, the consumer. Im not supposed to talk this way, namely, in such
a blatant disregard for euphemisms.
I have told clients that there are two classes of people in our society: the
screwor and the screwee. And were the screwees. We have to be very,
very vigilant and ready to take flight in a fraction of a second; otherwise, the
hyena credit card companies will devour us.
If you use a Chapter 7 option, you should be informed on how to restore

your credit score within 12-24 months post-bankruptcy.
I have an E-Learning website for this purpose called,

www.PennyWatchers.org and my clients can use this website and theres
no charge to them.
14
Chapter 13
A Chapter 13 is a re-organization of all your debts. It takes 3-5 years
and you dont get a discharge until the end when you have completed
your Chapter 13 Plan. Its more expensive than Chapter 7 because it
takes far more work and effort than a Chapter 7.
A Chapter 13 is used primarily to save a home from foreclosure. It can

be used to pay-off credit cards and re-pay not dischargeable taxes
usually with no interest running on the debt.
Theoretically, you could use a Chapter 13 to repay 1% of your credit
card debt and be out of debt. However, I have never seen this happen.
Usually, a person is paying at least 10% back of their credit card debt.
But again, this depends on your income and assets. Most of the time
the Chapter 13 Trustees Office is scrutinizing your budget and assets
to see if you can re-pay 100% on your credit card debt.
An experienced Bankruptcy Attorney can advise you of the odds of

you paying 100% on your credit card debt in a Chapter 13. If you have
to re-pay 100% of your credit card debt in a Chapter 13, then there
probably isnt a real advantage in using a Chapter 13.
Youd be better off using Debt Settlement where you re-pay 50% on
your debt. However, there are many contingencies that have to be
weighed besides the pluses and minuses graph which I have posted
on this website.
15
And if you elect to use Debt Settlement, you need the guidance of
an attorney who is very familiar with collection law in order to
protect your assets and wages from the creditors.
Chapter 13 is more powerful than a Chapter 7 because in Chapter

13, its possible to void second mortgages on your home if theres
insufficient equity for the second mortgage and you can reduce car
payments. You cant do this in Chapter 7.
If you are behind on your mortgage, Chapter 7 allows you to take

the arrearage and spread it out over a 5-year period but you have
to, also, continue to pay on your mortgage.
If you owed $10,000 in arrearage on your mortgage and your

mortgage payment was $800 per month, in Chapter 13, youd
continue to pay on the mortgage of $800 per month and on the
arrearage youd pay approx $166.00 per month for 5 years. (This is
a very over-simplified statement because I havent factored in
Trustee fees and attorneys fees.) Therefore, your total mortgage
payment would be $966.00 per month. If you could pay this
amount, youd successfully stop any foreclosure and the Court
would order that you be allowed to repay on your mortgage
arrearage. Thus, youd save your home from foreclosure.
16
What Should You Do If You Are Sued While You Are
Making Your Payments In A Debt Settlement Plan?
First, dont panic or hyperventilate. It wont help and its unnecessary.
Stay calm and keep it cool.
Next, review this handout and call my office for an appointment.
Heres what we are going to discuss:
Ill review the lawsuit with you. And I will help you determine what defenses
you have to the lawsuit.
Ill review with you strategies on protecting your checking accounts, savings
accounts and wages. Also, Ill review with you strategies on
protecting all your assets. Your assets can be substantially protected
from lawsuits by following my strategies. However, if you arent
extremely careful, your assets will definitely be exposed to the
judgment creditor. Its imperative that you make an appointment with
my office. Since you are a client, this will be a FREE
CONSULTATION so you dont have to worry about incurring costs
for a consultation, which ranges from $150$300. Again I repeat, this
will be a FREE CONSULTATION since you are a client.
Ill explain to you how you can do-it-yourself with a pro se appearance in the
Court or you could retain our law firm to protect you. Our Debt
Settlement Program doesnt include legal representation in a Court
of law and; therefore, there would be a separate retainer agreement
for this service and a separate legal fee.
WARNING!! Do not tell the creditor that you are going to see your lawyer.
Neither the creditor nor the creditors attorney will care or be
impressed. Every day of the week, they are being told that someone
is going to see their lawyer. And, when you tell them that you are
going to see an attorney, it only tips them off that they should act
faster against You.
Simply make an appointment with my office.
17
How Do You Choose A Debt Settlement Company?
Heres a checklist of questions to ask a Debt Settlement

Company:
Do they have an attorney who helps analyze all of your

options?
Many times Debt Negotiators will tout that they have Certified Debt
Negotiators and Certified Debt Consultants.
If they have Certified Debt Negotiators, they obtained this

designation by taking a simple one-hour quiz, which no one
can possibly fail. The quiz is administered by an organization
that you have never heard about and exists solely for the
purpose of pinning merit badges on anyone who applies. They
have no professionals actively supervising a debt settlement
program.
Some times theres a law firm that offers debt settlement but they
are usually out-of-state and to really have a law firm, which is
accountable to you, they MUST have a physical office in your
state.
18
Do they analyze clearly and simply all of your options
and fully disclose all the negatives and positives
of any option?
I have not found one website which analyzes and presents all the
positive aspects of all your Informal and Formal Options. I
have seen some websites, which present a debt calculator,
which supposedly compares your options.
But upon simply scrutiny, youll find that not all of the 4 Major
Options are presented. The 4 Major Options are: Debt
Management which is a 100% repayment on your credit card
debt; Debt Settlement which is a 50% repayment on all your
credit card debt; Debt Cancellation or Chapter 7 Bankruptcy
where you dont repay on your credit card debt; and A Formal
Debt Management Plan called a Chapter 13 Bankruptcy
Petition where you could pay a percentage of your credit card
debt. All 4 Options have to be presented!! AND THEY
DONT PRESENT THE 4 OPTIONS.
One of the reasons that they dont present all 4 MAJOR OPTIONS
is because they simply DO NOT UNDERSTAND THE DETAIL
WORKINGS OF THE 4 MAJOR OPTIONS. They havent
even been involved in the 4 Major Options, yet they are
pontificating based on false information (some would say
deliberate lies) and no experience.
Another point that should be made is that when they attempt to do

any type of financial analysis and present it to you in the form
of a chart, their analysis is usually flagrantly defective because
again they really dont know what they are doing. They guess
at the analysis and make it skewed in their favor.
If they are supposed to be certified debt counselors, shouldnt they

be able to substantially and accurately tell you what any option
will cost? They cant and this goes to the heart of the matter.
19
Are they BSI Accredited?
There are various companies who for a fee will come to your office
and check your business and determine whether or not you
have certain forms and procedures in place.
These certifying companies such as www.iso.org and British

