Damon Day & Associates » Damon Day

President of New Era Debt Solutions Attacks Me, It’s Just Par for the Course

Damon Day — Thu, 15 Apr 2010 11:49:23 +0000

Dan Smith and New Era Debt Solutions Pals (Photo from Hollywood Weekly)

I am now proud to announce that I have just seen the second official “we hate Damon Day review”. Ironically I believe the second review was also written by Dan Smith – President of New Era Debt Solutions. (pictured above on the left, in a photo spread for Hollywood Weekly) Mr. Smith also holds the dubious honor of writing the first review I believe. Of course I don’t know for sure because whoever is writing these reviews is afraid to stand up and claim ownership of them.

This Latest review claims to be a consumer warning and is supposedly issued by “Consumer advocates, business owners, TASC members and debt professionals.”

Wow, is this a group effort? It sounds like a whole bunch of people are really concerned about what I am sharing with consumers. I would love to know who all of these consumer advocates and debt professionals are. Maybe Dan Smith will enlighten me in the comments section below.

The reality is that this review was likely written by Dan Smith or someone else over at New Era Debt Solutions that is unhappy that I exposed them for deceiving consumers, at least in my humble opinion. I guess if we have learned anything from politicians, it would be that when you can’t articulate a coherent argument on the substance of an issue, you can only resort to personal attacks.

This website first appeared back in February. Ironically, the very same day that Dan Smith threatened to write a review about me if I didn’t “correct” the review I did about his company, New Era Debt Solutions. If you haven’t read it yet, it is a good read. If you have about an hour to kill, you should look at all of the comments from Dan Smith as well.

When I first saw this attack I wrote about it on my blog in an article titled Debt Settlement Company Attacks Me for Exposing Their Deception. I was pretty sure that Dan Smith was behind it, but of course he never admitted it. A few days after I wrote the article about the first attack, it mysteriously disappeared from the net. I assumed that Dan realized that by attacking me he was actually drawing more attention to my review of his company and decided it wasn’t a good move.

I figured that would be the end of it, but today I went back to his website and found the “we hate Damon Day review part 2.

This review site lists 12 FACTS about me as “they” see them. Who are “they”?

Supposed Fact 1. DD&A is a company run out of Damon Day’s home instead of a legitimate commercial location. Their web site gives the impression of a legitimate company. This company does not qualify for membership in TASC. As such DD&A goes to extraordinary efforts on their web site to slander the good name of TASC and TASC members.

My response: I am very open with my clients about the fact that I work from home, so there is no revelation there. “Legitimate commercial location?” What does that even mean? I am a consultant, is there something wrong with consulting with consumers from a home office?

TASC’s good name? Seriously? TASC is nothing but a trade organization that lobbies on behalf of debt settlement companies. TASC masquerades as a consumer protection organization which is laughable at best. As much as Dan Smith claims that I am, I am not a debt settlement company, therefore even if I thought TASC was actually a good thing for consumers, I certainly would not be a member, nor pay dues to an association who’s main function is to lobby for debt settlement companies. Please do a search for TASC on my website and you will get an idea of what TASC actually does. What I do is go to extraordinary efforts to inform consumers to not be lulled into thinking that TASC is an organization that is looking out for consumers. It is an association of Settlement Companies, looking out for the best interests of its own member companies. My question for Dan Smith is what does he actually get for the $10,000 dollars per month that he likely pays TASC in monthly dues? What do they do for you to justify that kind of expense?

TASC Update 4/15/10 – I was over at GetOutOfDebt.org today, where I often go for great information on what is going on in the “debt help” industry, and I came across a post by Steve Rhode that I found very enlightening for consumers. It appears that TASC is busy trying to figure out ways to get around the FTC’s proposed advance fee ban.

So let me ask you Dan, is this what you are supporting when you pay thousands of dollars a month to TASC? The presentation suggests that debt settlement companies should locate their operations offshore to avoid these laws and then they will be able to continue to charge huge upfront fees to consumers.

