Do you have an outstanding debt that you simply do not have the funds to pay? Perhaps you feel your debt is an unfair one that you shouldn't have to pay. You may have even pled your case to the company holding the contract, only to be given a long run-around that only drove you up a wall. Not to fear! You are about to learn a tested technique that will drastically lower the money you owe, and may even get your name in the illustrious pages of the "uncollectible accounts" list by any collections agency that rings your phone! (And no, we're not talking about bankruptcy!)

In order for this technique to work well, your debt must be a reasonable amount. Lets use a gym membership at $2,000 for our example. Before your account is passed to a collections agency, you will usually always receive a series of phone calls demanding full payment from the gym itself. At this point, you must develop a reason why you feel the debt is an unfair one, and state this reason in the same, un-budging manner to the representatives that call you. Maybe you only went to the gym for a month, paid for the time spent in it, and then stopped going. It will drastically help your case if you send written petitions stating this same reason. At this stage, you must understand that the gym (or whatever business in after your wallet) will not care what your reason is, but you should expect this. You are only keeping your story the same to set yourself up for a better outcome in the future.

After a great deal of time, the business will deem you uncollectible by them and will likely auction off your account to a collections agency. Understand that this agency assessed your contract and purchased your account for a fraction of the amount you originally owed. You will no longer be hearing from the original company, as they took the money the agency paid and cut their losses. The agency will now attempt to make the money it spent on your account back by calling you and offering you a discounted "deal" if you act soon. When the calls come in, you have two options, you can accept the discounted deal and pay what they offer you, but this is not advised. Instead, you should remain strong and unyielding in your refusal to pay. Tell them the same story you told the original business, and you may even want to throw in that you lack any real meaningful assets that they can collect. If you really don't have any meaningful assets, this is a plus!

The key is to realize that the decision of whether to sue you is strictly a financial one. You probably wont be sued unless the amount you owe is much greater than the cost of suing you. Established businesses like gyms, credit card companies, resorts, or retail stores will not sue you "on principle" or to heal their wounded pride. If math and statistics show that no money is likely to come from you, they will eventually stop trying.

They will threaten to sue you, but first they will run an asset check and will likely never go through with it if they find they have nothing to collect. Bear in mind that, even if you have large assets, the agency will likely never bring you to court. This is because it costs so much money to sue someone (legal fees, opportunity cost of their time, etc.) that they would likely spend more in court than they would collect. You may even want to let them know that you are aware of this fact. This will accelerate the process of them giving up.

What will eventually happen is that one collections agency will deem you uncollectible and auction you off to another, who will attempt to settle for less, and so on and so forth. They will become more and more aggressive as you get passed down the ladder of agencies, but this is only a sign that your strategy is working. You can opt to accept a low offer whenever you feel comfortable, or continue to refuse and gamble that they will either stop calling you or lower the debt further. A friend of ours successfully got a $2,200 debt reduced to $240.00 - using these same tactics - after three collection agencies deemed his account uncollectible. It is a gamble to be sure, but it could be the difference of thousands of dollars in your pocket.

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