Standards International (BSI) and there are others, do not pass
judgment on the accuracy of your counseling. They only pass
judgment on having in-place business procedures to process
business.
If these certifying agencies had real teeth, they could and would
suspend a companys license to practice their trade or
profession. This does not happen. However, a Debt Settlement
Company will tout their certification as if they have been
anointed into sainthood. Nothing could be further from the truth.
Does the Bar Grievance Committee regulate them?
Doctors are licensed by the Department of Health; CPAs are licensed by

the Department of Consumer Protection; Attorneys are licensed by
the Judicial Department and the attorneys are subject to random
audits and the Bar Grievance Committee. You can lose your license
to practice law when you violate the ethical obligations of your
profession.
As of October, 2010, Debt Settlement Companies now have to be licensed

by the Connecticut Department of Banking. There are no companies
other than mortgage companies licensed as Debt Settlement
Companies. The reason they are licensed is because they will pitch
the line that you can obtain a second mortgage on your house and
negotiate with your creditors. The problem here is that you are still
borrowing on the equity on your home which can be a far more
expensive alternative to filing a bankruptcy, keeping your home and
equity. But this wont be explained to you.
20
Is the Debt Settlement Company regulated by the State
Banking Department?
As of this writing, Debt Settlement Companies are regulated by the

Connecticut Department of Banking. However, not one of the
out-of-state debt settlement companies located in the sunshine
state or the sand states of Florida, Texas or California is
licensed here in Connecticut.
The Debt Settlement Companies have lobbied extensively against

the Uniform Debt Management Services Act. But due to the fact
that the Federal Trade Commission and the Attorney Generals
offices in every state are on the war-path against them, they
have to be licensed by the Connecticut Department of Banking.
In Connecticut, theres not one Out-of-State Debt Settlement

Company that is licensed by the Connecticut Department of
Banking!! Think about that! We have seen on Wall Street what
happens when the regulators are asleep at the switch and this
is a situation where there are regulators!
21
Does the Debt Settlement Company make proper disclosures?
And what are those disclosures:
You can be sued while you are enrolled in a Debt Settlement Plan. Yes,
creditors can still sue you and attach your wages, your banking
accounts and file judgment liens against your home.
Do they fully disclose that your credit score will be terrible during the
entire time you are trying to do debt settlement? Or do they couch it
in terms that it will adversely affect your credit. The ones which try
to have some semblance of honesty will tell you that debt settlement
will adversely affect your credit score. They dont say that your
credit score will absolutely terrible.
Some debt settlement companies will tell you that while you are enrolled
in Debt Settlement, interest will continue to accumulate on your debt
but many dont tell you this.
Some debt settlement companies will tell you that the cancellation of debt
can be considered income to you but I havent seen on any debt
settlement website IRS Publication 908 which explains in detail
about this issue. If the Debt Settlement Company doesnt have a
CPA on staff, and I dont know of any that do, they should advise you
to consult with a CPA before starting a debt settlement plan.
Does the Debt Settlement Company advise you as to their Completion

Rate?
Out of 100 clients, how many of them actually complete their debt settlement
plan? Do they discuss this issue with you? If they do honestly tell you their
completion rate which they should advise you since they are certified
under BSI or ISO, the completion rate is about 5 out of 100 clients
complete their Debt Settlement Plan. And why is the rate so low? They
arent properly screening and qualifying their clients and they dont explain
clearly and simply all of their options.
22
Does the Debt Settlement Company have a physical office,
which you can visit for a consultation?
In Connecticut, since there are no in-state licensed debt settlement

companies, they are all on the Internet or the telephone. And they
are located predominately in California, Texas and Florida. Why
dont they have a physical office where you can have a private and
confidential consultation?
The reason being is that debt settlement companies are the latest get
rich quick scam in the United States. They are fly by night
companies because they are here today and gone tomorrow.
Do they fully disclose who they are on their Web Site?
When you go to their website and pull-down the menu for Who we are?
does it fully identify who is the person in charge of the Debt
Settlement Service? Are the actual people who offer youre a debt
settlement service listed and shown on the website? Do they have
an actual address or just a Post Office Box and you cant determine
who is in charge of the offering the service? When you check on
www.whois.com to determine the owner of the website, do you get
an out-of-state company which has no meaning to you? Why are
they hiding? Who is the company president or the owner? What are
their professional credentials? And if they are an attorney (there are
some Debt Settlement Companies which are operated by attorneys)
but this isnt disclosed. Why? Why are they not disclosing that they
are attorneys who are operating the debt settlement company?
23
Scams and Con Artists
The Debt Settlement Business is the latest and hottest get rich scheme
in America.
Many people would rather try anything than file bankruptcy.

Embarrassment. People can feel embarrassed when they file for
bankruptcy and this embarrassment prevents them from exploring it as
an option. The ads read, Avoid Bankruptcy because it is portrayed as
walking the gangplank. Everyone will sneaker at you. Laugh at you. Youll
be publicly humiliated.
This is really not the case but peoples perceptions are very important
and this perception is there. They believe in their subconscious that if
they file for bankruptcy, they will be confronted by a masked and cloaked
man who will approach them while they are on the witness stand and
flinging his cape over his shoulder, and pointing directly into their face,
will scream, You filed for bankruptcy and you are bankrupt. How
pathetic!. And you will want to crawl under a rug.
24
Scams and Con Artists (Continued)
Nothing could be further from reality but people have visions or

nightmares of the above and this makes them want to avoid bankruptcy
and avoid even the discussion and comparison of it to other options.
And consequently, they see an ad on television and dial the toll-free

number and they are on their way to conning themselves. The slick
telemarketer has his/her script and follows through in the days after you
have contacted them and theres a good chance that you will go with
them. Its a numbers game. They know that out of 20 calls, theyll land at
least 5 fish.
Embarrassment is really the first approach to financial problems, which

is to ignore the problem and put your head in the sand.
Also, people fear bankruptcy. They think that they are going to lose their
home. They think that they will never be able to buy a home if they file
for bankruptcy. They are in denial and they just cant believe any
professional who tells them that most of time by filing bankruptcy, it will
speed up their opportunities to buying a home and/or restoring their
credit score.
And Im always amazed at the number of people who are afraid that if
they dont pay their debts that they will go to jail. Nothing could be
further from the truth. Debtors Prison was abolished approximately 200
years ago. Further, if people went to jail for not paying their debts in the
United States, more people would be in prison than would be outside of
prison.
25
I had one young lady contact me via Email and asked me questions
about her options. After several Emails, she wrote, Ok, Im ready to
accept the fact that Im a failure. Ill make an appointment. I immediately
wrote back to her and said, Yes, you are having financial problems. But
the fact that you are having financial problems doesnt make you a
failure. I referred her to my website, http://www.actionadvocacy.com and
referred her to the self-correcting quiz entitled, Famous People. More
specially, I referred to the little biographical sketches on Walt Disney who
filed once, Henry Ford whose company Ford Motors filed twice and
Milton Hershey, who filed 3 times.
At one time, no one mentioned the fact that someone died from
cancer. It was a mark of shame on the family. We still have to
make progress in their area of personal finances because filing
for bankruptcy is equated with being marked or branded as a
failure. Yes, your finances can be out of control and yes, you
could have been careless in handling your finances, or you just
had a run of bad fortune like Job in the Old Testament, but that
doesnt mean you are a failure. But the scammers and con artist
prey on their psychological weakness people have and the
harsh judgments they rendered against themselves. You have to
forgive your trespasses and forgive those you trespass against
you.
26
I have had people come to my office and tell me that the filing of
bankruptcy is against Gods word. Its sinful.
I have referred these people to Deuteronomy 15:1-2.
At the end of every seven years thou shalt make a release. And this
is the manner of the release: Every creditor that lendeth ought unto
his neighbour shall release it; he shall not exact it of his neighbour,
or of his brother; because it is called the LORD's release. Deut
15:1,2.
In the book of Leviticus Moses announces Gods decree that

