Debt cancellation is a game of chess. When you're the one being hunted by a debt collector it can be torture to avoid all the tricks and traps they set for you. Most debtors are easily checkmated. But if you can detach from the moment and look at your case from another perspective, you will see that you actually have a silver bullet chambered and ready to put an end to the madness.
It starts with knowing your opponent's weakness. Debt collection is a risky business. The money is made when the collector can persuade you to pay at least 50% of the total debt amount because typically a debt collector buys the debt from the creditor for much less than the total debt. Aside from the obvious resistance they can expect from someone who really doesn't want to pay, debt collectors run the ominous risk of buying an account of someone who really doesn't have to pay.
Every now and then a collector runs into the proverbial rabbit with a gun. This is a debtor smart enough to invoke the Best Evidence Rule to force a debt cancellation. According to Cornell Law School's Legal Information Institute website, the rule "applies when a party wants to admit as evidence the contents of a document at trial, but that the original document is not available." The rule is laid out at Federal Rules of Evidence 1002 (Requirement of Original). It states that "[a]n original writing, recording, or photograph is required in order to prove its content unless these rules or a federal statute provides otherwise."
So, while checkmating debtors involves backing them into a corner and persuading them to pay up or else; checkmating your debt collector involves requiring them to prove you legally owe the money in the first place. Even though your situation may not have become an actual lawsuit, often times just mentioning the rule will force a debt collector to question whether they could win a case against you.
They must have the original documents unless a debtor is willing to admit they owe the debt. Most debtors will stipulate they owe the debt because they have been checkmated psychologically already. They are ignorant of their right to ask if they even have to pay at all or if a robber's gun to your head is proof that you owe him all the money he's demanding from your wallet.
In the end, a house of cards falls with only a gust of wind. Here's a list of original documents that debt collectors are supposed to have in their possession but often they do not have them:
- Wet-ink, signed documentation that supports their claim per UCC § 3-401(a)(1)
- All account and general ledger statements or accounting reports related to compliance with Financial Accounting Standards 95 and 140 as to the disputed account
- All tax forms issued and filed with respect to the account (including 1099C and 1099OID)
- Validation of the debt collector’s right to collect the disputed debt in the form of certified copies of the original agreements governing the assignment, novation, or transfer of rights
- Proof the debt collector is the current owner, assignee, holder, or holder in due course of the account
- Certified copies of all relevant signed commercial instruments and/or contracts, and evidence of any exchange of a benefit or detriment, and/or the series of external acts giving the objective semblance of a valid contract
- If they claim to be the assignee debt collector for a particular creditor, proof of a valid business license and bond to engage in debt collection activity in your state
- Certification that the terms of § 326 of the U.S.A. Patriot Act have been complied with with respect to the verification of your identity of me as the card holder related to the account
Photocopies or printouts of billing statements or standard cardholder agreements do not satisfy the Best Evidence Rule (FRE 1002) which states that "[a]n original writing … is required in order to prove its content". If they cannot provide this evidence, there is automatically a debt cancellation. Therefore, the key to victory is knowing what documents to demand. You, the hunted, can become the hunter, and the hunt is no fun when the rabbit has the gun. Checkmate.
(To learn more about the best evidence rule, see Podcast Episode EV021.)
DISCLAIMER: This information is solely for private study purposes. It is not intended to replace or serve as legal or other professional advice. It is provided with the express understanding that we are not engaged in rendering legal or other professional service.