The presentation suggests that TASC member programs can set up their operations similarly to online gambling sites offshore. Wow, this just screams consumer protection to me. Don’t you agree Dan? Aren’t you proud to be a member?

Please read the post TASC explores option of members going offshore so they can avoid FTC regulation

Dan is this the organization that you are using to show that I must not be legitimate because I don’t belong to it? From my side of the fence, I would say you might want to rethink sending all that money every month over to TASC because this is the kind of stuff that you are funding. Is that what New Era Stands for? Do you support TASC’s suggestions of moving operations offshore and not using traditional phone lines so settlement companies can get around proposed FTC regulations to protect consumers? If you don’t support this, I assume you will be discontinuing your monthly dues payments to TASC shortly.

Supposed Fact 2. Knowing that the Better Business Bureau gives an F rating to all debt settlement companies, DD&A goes to great lengths to hide the fact that they are a debt settlement company. If DD&A can trick the BBB into believing they are a consulting firm and not a settlement company, then they hope to avoid an F rating. DD&A does not want an F rating because this would put them on a level playing field with the rest of the debt settlement industry. Damon Day states in his web site that he is not a debt settlement company and that he does not do debt settlement. He mistakenly contradicts himself in his Debt Settlement Video where he makes statements such as “OUR clients pay back 50%” and “OUR clients complete in 2 years or less”. Oops! You will also hear him say the words “MY clients” and other phrases that confirm the fact that DD&A is a debt settlement company and they do provide debt settlement services.

My Response: Dan, I am really at a loss here. I am not sure why you simply can’t grasp the concept that I am not a debt settlement company. I do have clients yes. I have clients with all different financial challenges. Some hire me to coach them on a monthly basis, some ask for referrals for Bankruptcy, or credit counseling or debt settlement. Once I help a client figure out the proper strategy, I can explain what they need to do to achieve success or I can refer my clients to organizations that offer what they need.

Dan, let me explain it to you like this. Think of me as a quarterback of a two man team. My team consists of my client and myself. My job is to read the defense and call the right plays to get my client into the end zone. Sometimes we need a running play, sometimes we need a quick pass, sometimes we need a Hail Mary and sometimes we are even forced to punt.

For instance, when debt settlement sales people tell a consumer that they should sign up into a debt settlement program. It is my job to look at the consumers financial circumstances and let them know if that is the right play. Let me give you a good example that happened today as a matter of fact. I was on a consultation with a client that ironically spoke to one of your sales people among others a few days before. Wouldn’t you know it, every single debt settlement sales person suggested that their debt settlement program was the best way to go. (funny how that always seems to be the case) However, with just a few simple questions I was able to determine that they currently didn’t have the proper cash flow to likely be successful in a debt settlement program.

The debt settlement sales people, yours included, called for a run up the middle while we were facing a blitz. Bad move. I called for an option play and suggested that we wait and see if the income improves for a few months before making any decisions. If not, then Bankruptcy would likely be the best option. Funny, I don’t often hear about debt settlement sales people telling consumers that they should wait a bit before making any decisions. Why is that I wonder?

Supposed Fact 3. Damon Day refers to himself as a financial analyst and a financial consultant yet he has not been licensed by either the Securities Exchange Commission, the Department of Insurance, the Department of Corporations, or the Department of Real Estate. Damon Day says he is qualified because he survived his own personal financial troubles and went to the school of hard knocks.We are pleased that Damon Day has survived his financial troubles, but that surely does not qualify him to be a financial consultant. A lot of additional training and testing would be required for Damon Day to become an officially licensed and qualified financial consultant.

My Response: I don’t claim to hold any state license. I have a degree in business/finance and a heck of a lot of experience helping people resolve debt issues. Is there something wrong with providing advice about a subject that I have a large amount of education and experience in? In fact, I leave it up to all my clients to decide for themselves how valuable my consultation was for them by making my fee voluntary and not payable until after the consultation. I even leave it up to my clients to determine the amount they want to pay me. I have consulted with numerous CFP’s, Attorney’s, CPA’s and other professionals about their own personal financial situations. The most common feedback I get from them, is that they didn’t learn what I shared with them in school or on the state exams.