special years be set aside for the forgiveness of debt, freeing of
slaves, and other measures re-balancing the social order. It was
never Gods intention to create a society where debt was a crime.
We see a society where loans were kept to a minimum by law, and
gratuity and charity, were kept to a maximum by law.
To accomplish this end, God did not outlaw borrowing and lending,
but instead He provided that loans would eventually become gifts,
and thereby limited loans only to those in need. He permitted the
loan to take place, and the obligation to repay to occur, but He
limited the legal obligation to repay to a maximum of only seven
years. Every seventh year all lenders were to release their debtors
from all of their debts. Every seventh year, the debtors were
discharged from all their loans and were no longer legally obligated
to repay them. The debtor was free of all loans by force of law.
Paying your debts is a matter of honor and respect for oneself. And
people can be knocked-out and not know it. Their mind is
unconscious. Their body wants to keep on fighting and never stop
fighting. Fighting for self-respect, dignity and honor. But it takes an
independent and professional referee to declare the fight over.
27
How Does The Debt Settlement Business Work As A
Scam?
They simply front-load all their fees at the beginning of a debt

settlement plan. Lets say that you have $15,000 work of credit card
debt. Heres the breakdown:
Debt Negotiation Fee=$2,250.00Debt Settlement=$7,500.00Total

Payment=$9,750.00 over 36 months =$270.83 per month. Now
heres how they make their money. They take their fee of $2,250.00
from all the initial payments you make of $270.83 per month.
Therefore, for the first 8 months, all the payments of $270.83 goes
to the debt settlement company as their non-refundable negotiation
fees. Your first 8 months of payments all go to the company itself
and nothing is paid to creditors.
And heres the next piece of vital information, only 5 cases in a 100
complete their Debt Settlement Plan. Most people drop out of the
Debt Settlement Plan after less than one year. So for one year, all
you did was pay a debt settlement company their fees!! Therefore,
all your payments represent pure income to them.
Who are the debt settlement companies? They are all out-of-state.
Theres no one that has a local office. They are located primarily in
California, Texas and Florida. You can only reach them by phone or
the Internet.
There is not one debt settlement company who is licensed and

bonded by the Connecticut Department of Banking as a Debt
Adjuster!!!!!!!
28
How Do You Guard Against These Scams?
You can guard against the scams by asking

questions as follows:
Are you licensed by any State of Connecticut Agency, more specifically the Department
of Banking? (If asked about this point, youll be told that they dont have to be licensed
by the Connecticut Banking Department because they are not debt adjusters.) Call the
Connecticut Banking Department at (800) 831-7225 or (860) 240-8299 and ask for the
consumer credit division and ask for the position of the Connecticut Department of
Banking regarding as to whether or not debt settlement companies should be licensed
by the Banking Department. Dont forget to go to their website: http://www.ct.gov/dob/.
Are you bonded by any State of Connecticut Agency, more specifically the Department
of Banking? If asked about this point, youll be told that they dont have to be bonded
by the Connecticut Banking Department because they are not debt adjusters.
Again, call the Connecticut Banking Department at (800) 831-7225 or (860) 240-8299
and ask for the consumer credit division and ask for the position of the Connecticut
Department of Banking regarding as to whether or not debt settlement companies
should post a bond in favor of the Banking Department. Dont forget to go to their
website: http://www.ct.gov/dob/.
Do you (the Debt Settlement Company) have a physical office I can go to and talk to a
real person and/or the person responsible for the debt settlement program? Fly-by-night
companies do not have a local and permanent office.
You should know that Attorneys are licensed to practice law by the Judicial Department
for the State of Connecticut. Attorneys are not licensed and bonded by the Department
of Banking but rather come under the jurisdiction of the Connecticut Judicial
Department. Attorneys can represent clients in debt management or debt settlement.
Again, call the Connecticut Banking Department at (800) 831-7225 or (860) 240-8299 in
order to verify this information.
29
How The Better Business Bureau Can Actually
Help Scam Artists!!
I have found that once someone gets a bad report from the Better
Business Bureau, the slick scam artists have a foolproof way
around a bad reputation.
They simply open another business under new business name, and
viola, they have a clean slate. And as soon as the complaints come
in against the new business, they simply repeat the cycle and open
another new company.
They only have Post Office Box addresses and you only reach
them by telephone. Many times when you trace where they really
exist, you find that they have a Post Office box in one state, and the
answering machine in that state which forwards calls to another
state.
This is a real sign that you are dealing with a scam artist. Also, they
have several companies with names, which are very similar.
One company will be the servicing company and another company

will be the marketing company, and so on.
They create shell business to make it extremely confusing to find

them and to know who are really dealing with.
30
REMEMBER TO ASK YOURSELF:
Do they have a physical office I can visit? Where

exactly is it?
AND FINALLY, if you are going to have a 3 to 5-year

relationship with a business, you owe it to yourself to
visit that office.
Call our office at 1-866-518-6409 immediately for a

Free and Confidential consultation where all the
options for handling debt will be explained in detail
and then make a decision. Our office is located at
500 Bridge Street, Groton, CT 06340.
31
CALL NOW 1-866-518-6409
FOR A FREE AND CONFIDENTIAL
CONSULTATION
Frequently Asked Questions (with Answers)
Will all of my creditors accept a Debt Settlement Plan?
Answer:
The vast majority of creditors are willing to accept a debt settlement.
However, we cant guarantee that ever creditor will accept a debt
settlement proposal. So far, we have never failed to have a creditor
accept a debt settlement proposal but some creditors who take an extra-
amount of time to convince to accept a debt settlement proposal.
And, of course, a creditor who has previously accepted a debt

settlement proposal could change their policy and take the position that
no debt settlement proposals will be accepted. Then you probably would
only have a bankruptcy option to consider.
Recently, 40 banks are considering offering debt forgiveness on credit

cards. They are experimenting with a pilot program of debt forgiveness,
which is a type of Chapter 7 Bankruptcy. Chapter 7 Bankruptcy has
been called, debt cancellation which is what some banks are
considering. But in the banks case, its a partial forgiveness of
approximately 40% of the debt outstanding. Therefore, you would make
payments on the remaining 60% of the debt. This would be called in
Chapter a 60% dividend to unsecured creditors plan.
32
What is the cost of a Debt Settlement Plan?
Answer:
Our fee can vary depending on the nature and complexity of your debts. For
example, you could have lawsuits pending against you before you come to
our office and your wages are attached and there are judgment liens against
your home. In our propriety software, when we analyze your options, we
calculate what our fee would be in conjunction with a total plan to resolve
your financial issues. Give us a call at (860) 405-1000 and well gladly
estimate all fees and costs and present them to you in writing.
Is my information confidential with AA Debt Settlement?
Answer:
Your information with us is totally and completely confidential because it is
guarded and protected by the attorney-client privilege. We contacted all of
your creditors and explain that you are not to be called and/or visited by the
credit counseling agencies. We do not sell, transfer or convey any of your
personal information because we are bound under the attorney-client
privilege to safeguard all of your confidences.
How long is the typical Debt Settlement Plan with AA Debt

Settlement?
Answer:
The length of time for a Debt Settlement Plan depends on your financial
resources. We have some clients who can pay in one lump-sum their
entire Debt Settlement Plan. And typically, we tell these clients it can take
68 months and even one year to satisfactorily settle all of your debts. But
most clients cant pay one lump-sum to settle all of their debts. They just
dont have the money.
Most clients have to use a payment plan to settle their debts. These
payment plans range from 25 years. The length of the Debt Settlement
Plan depends on the amount of your debt and your ability to make
monthly payments.
33
What happens to my credit during a Debt Settlement Plan?
Answer:
I tell clients that while you are doing debt settlement, your FICO credit
score will be poor. YOU WILL NOT HAVE A GOOD CREDIT RATING OR
SCORE. Many times people will have an artificially good FICO score
because they are current on all their bills but they are borrowing on their
credit cards to pay the bills.
Further, many clients are borrowing on one credit card to pay on the other
credit card and they have a FICO score of over 700. I call these credit
scores false scores because they are really artificially maintained. Or we
have clients who are paying on all their credit cards and they are simply
struggling. With these clients, its just a matter of time before they become
financially exhausted.
When a debt is settled, your credit report will often reflect settled for less
than full amount , paid not as agreed, etc. These reports will not help your
credit score but will reduce it. AADebt Settlement does not offer credit
counseling service. We dont help you with credit reports and/or credit
score.
After your Debt Settlement Plan is completed, we will give your our 2 hour
seminar on credit score improvement along with our materials to improve
your credit score and will advise you that it will take 12 years to obtain a
FICO score of 625 which is considered a passing score.
But you will have to follow a very strict program for budgeting and
monitoring your credit score.
We dont offer individual counseling for credit score improvement but rather
offer you a do-it-yourself approach.
34
What happens to my credit during a Debt Settlement Plan?
(Continued)
We have an E-Learning website, www.PennyWatchers.org which you can

have complete access and theres no additional fees or charges for the use
of this e-Learning website. But again, this is really a do-it-yourself program.
If you have a good credit score before entering our Debt Settlement
Program, you must realize that creditors wont offer you settlements unless
you are delinquent on your accounts. When you are delinquent on your
accounts, your credit score will drop or be reduced.
Its important, therefore, for you to understand the difference debt

management a/k/a credit counseling versus debt settlement. You can
see our matrix chart, which compares the pluses and minuses in order to
fully understand and appreciate these differences.
In debt management, a/k/a credit counseling, you might or might not get a
good credit score. Whereas, in debt settlement, you will only achieve a
poor credit score.
35
How is the AA Debt Settlement different than any other Debt
Settlement Company?
Answer:
AA Debt Settlement believes in explaining your options to you in a clear

and down to earth style. We help you weigh the pluses and minuses of
any and all options for settling your debt.
Therefore, we offer the most comprehensive and fair analysis and help
you select the best option for yourself.
We explain in detail and compare and contrast the 4 major options,

namely, debt management, debt settlement, Chapter 7 and Chapter
13.
Each one of these is a choice and when the choices are analyzed from
the perspective of monthly payments, length of time to complete the
option, total cost of each option, and affect on your credit score, and
numerous other factors, then you the consumer can make the most
informed decision. No one compares all of these options with only your
best interests to guide them.
As an attorney, I am obligated to explain the pros and cons of all the

options, analyze them in terms of monthly payments and total amounts
paid, and make a recommendation to you.
36
How is the AA Debt Settlement different than any other
Debt Settlement Company? (Continued)
Debt Management and Debt Settlement Companies will not begin to

discuss with in detail your bankruptcy option and compare it to what
they are offering you. Many, many consumers use a Debt Settlement
Company because they feel that if they file for bankruptcy they are a
failure and they are embarrassed.
Therefore, ironically, they will select the most expensive and impractical
alternative and they shy away from bankruptcy because they just dont
want to look at it.
On the other hand, there are consumers who just want to file for
bankruptcy and will not consider any other alternative even though they
dont qualify for bankruptcy.
We professionally and objectively weight and explain all the options and
present the reasons why someone should use debt settlement or debt
management and/or we explain all the issues and problems of filing for a
bankruptcy.
We view the informal or out of court options of Debt Settlement and

Debt Management as just as valid as the formal options of Chapter 7
and Chapter 13. To our knowledge, there is no one that dispassionately
weighs and compares all options and presents that analysis in a
comparison summary report.
37
What is the difference between Debt Settlement and Debt
Management?
Answer:
In a Debt Settlement Plan you pay 40% to 60% of your outstanding debt to
settle your debts.
In Debt Management, you pay 100% of your debt and you pay a reduced
interest charge on your debts.
There are pluses and minuses for Debt Management versus Debt
Settlement and you should see our matrix chart.
With Debt Management, you pay considerably more money to get out of
debt; whereas, with Debt Settlement you pay considerably less money and
its faster.
However, Debt Settlement is a rockier road to travel than Debt