In fact, Dan, weren’t you the one that made a comment when you were attacking me last month saying that experience and book smarts are two different things? Why yes you did, when you made a comment on my blog pretending to be someone else and claimed that I didn’t know anything about business and until I had the experience I didn’t know what I was talking about. Now you claim that regardless of my experience, if I didn’t take a test then I can’t know what I am talking about. It seems your opinion conveniently changes in order to fit your arguments.

What I would like to know is what financial education or licenses the telemarketing sales people have that are giving out financial advice every day over at New Era Debt Solutions? Am I to assume that all of your debt settlement sales people have finance degrees and have taken the CFP exams? I certainly expect that to be the case since your sales reps are out there operating as financial consultants and telling people that your debt settlement program is the solution to their debt troubles.

Supposed Fact 4. Throughout the DD&A web site there is an onslaught of words such as honest, ethical, straightforward, knowledgeable, unbiased, integrity, advocate, blah, blah, blah, blah, blah. We have learned from our experience that companies that feel they need to make numerous claims like these should probably be avoided. In most instances these companies are the exact opposite of what they claim and you will usually find a lot of smoke and mirrors.

My Response: I thought these were supposed to be Facts? I am not sure how to respond to this other than I will let consumers decide whether or not these things are true after speaking with me.

Supposed Fact 5. Damon Day’s methods of making money and getting new business are very sly and cunning, yet rate a zero when it comes to integrity. One method he uses is to offer a free contract review. He urges people that are contemplating debt settlement to send in their contracts of the company they are considering. He says he will review the contract and give his honest assessment. Do you think he will ever give two thumbs up to that company? Not going to happen. What he will do is tell you that this company is a bad choice, but lucky for you, he has a recommendation for you. Of course Damon Day’s recommendation means money for DD&A. Since their method of making money is by taking a client of one company and pointing them in the direction of DD&A, the chances of getting a true “unbiased” opinion are pretty slim.

My Response: Dan, why are you so afraid I will show consumers options other than your program? I thought your program was the best? Do you think a consumer is not smart enough to realize that having options is better than no options. You are right, if a consumer shows me a contract that I think is not a good deal for a consumer, I will suggest they research some other programs that they might not know about and compare all of the options. Why do you think this is such a bad thing? Unless of course you realize that your program will not likely be the preferred choice for consumers since you charge a very high fee. If you don’t like it, then perhaps you should change your program so that consumers will select New Era in a side by side comparison with other programs out there. I simply show consumers all of their options.

Supposed Fact 6. Another method Damon Days uses to build his business is to berate and ridicule all of his competitors. We think that whenever anybody has to resort to making them selves look good by trying to make everybody else look bad, they are using bad judgment and bad business practices.

For example Damon Day has written a review on one of the best debt settlement companies he could find, New Era Debt Solutions. New Era is a leader in the debt settlement industry with a great reputation for doing things right. But to DD&A they are considered competition and a prime target to try to steal customers from. You will notice that reputable and legitimate companies like New Era Debt Solutions don’t resort to slandering the competition to build credibility, but instead stand on their own laurels.

My Response: Dan, perhaps you don’t understand the concept of a consumer advocate and what they do. My job is to identify things that are harmful to consumers in my opinion and share that information. I am not a debt settlement company and you are not my competition. Please show me one instance where I berate and ridicule you? All I did was call attention to the fact that in my opinion, it appeared you were deceiving consumers and you attacked me for it.

You claim that New Era was one of the best debt settlement companies I could find. What makes you think that? I guess you will have to ask my clients whether they felt that I am stealing them or rescuing them. I will “notice that reputable and legitimate companies like New Era Debt Solutions don’t resort to slandering the competition to build credibility, but instead stand on their own laurels?” Dan, have you read your comments to me in my review on your company and what exactly do you call this attack against me personally? Is that what you consider standing on your own laurels? Oh wait, this is an anonymous website that is attacking me. It isn’t anyone at New Era, right Dan?