Management. Again, you have to see our chart.
Sometimes, people obtain a debt consolidation loan to pay-off their debts

but really they just substitute a number of small debts into one large
monthly payment. This is an example of Robbing Peter to Pay Paul, which
really doesnt improve your finances.
38
What is a secured debt versus an unsecured debt?
Answer:
Since AA Debt Settlement only can deal with unsecured debts, clients ask me:
What is a secured debt and what is an unsecured debt. Secured debt is a car
loan or a mortgage on a home.
If you dont pay on the debt, the creditor can collect its money by selling your
car or home because the car or home is security for the debt; hence, it is
called a secured debt. On a secured loan, the creditor can, of course, try to
collect any money due and owing by attaching your wages, banking accounts,
etc.
Unsecured debts are credit cards, personal loans, medical bills, rent
payments or any debt, which doesnt have property as security for the debt.
The only remedy available for the creditor when you havent paid on an
unsecured debt is to collect the money due and owing from your wages,
and/or your bank accounts.
Only Chapters 7 and 13 of the Bankruptcy Code can deal with secured debt.
39
How can I be assured that your Debt Settlement Plan will work?
Answer:
The best assurance you have that our Debt Settlement Plan will work for you is
that I have been doing non-bankruptcy options for a considerable period of time
(10 years) that Im honored to tell you that people known that Im here to help
them the best financial advice for the consumer.
I have been recognized as a an Expert in Consumer Bankruptcy because I have

been Board Certified by the American Board of Certification and have worked
successfully in the past with clients using non-bankruptcy options in order to
solve financial problems.
So I would have to say that my reputation in the community is your assurance

that your Debt Settlement Plan will work for you.
For example, since I am not licensed to practice law in any other state except
Connecticut, I only offer my debt settlement plans to residents of Connecticut. I
have been in the community practicing law for 26 years and Im still standing
and I guess that is my claim to fame.
Do you offer any guarantees with your Debt

Settlement Plan?
Answer:
No one can really offer you a 100% guarantee that our Debt
Settlement Plan will work for you.
The most our law firm or any law firm can say is based upon past
experience, our Debt Settlement Plan should work for you.
40
What should I expect from a Debt Settlement Plan?
Answer:
You can expect to become debt free from credit cards for
considerably less money and time than you would in a Debt
Management Program where you pay 100% + % on your total
debt.
The savings are considerable with Debt Settlement versus Debt

Management. We will give you a comparative financial analysis
between Debt Settlement and Debt Management, which are your
informal options.
And we will, also, include a comparative financial analysis

between Chapter 7, Chapter 13 Bankruptcy and Debt Settlement
and Debt Management so you can see the cost and potential
savings.
41
Will all my debts be canceled once I finish my Debt
Settlement Plan?
Answer:
At the conclusion of your Debt Settlement Plan, all your debts you listed
with us will be canceled.
Sometimes it might take longer than we expected due to changing

policies with creditors and our attempts to obtain for you the best
possible settlements.
But there are no additional fees or costs if it does take longer to secure
good settlements.
Are all my debts included in a Debt Settlement Plan?
Answer:
You dont have to include all of your debts in a Debt Settlement Plan.
First, our Debt Settlement Plan only deals with credit debt and general
unsecured debt like personal loans, medical bills, etc.
Our Debt Settlement Plans dont deal with mortgage arrearage, car
payments and other secured debts.
42
Do I have to be approved for a Debt Settlement Plan?
Answer:
After we objectively and thoroughly explain your options in handling

debt, we have to jointly agree with you that a Debt Settlement Plan is
your best option.
First, we have to run the numbers and analyze what your monthly
payment will be in Debt Management versus Debt Settlement versus
Chapter 7 versus Chapter 13. We have not found one company, which
is capable of this financial analysis.
We have a special, proprietary program, which I have developed where

we can enter your income and expenses and then enter your total
amount of debt and can obtain a detailed computer analysis of all 4
major options and compare them. This involves analyzing your income
and expenses. Then we review the 12 Basic Reasons Why People
Either Cant or Wont File a Bankruptcy Petition.
We, also, have a matrix, which presents all the Pluses and Minuses of
each Option.
We will make a recommendation as to the best option for you and

explain the reasoning.
Our mission is to help you make a knowing and informed decision and
we guide you in making that decision but ultimately once you are fully
informed and the options objectively analyzed, you make the decision
whether to use Debt Management, Debt Settlement, Chapter 7
Bankruptcy or Chapter 13 Bankruptcy.
43
Do I have to be approved for a Debt Settlement Plan?
(Continued)
Many times clients want to use a Debt Settlement Plan because as no one
wants to go to the hospital, people do not want to file bankruptcy. But if we
determine that you really cant complete a debt settlement plan and that its
not in your best interest, we wont recommend it and will respectfully decline
to enroll you as a client.
Please note there are at least 5 basic reasons why people cant file
bankruptcy even when they want to file bankruptcy. We consult with clients
and help them weigh options and make certain that false information about
these options doesnt cloud their judgment.
We do a detailed Income and Expense Statement for you. We accurately

develop what is your exact income and what are your ordinary and
necessary expenses.
Once we have accurately developed your income and expenses, in many

cases we will do the long form Means Test analysis under Chapter 7
Bankruptcy to see if even though your income is over the medium income,
could you rebut the presumption of abuse in filing a Chapter 7 petition.
We have had clients come to our office from other attorneys who told them
that they couldnt file for bankruptcy and found that they did rebut the long
form of the Chapter 7 Means Test and consequently, they filed a Chapter 7
bankruptcy petition through our office.
44
Do my debts have to be delinquent in order to do Debt
Settlement?
Answer:
Many clients with whom we start working do not have delinquent
accounts. However, before creditors will offer settlement deals, you have
to be delinquent on your accounts. Heres where the analysis of your
income and expenses becomes critical in deciding whether or not you
really can continue to pay on your accounts.
If your income is exceptionally strong and either you cant or wont use a
bankruptcy option, then we recommend that you use Debt Management
a/k/a Credit Counseling and will usually refer you to Consumer Credit
Counseling Services (CCCS) or Money Management International
because they are licensed and bonded with the State Banking
Department. In this option, you pay 100% of your debt and you do not
become delinquent with your payments.
They will reduce your interest charges and usually they have a 5 year plan
for you to pay-off all your debts. Without the reduced interest rates which
they can obtain, you usually will have to take 10–15 years to pay-
off your debts with the same monthly payments which will be in your debt
management /credit counseling plan. (Note that they dont do any credit
counseling but they are referred to as credit counselors, which is really a
misnomer.
They are debt managers and not credit counselors because they dont
advise you under the Federal Credit Organization Act (CROA). We do
inform you that Debt Management Companies such as CCCS/ Money
Management International were established by the credit card industry
and; therefore, they tend to have a bias toward only offering debt
management and really dont analyze and evaluate the legal options of
bankruptcy.
45
Do my debts have to be delinquent in order to do Debt
Settlement? (Continued)
Answer:
However, they will argue and rightfully so, that they arent attorneys and cant
practice law which is correct. Many times if someone isnt a suitable candidate
for debt management, they so inform the potential client but really they cant
function in the full capacity of a debt and credit counselor because either they
dont have the background and/or they arent licensed to practice law. AA Debt
Settlement has extensive experience with debt management and will fully and
impartially weigh that option with you. And, indeed, if CCCSs program is best
for you, we will refer you to them.
But, to answer the question, Do I have to be delinquent on my accounts in

order to use Debt Settlement? the answer is Yes because unless you are
delinquent on your accounts, the creditors will not agree to any settlement.
And why should they? If you arent delinquent there will be motivation on the
part of the credit card company or the creditor to negotiate a settlement. And
now this is one of the negatives of Debt Settlement, namely, if you have a
good credit score and if you have to go delinquent on your credit cards
because your Overtime has expired and/or you are tired and run-down from
your second job, your credit score will suffer.
46
Can I try using Debt Settlement and if it doesnt work, can I
convert my file to a bankruptcy filing?
Answer:
Yes, we have many cases where a person cant under the Means Test or
under the Totality of the Circumstances Test or under the Asset Test, file a
Chapter 7 petition. But then events in peoples lives change. They become
sick, unemployed, divorced, separated etc. And they then can qualify for a
Chapter 7. I tell clients that in their weakness is their strength and in their
strength their weakness.
In the Bankruptcy Court, you can file a Chapter 13, which is a Debt
Reorganization, and then convert to a Chapter 7, which is a Debt Liquidation.
The same is true with an informal or out-of-court Debt Settlement Plan. You
can convert it to a formal bankruptcy. And we have clients who are in a grey
area of what option is best for them.
Some clients, the numbers are so definite, theres only one answer for them.
But there are many clients who are in a gray area and there is no obvious,
and absolute answer. And if the client makes a completely informed decision
to use Debt Settlement, and then they really get to try it on and after awhile
it becomes too burdensome, they are free to convert to a formal debt
cancellation program.
And I have had many client tell me, You told me that you didnt think I would
be a happy camper in debt settlement and you were right. But it was good
that I got to try it. This applies to people who to me are in the grey area
regarding their options.
47
Can I simply do debt settlement by myself without the help
of anyone?
Answer:
Yes, you can be your own attorney and do debt settlement and you dont
have to use an attorney-at-law. You can represent yourself and youll be
pro se or for yourself.
But when you receive a settlement from a company, I have seen where 5
years later, another bill collector representing the same creditor starts
trying to collect on the same debt. And they report to the credit bureau that
you still owe on this debt!! Now what are you going to do?
And lets suppose its one of those debt scavengers who purchased debt,
which has been discharged in bankruptcy, and/or debt, which has been
settled. (And these companies are ferocious!) (You could ask me, How
can anyone purchase debt that was discharged in bankruptcy? And
expect to collect on it! And can anyone attempt to collect on a settled
debt?! Yes, they can!
And what about the tax ramifications of settling debt? Many tax preparers
believe that debt, which is settled or compromised, represents imputed
income to you and you have to pay taxes on the discharged or settled
debt.
Yes, you can represent yourself but as Abe Lincoln said, A lawyer who
represents himself, has a fool for a client.
48
Will interest charges, and late fees accumulate on my
credit cards while Im doing Debt Settlement?
Answer:
Once you are enrolled in a Debt Settlement Plan (DSP), creditors
continue to increase your interest rates, charge you late fees, yearly fees,
and anything else they can concoct.
Does AA Debt Settlement contact all of my creditors?
Answer:
Once you are enrolled in our Debt Settlement Program, as I indicated
above, I will send a letter to all your creditors and advise them that I
represent you and to direct all their calls to my office. By law, once an
attorney informs a creditor that you are represented by that attorney, the
creditors cant call you. They can continue to send you mail but they cant
call you. Theres a high compliance rate with the Federal Debt Collection
Practices Act because they have been sued so many times, that they have
finally gotten the message.
49
When I am doing a Debt Settlement Plan, will creditors
continue to harass me?
Answer:
Creditors and bill collectors seem to be constitutionally disposed to
violating the law. When you enroll in our Debt Settlement program, we send
letters to all your creditors directing that all your bills be forwarded to our
office. It will take a little time, but we are able to stop the harassing phone
calls.
Further, when you are enrolled in our Debt Settlement Plan, were going to
give you my booklet entitled, A Consumer Combat Manual for Handling
Harassing Phone Calls. I tell my clients to simply read it and use it. And do
you want to know a secret? You simply write them a letter return-receipt
requested telling them not to call you and if they call you that violated the
law. My booklet has all this and more.
Further, under the law, once an attorney represents you, no one can call
you about your financial matters. All your calls come to my office after you
tell them simply, Call my lawyer. I have far more strategies than I can
discuss on my website but in a private consultation, Ill make you aware on
how to enforce the law against harassing phone calls by bringing a law suit
under the Federal Debt Collection Practices Act or under Connecticuts law
which prohibits harassing phone calls and possibly be compensated for the
harassing phone calls.
It is our experience that by using my booklet and the procedures where we

direct all your bills to be delivered to our office, your harassing phone calls
go away. But that doesnt prevent the creditors and/or the bills collectors
who have purchased your debt from bringing law suits. You simply bring
those law suits to our office and well review them with you.
50
I understand and have heard that Debt Settlement Companies
have a bad reputation. How do I guard against scam artists and
fraud?
Answer:
On television there are constant ads for debt settlement companies. First, all of
those ads are from companies in California, Texas and Florida. They have
websites and toll free numbers. And they promise you the sun, the moon and
the stars. And as a rule, if something sounds too good to be true, it usually is.
Here are the basic questions to ask:
Do they have a local office that you can go to and talk to a person?
They dont have any local offices.
Are they licensed and bonded by the Connecticut Banking Department or the
Connecticut Judicial System?
You can checked out if they are licensed by the Connecticut Banking
Department by going to: http://www.ct.gov/dob. Then click-on Verify a
License. Next click on Debt Adjuster. Youll find all the licensed and
bonded Debt Adjusters on this website. They will tell you that they arent
debt adjusters and; therefore, they dont have to be licensed and bonded
with the banking department. Call the Banking Departments toll free
number (800) 831-7225 and ask to speak to the Consumer Credit
Department and ask the staff person if the company should be licensed
and bonded by the banking department. The Debt Settlement Companies
will tell you that they arent Debt Adjusters but rather are Debt Settlers
and dont have to be licensed and bonded by the Banking Department
BEWARE!!!
Do an Internet Search and using Google or Yahoo, enter the companys name
followed by the word Fraud or Scam and see what you find.
Go to the Internet to www.ripoffreport.com and do a search on the companys
name.
51
I understand and have heard that Debt Settlement Companies
have a bad reputation. How do I guard against scam artists and
fraud? (Continued)
Do an Internet Search and using Google or Yahoo, enter the companys name
followed by the word Fraud or Scam and see what you find.
Go to the Internet to www.ripoffreport.com and do a search on the companys
name.
Go to the Internet and type in Debt Settlement Fraud in Google and Yahoo
and see what you find.
Go the Federal Trade Commission website and search about Debt Settlement
Companies: www.ftc.gov.
Ask the Debt Settlement Company for the list of names of people in
Connecticut they are servicing and ask for their telephone numbers for
references.
They have slick websites but usually do not have names of anyone
responsible for the website. See if you can find a name and picture of the
person responsible for offering the debt settlement services.
52
I have had many, many horror stores from clients who finally
discovered us and came to my office after they had been ripped-
off by out-of-state debt settlement companies.
Now you should ask: What about yourself, Dave Falvey and AA
Debt Settlement? What are your references? Are you licensed and
bonded by the Banking Department?
My answer: Attorneys dont have to be licensed and bonded by the