Supposed Fact 7. Damon Day’s reviews are written with one goal in mind and that is to steal clients so DD&A can make money. Damon Day has written reviews on companies that have great reputations and are leaders in the debt settlement industry with the sole intent of stealing their clients. His reviews are full of untruths and bad assumptions with the intent to mislead people.

My Response: I will let my reviews speak for themselves. Please visit my New Era Review so you can see all of the supposed untruths and bad assumptions I made to mislead people. Even though Dan Smith had an open forum and made about 12 to 15 comments he was never able to actually point to one inaccurate fact in the review.

Supposed fact 8. Imagine a guy who wrote a scathing review about the Ford Mustang in Car & Driver magazine. Then imagine that you discovered that not only had this critic never even taken the time to actually drive a Ford Mustang, but that he also worked for Chevrolet, a major competitor. This is Damon Day. Damon Day’s reviews are not honest and they lack credibility because he is writing about his own competition, and he wants their customers. Damon Day has been invited to visit the competition, and to drive the car so to speak, and to no surprise Damon Day has declined the offers. He couldn’t possibly write an honest review about his competition.

My Response: I am not sure what to make of this supposed fact. Scathing review? Perhaps Dan didn’t actually read my review. I said his fees where too high, which they are, and I was disturbed to see evidence of potential deception, but if they would fix those two things, they would be a company worth consideration. I invite anyone to read the comments Dan left on my review of New Era and come to their own conclusion about why I didn’t get a warm fuzzy feeling when he invited me to come visit their offices. He basically threatened to sue me, had his attorney call me twice, told me that not taking the review down was the worst decision I could make, and created a bogus review about me out of spite. Then when that didn’t work, he turns around and invites me to come to his office so I can see what a nice guy he is. Huh? The final words of Julius Caesar were echoing in the back hollows of my mind.

Supposed Fact 9. Damon Day says he can provide his debt settlement services for lower fees than others because he doesn’t carry the expenses of legitimate companies, expenses like advertising and promotion. We don’t know where he received his business education, but everybody knows that advertising and promotion are critical components of a business plan and are necessary for the success of any business. That is of course unless your business plan is to steal clients from reputable companies that have already paid for advertising and promotion.

My Response: Am I really spending my time responding to this? I don’t provide debt settlement services. Please show me where I said I provide them for lower fees? Dan do you ever read my answers to your questions? What you are referring to is my discussion on revenue allocation. Are you taking my words out of context on purpose? Or did you not understand what I was explaining to you? I am sure any consumer that reads our back and forth in the comments under my review of New Era will have no trouble understanding the fact that some companies spend a lot of money advertising and not very much on servicing their clients, and other companies spend less on advertising and more on servicing clients.

Supposed Fact 10. A simple search of public records will show that Damon Day is in trouble with the IRS, has tax liens against him, and has a history of law suits against him. We have absolutely no issues with the fact that Damon Day has had money problems. Many people do and times are tough. We do take issue with the fact the Damon Day throws stones at other people and writes negative and untrue reviews to make him and his company look good in an attempt to steal their customers. On top of that it doesn’t make a lot of sense for most people to take financial advice from someone who can’t seem to get their own financial house in order.

My Response: Ah the old attack the messenger when you can’t attack the message. I already responded to Dan’s ground breaking discovery about my history with lawsuits and the IRS when he attacked me the first time. You can read about it here. Notice Dan doesn’t tell you that the very same public records search also shows that I successfully defended myself against the lawsuits including a 20,000 dollar suit that I took to the appellate court and won when I was in my mid twenties. I guess that doesn’t fit Dan’s narrative that I don’t have the experience or the education to help consumers. Is it me or do all of these facts essentially say the same thing? Throwing stones, negative and untrue reviews, stealing customers etc.

Supposed Fact 11. We’ve got to give credit where credit is due. Damon Day can create an impressive web site. The little Wii Mii character is very cool. Perhaps he should drop the ideas of doing financial consulting and debt settlement, and pursue an honest career in building web sites. In today’s internet world consumers need to be very aware of the fact that a company can look very impressive based on the look of their web site, but what is hiding behind that web site is what really counts.

My Response: Dan as much as you would like me to stop educating consumers about the realities of your industry, I think all of my clients would agree that I provide a very valuable and needed service. Hiding behind a website? Dan my ugly mug and name is all over my website. My website is straightforward and tells consumers exactly what I do and what they will learn on a consultation with me. You are the one creating this supposedly anonymous website to attack me. Is that Irony really lost on you? I am simply baffled by how you can look at my website and claim I am hiding behind it, when you don’t even have the Chutzpah to admit that you or someone in your organization is responsible for these attacks on me. Dan you should give consumers a little more credit to know BS when they see it.

Supposed Fact 12. There is a huge divide between debt settlement companies. There are those that charge their fees up front before any settlements are made, and there are those that have a performance based fee structure where the bulk of fees aren’t charged until the settlements are done. There are only a handful of companies with a performance based fee structure with New Era Debt Solutions being one of them. Both Damon Day and New Era believe that it is wrong to charge most of the fees up front before the work is done. Here again we are giving credit where credit is due.

My Response: Huh? You bash me with the first 11 supposed facts and then use the 12th one to plug your program? Are you kidding me? You just spent 5 pages trying to convince people that I don’t know what I am talking about and then you use me as a source to endorse how great your fee structure supposedly is? According to you, I am not qualified to even know what I am talking about. Is anyone else reading this and trying to figure out what the heck is going on, or is it just me? I thought this was a consumer warning that was issued by consumer advocates, business owners, tasc members, and debt professionals? I thought what I was doing was causing serious damage to consumers, according to Mr. Smith? So if I am to understand this, if I agree with Dan Smith, I get credit, if I don’t, then I am an uneducated, unqualified menace to consumers and I don’t know anything other than how to make a website. Is that about right Dan?

Now that the supposed facts are out of the way. My favorite part of Dan’s review is his summary. Dan actually compares me to an illegal construction worker with a rented truck and stolen tools, that is just there to undercut the legitimate contractor. Dan, I realize you don’t understand my business and therefore are struggling to figure out how to try and attack me. I don’t even understand your comparison to a rented truck and stolen tools. Perhaps you can explain it in the comments.

What I do is very simple. If a consumer is in financial trouble they can call me. I will analyze their situation and make recommendations based on my education and my experience. The consumer is perfectly free to take my recommendations or not. I simply offer options and provide consumers with important insights to an industry that is fraught with frauds, rip offs and con men. I understand why you feel threatened and have this need to try and discredit me.

However, in the ultimate irony, perhaps you don’t realize this, but the more money you spend trying to tell people what a bad and evil person you think I am, the more curious they will become as to what it is that I do. I am sure people will be very interested to find out what I could possibly have to say from my little home office that has the President and CEO of a Multi Million Dollar corporation like New Era Debt Solutions, so spooked that you would actually take a large amount of time and money to try and discredit me and “warn” consumers to stay away from me.

So let me thank you for your efforts to help me spread the word to consumers that debt settlement companies for the most part are in the business of selling debt settlement to consumers. Just because you can make a monthly payment does not mean you should be in a debt settlement program. Unlike you Dan, I give consumers a lot of credit. Consumers know when they are being sold a line of BS and when someone is telling them the truth.

In all of your bloviating here, you didn’t manage to provide one fact that showed how I was supposedly hurting consumers? Anyone reading this, clearly understands that you don’t want people to learn what I will teach them, but please explain how I am harming consumers by providing options? I will await your response with bated breath.

Next you try to accurately predict my response to your “Consumer Warning”. Consumer Warning? Really, are we still going to call it that? I think by now everyone reading this pretty much knows it is just Dan Smith upset at Damon Day for exposing potential deception and trying to figure out how to get back at him. Of course you know how I am going to respond because you learned how I would respond the first time you attacked me. I thought you realized that attacking me personally to cover up the fact that you could not debate me on the substance of your issues with me, was not a good move. Now that you have written this second review I see that I must have given you too much credit.