Banking Department because we are licensed by the Judicial
Department and the way to check on myself as being in good
standing with the Connecticut Judicial Department is as follows:
Im Dave Falvey, One Crouch Street

Groton, CT 06340; Tele (860) 405-1000
I have been attorney with the State of
Connecticut for 29 years.
My State Juris Number is: 101894; and

my Federal Juris Number is: ct08516.
I am in good standing with the Bar
Grievance Committee.
You can contact them at:

www.jud.ct.gov/SGC/ ; Statewide
Grievance Committee, 287 Main St.,
Second Floor, Suite Two, East Hartford,
CT 06118-1885; (860) 568-5157;
Fax (860) 568-4953.
53
Why is AA Debt Settlement different with any other Debt
Settlement Company? What about my credit score?
Answer:
I know of no attorney who regularly weighs all basic options of handling

your debt other than us. I know of no debt settlement or debt
management company, which even has the understanding to
analyze and explain the different options.
Notwithstanding their lack of understanding, they actually cant explain

and contrast the informal options with the formal options because
they arent attorneys.
At AADebtSettlement, we constantly guard against making any

judgments as to what is the best route or option a client should
take until we have completed the following:
The client is explained the pros and cons of all the basic debt option
strategies of debt management, a/k/a credit counseling; debt
settlement or debt negotiation; Chapter 7 Bankruptcy and Chapter
13 Bankruptcy.
54
Why is AA Debt Settlement different with any other Debt
Settlement Company? What about my credit score?
(Continued)
The client has to understand the 10 Basic Reasons why someone cant or wont
file a bankruptcy petition.
The client has to have their individual circumstances evaluated for doing using
one of the basic 4 options. They have to have their income and expenses
evaluated.. Some times they have to have their income evaluated in the
Means Test when they are over the medium income for bankruptcy. And then
the client has to receive a print-out to compare the financial aspects of debt
management, debt settlement, Chapter 7 and Chapter 13. AADebtSettlement
has developed a unique and proprietary program for financially comparing
and contrasting all 4 basic options. Frankly, there is no one to my knowledge
who can give you this type of analysis. Im able to give you this type of
analysis because I have represented clients in debt management, debt
settlement, Chapter 7 and Chapter 13. And I took all my understanding and
with a programmer, developed an amazing and proprietary system for
instantly comparing and contrasting all the financial aspects of the 4 Major
Options.
Once the client is fully informed about the options and their finances analyzed,
then in consultation with the client, an Action Plan is agreed upon.
55
Why is AA Debt Settlement different with any other
Debt Settlement Company? What about my credit
score? (Continued)
I see our professional responsibilities as helping a client understand their

options. Dispelling myths and propaganda of the credit card industry
and other organizations. Assisting the client in making the most
informed choice or decision in dealing with their debts and credit
scores.
Finally, as I have indicated in other questions, we have extensive

educational materials to assist our clients in obtaining a good credit
score. I have defined as fresh financial start as not just canceling
debt. I define a fresh financial start as a good credit score.
I have worked with many individual clients to help them improve their credit
scores. And from those experiments, and my reading of the Federal
Fair Credit Reporting Act, and other readings and investigations, I
have an extensive 2 hour seminar on DVD on how to improve your
credit score within 1224 months. Further, I have an e-Learning
website to assist my clients and you can find it at
www.PennyWatchers.org.
Im Dave Falvey, One Crouch Street, Groton, CT 06340; Tele (860) 405-
1000 and I have been attorney with the State of Connecticut for 26
years. My State Juris Number is: 101894; and my Federal Juris
number is : ct08516. I am in good standing with the Bar Grievance
Committee. You can contact them at: www.jud.ct.gov/SGC/;
Statewide Grievance Committee, 287 Main St., Second Floor, Suite
Two, East Hartford, CT 06118-1885; (860) 568-5157; Fax (860) 568-
4953.
56
What is Chapter 7 bankruptcy and what is Chapter 13
bankruptcy?
Answer:
A Chapter 7 Bankruptcy is called a liquidation and, therefore, many

people think that they are going to be liquidated. A Chapter 7 takes 90 days
from the date of filing to the date of discharge. After 90 days, you receive a
Notice of Discharge.
In a Chapter 7, you make no payments to creditors. All your debts are

liquidated or discharged; however, there are debts which cant be
discharged in bankruptcy some of which are: student loans, child support,
alimony, sales taxes, employee withholding taxes, fines, orders for
restitutions, willful and malicious injury to another person, crimes, injury
caused to another due to alcohol or drugs are some of the major non-
dischargeable debts in Chapter 7.
Some of the debts which are dischargeable in Chapter 7 are: credit card
debts, car loans, repossessions, personal loans, medical bills, mortgages,
deficiency judgments, personal income taxes if they meet 3 criteria, utilities,
and back rent, to name a few.
Chapter 7 is the fastest and least expensive option of getting rid of your
debt. And with good exemption planning, you usually can keep your home,
car and other assets. Pensions are not considered an asset of the
bankruptcy estate and; therefore, they are protected from creditors.
57
What is Chapter 7 bankruptcy and what is Chapter 13
bankruptcy? (Continued)
Answer:
A Chapter 13 is called a Debt Reorganization and you will see many