Since you are the only one who has asked me to meet you in person, I would say the cat is now out of the bag so to speak and we can all stop pretending that you didn’t write this review about me. I just have one question for you. Why are you so afraid to put your name on this review and let everyone know you are the one writing it?

You can Read Dan Smith’s personal attack on me in its entirety here

As a Reader what do you think of Dan Smith’s Tactics? Do you feel they are helping or hurting him in the eyes of consumers? Please share your thoughts in the comments below.

Be sure not to miss out on any of my future articles, where I frequently expose rip off programs and provide insightful financial tips to consumers. You can get them delivered directly to your inbox the moment I publish them.

Please help other consumers and share my article via Twitter, Facebook, or your Favorite social network by clicking one of the icons below.

Debt Settlement Company Attacks Me for Exposing Their Deception

Damon Day — Thu, 25 Feb 2010 04:44:52 +0000

I feel so honored that I have my first official “we hate you review” from a debt settlement company. It is no secret that I am disliked by debt settlement programs that are out there ripping off and deceiving consumers for profit. When they resort to attacking me personally I know I am really striking a nerve and they are feeling very threatened.

Since they cannot attack my factual content, they must try and discredit me in order to distract consumers from the actual substance of my message, which is, that a majority of debt settlement programs are nothing but a vehicle to separate consumers from their money. I was surfing the Internet today and came across this little gem written of course by an unknown person afraid to stand behind their claims. They even borrowed my website header for their website, which I found a bit odd.

Here is a link to the actual attack website. Debt Settlement Company Attacks me Personally

When I saw this review it really brought a smile to my face. A smile because the anonymous author doesn’t seem to understand that consumers are smart enough to tell the difference between a factually accurate review and a smear tactic. Notice that there is no name on this review, and whoever created this domain has it set to private. This site was created simply to smear me personally. This is the only page on the domain. There are no links or any other information other than this rant about me. It makes me feel very important and special. Someone is very afraid of what I am educating consumers about, and that tells me I am doing a great job.

If I was stealing clients and ridiculing competitors, then why isn’t this author proud enough of his company to announce who he is and what his company does? Are they afraid that an honest debate on the substance of what they do will not stand the light of day? All my reviews are done out in the open with my name on them. I stand by my reviews and never make baseless allegations. Anyone can make anonymous posts on the Internet.

Now since the author of this review would rather remain behind a cloak of anonymity and there is good reason for them to do so, I can only assume that the person that created this is from a company that I have written a review about. They are clearly upset that I have reviewed their contract and exposed what they are doing to consumers. The funny thing is, I have only done two public contract reviews so far, so there are not very many possibilities as to the author of this “anonymous” review.

The writing style is certainly very similar to the the style used by Dan Smith – President of New Era Debt solutions. And coincidentally enough, this page just happened to get created the same day that Dan Smith threatened to write a bad review about me and post it everywhere. Now I cannot say for sure that Dan Smith is behind this, but I find it peculiar that he would not own it if he was really behind this attack.

If you would like to know why Dan Smith might feel the need to attack me personally, you should read my review of New Era Debt Solutions. If you have an hour to kill be sure to read the comments.

The unknown author starts off his rant by claiming my website is “nothing but a tool to make money for Damon Day.” They claim I lure consumers to me by offering a free review of Debt Settlement company contracts and then I will tell you what a horrible program it is and recommend a better one.

Oh my, I have been caught. Yes I must confess it is true. If a consumer sends me a contract for a program that is a complete rip off, I am afraid I will tell a consumer that. And for good measure I will spend the time to speak with the consumer about their situation and help them understand all of their options. Not just the one being sold to them by the telemarketer sales rep. Then, I might recommend better programs that are available for the consumer to research and compare to the current one. I earn a living helping clients make educated financial decisions and avoid rip off programs, which will typically save them from paying thousands of dollars in unnecessary fees.

Next they claim that I steal clients from other companies and point them in my direction so I can get paid. The funny thing is, I am paid directly by my clients after I do the consultation with them. If they don’t think I provided value they don’t pay me, it is that simple. As far as stealing clients, I think all of my clients would agree that it was more like an urgent rescue mission.