similarities between debt management and debt settlement with a Chapter
13. But a Chapter 13 has more powers than any informal debt management
strategy.
Chapter 13 can deal with mortgages and car loans. Chapter 13 takes
3–5 years to complete and every month you make payments to a
Chapter 13 Trustee. You dont receive a Notice of Discharge until you
complete your Chapter 13 which is usually 3–5 years.
Usually, you use a Chapter 13 when you are seriously behind on your
mortgage payments or your house is in foreclosure. But Chapter 13 can be
used just to repay on credit card debt.
I advise clients that usually, Chapter 7 is the best option for obtaining a
fresh financial start because its quicker and less expensive as compared
to a Chapter 13, debt management or debt settlement. But again this is just
a general rule and one rule doesnt fit all clients.
58
What are the pluses and minuses of Debt Settlement vs.
Bankruptcy?
Answer:
You will find on our website a matrix chart which gives the pluses and minuses for
all informal and formal options in handling your debt. Informal options are ones
where you dont go to Court. Informal options are debt management and debt
settlement. Formal options are when you go to Court and they include Chapter 7
and Chapter 13 Bankruptcy.
You should go to our Matrix Chart Section, which compares options and read it.
Also, its very important to read our chart on the 12 Reasons You Cant File for
Bankruptcy.
Essentially, I tell clients that usually Chapter 7 is the best option in dealing with
debt. And I dont say that because Im a bankruptcy attorney. I have had extensive
experience in operating a non-profit debt management company or a 501 ( c) (3)
corporation for many years. I have intimately dealt with clients credit reports and
credit scores both with Chapter 7, Chapter 13, debt management and debt
settlement. And I want to report to you that the reason the credit card industry
spent millions of dollars to enact the latest bankruptcy law (called: BAPCPA-
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) is because
they wanted to deny you a quick fresh start in Chapter 7.
To some degree, the credit card industry was successful in preventing people
from filing a Chapter 7 and forcing them into a formal debt settlement plan or
debt management plan called a Chapter 13 Bankruptcy petition. Now granted,
the creditors havent had all the success that they wanted in preventing people
from filing a Chapter 7 bankruptcy (in Chapter 7, you dont make any repayments
on debts) , but they have prevented some people from filing a Chapter 7 petitions.
Indeed, some critics of BAPCPA take the position that the credit card companies
ultimately failed in their attempt to turn the Bankruptcy Court into their private
collection agency. However, they have driven-up the cost of filing bankruptcy with
all the new requirements. But there is a percentage of people who cant file
Chapter 7 under BAPCPA and have to seek other options or avenues, namely,
debt management, debt settlement or Chapter 13.
59
Why cant the Better Business Bureau stop scam artists from
using their name? And what you should know.
Answer:
First, let me say the goals and purposes of the Better Business Bureau are
absolutely worthwhile. They want to protect the public by having businesses
subscribed to a code of ethics and want to report businesses that do not
follow a code of ethics. Theres no argument to me that they efforts are very
worthwhile.
But I have discovered how some slick scam artists use the Better Business
Bureau to further their scams. How? Lets say that the scam artist starts with
XYZ Debt Settlement Company and advertises that they subscribe to the
ethics of the Better Business Bureau. After awhile, they get many bad marks
or reports about XYX Debt Settlement Company.
The scam artist realizes they have many legitimate bad marks against the
company so what do they do? They open another company called the ABC
Debt Settlement Company and register the new company with the Better
Business Bureau and since they are a new company, they wont have any
bad marks against them.
Therefore, one important factor to look for is how long has the business
been in operation!!
I have had so many clients tell me, And I checked them out on the Better
Business Bureau and they didnt have any bad marks against them. The
scam artists are slick!!
60
Why cant the Better Business Bureau stop scam artists from
using their name? And what you should know. (Continued)
And as I told you above, if you ask the Debt Settlement Company if they are
licensed with the Connecticut Banking Department or any department or
branch of government, they will piously tell you that they dont have to be
licensed nor bonded. They will tell you that they arent DEBT ADJUSTERS!
And, I say, if they arent adjusting debts and they are telling you they are
getting creditors to settle their claims for $.50 on the dollar, what are they
doing?
I call this Debt Adjustment. But they will tell you that since they dont hold
your funds in a trust account, they arent Debt Adjusters. This is the
technicality they use to try to circumvent the law. However, theres a major
proposal called,
The Uniform Debt-Management Services Act as drafted by the National

Conference of Commissioners on Uniform State Laws
(WWW.NCCUSL.ORG), which is designed to close this loophole and you
should ask the debt settlement company what is their position regarding this
proposed law that they are lobbying and spending big money to defeat.
By knowing of this law, you can be well versed and understand what is
happening in the world of debt settlement. I have posted this law on our
website so if you take the time to read it, youll be a highly informed
consumer and will be able to ask very good questions.
61
62

Why Look at Debt Settlement Over Bankruptcy - Debt Settlement Booklet

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Why Look at Debt Settlement Over Bankruptcy - Debt Settlement Booklet

Uploaded by

Copyright:

Available Formats

Information About

End Your Bill Problems

About the Author

HE IS PASSIONATELY CONCERNED that consumers are being

Information About Financial Options - Attorney David Falvey 2

Selection as a Super Lawyer: Only 5% of the total lawyers in

Dave has been a Board Certified Consumer Bankruptcy Attorney

He has been in practice for 26 years and for 20 years has

What it means to be Board Certified: to become certified as a

To become certified as a bankruptcy specialist by the American

Presently, Dave is one of two attorneys in Connecticut who are

Dave belongs and participates in organizations as follows:

Information About Financial Options - Attorney David Falvey 4

He offers alternatives to bankruptcy and has extensive experience

David F. Falvey, Esq.

National Association of Consumer Bankruptcy Attorneys

Information About Financial Options - Attorney David Falvey 5

2. Why Use Debt Management or

3. Formal Options For Dealing With

4. What Should You Do If You Are Sued

5. How Do You Choose a

6. Scams and Con Artists! .. 24

7. Frequently Asked Questions . 32

At AA Debt Settlement, we have one of the very few

First, we explore in-depth all the

Information About Financial Options - Attorney David Falvey 7

You pretend that the problem doesnt exist or that it will

OPTION #2: Rob Peter to Pay Paul

This is by far the most popular approach. When you try to

This is where you work all the overtime you can

OPTION #4: INFORMAL STRATEGIES:

Any OPTION which does not involves the Court is

There are 2 MAJOR INFORMAL STRATEGIES:

There are two major trade groups for Debt Management:

We have had clients use a Debt Management Plan wherein we

Why use Debt Management or Debt Settlement?

Essentially, I have found at least 12 Basic Reasons why someone cant

If you elect a non-bankruptcy option, then you should be assisted in a

If you use a Chapter 7 option, you should be informed on how to restore

I have an E-Learning website for this purpose called,

A Chapter 13 is used primarily to save a home from foreclosure. It can

An experienced Bankruptcy Attorney can advise you of the odds of

Chapter 13 is more powerful than a Chapter 7 because in Chapter

If you are behind on your mortgage, Chapter 7 allows you to take

If you owed $10,000 in arrearage on your mortgage and your

Next, review this handout and call my office for an appointment.

Heres what we are going to discuss:

Heres a checklist of questions to ask a Debt Settlement

Do they have an attorney who helps analyze all of your

If they have Certified Debt Negotiators, they obtained this

Another point that should be made is that when they attempt to do

If they are supposed to be certified debt counselors, shouldnt they

These certifying companies such as www.iso.org and British

Does the Bar Grievance Committee regulate them?

Doctors are licensed by the Department of Health; CPAs are licensed by

As of October, 2010, Debt Settlement Companies now have to be licensed

As of this writing, Debt Settlement Companies are regulated by the

The Debt Settlement Companies have lobbied extensively against

In Connecticut, theres not one Out-of-State Debt Settlement

And what are those disclosures:

Does the Debt Settlement Company advise you as to their Completion

In Connecticut, since there are no in-state licensed debt settlement

Do they fully disclose who they are on their Web Site?