If you are a consumer that called me for help and showed me a contract for a program that was clearly ripping you off, and I explained how they were ripping you off and why, then suggested you look at some other options and explained why they made more financial sense for your situation, would you consider that a good or a bad thing to have more choices? Good for the consumer, clearly upsetting for the rip off settlement program. They lose a big commission after all.

Now the attack gets personal. When a debt settlement company is caught ripping consumers off and lying to them, they have to resort to attacking the person that is exposing their fraud. So here is what this unknown person has found:

They claim that I do not have an SEC, Insurance or Real Estate license so I am not a financial consultant. What is laughable about this is that I don’t claim to hold any state license. I have a degree in business/finance and a heck of a lot of experience helping people resolve debt issues. There is nothing illegal about providing advice about a subject that I have a large amount of education and experience in. In fact, I leave it up to all my clients to decide for themselves how valuable my consultation was for them by making my fee voluntary and not payable until after the consultation. I even leave it up to my clients to determine the amount they want to pay me.

What I would like to know is what financial education or licenses the telemarketing sales people posses in this anonymous organization that is attacking me? After all you claim it might be illegal, so am I to assume that all of your debt settlement sales people are CFP’s? Again, there is a reason why this attack is anonymous.

The rant then continues by searching public records for me. They claim I am being sued by multiple creditors, collection agencies and the IRS. That is of course false. I am not involved with any active lawsuits with creditors. I was many years ago and I openly talk about that on my website. I was in over my head with credit cards when I was in college and was unable to pay them. This was the start of my eye opening and first hand experience with creditors and collections, and I have used that experience coupled with my financial education to help consumers ever since.

I was actually sued on 3 credit cards that I could not pay. I represented myself in court on all three cases. On the first case I caught the attorney in a bold face lie and he was forced to dismiss the case. On the second case I settled because it was a ridiculous 1300 dollar lawsuit.

However, the 3rd case is very interesting. I was being sued for about 20,000 by a third party debt collector with absolutely no evidence against me. I fought the case for 3 years and was confident going into trial that I would have a slam dunk case as the Plaintiff would be unable to meet its burden of proof. The burden of proof in a civil case is by the preponderance of evidence. Since the attorney had no evidence, how could I lose? However, the judge ruled against me and I received a judgment for about 20,000.

Not willing to take the unlawful ruling by the judge, I appealed the case myself and won. The appellate court agreed with my position and the judgment was overturned. Didn’t the author see that in the public records search? Perhaps, me defeating the creditors on appeal while representing myself didn’t fit into their narrative that “I didn’t know what I was talking about, therefore didn’t really help consumers.” Oops.

The reason I am so passionate about warning consumers about rip off settlement programs is because most of them will absolutely get consumers sued. I know most consumers would not prefer to defend themselves in a lawsuit as I was forced to do many years ago. I expose these rip off settlement programs that convince consumers to sign up into 4 and 5 year settlement plans that will very likely lead to the inside of a court room.

Now on a more serious note, yes, I do owe back taxes to the IRS. As any small business owner knows, the IRS is not very forgiving and you are always guilty until proven innocent. There were numerous circumstances that led to back taxes being owed to the IRS, the biggest one is that I am unwilling to sell out and put profit above people. My passion is to help consumers. I use my knowledge, skill and experience to help consumers get out of debt and avoid getting ripped off by blood sucking companies along the way.

When you start a business from scratch and focus on helping people first and getting paid second, sometimes cash flow can get very tight. Especially when the programs that I am warning consumers about spend 10’s of 1000’s of dollars a month in advertising to peddle their BS programs to unsuspecting consumers. It can be very expensive to reach consumers with so many programs flooding the market place, ripping off consumers, and then using the excess money to drive up advertising rates. There were times over the years that I literally had to choose between formula for my baby boy, gas in the car or the quarterly payment to the IRS. Any parent would know the option that I chose.

When the chips where down, I stuck to my principles. It would have been very easy for me to give up on helping consumers. With my knowledge and skill set I could easily make several hundred thousand dollars a year by selling consumers into rip off debt settlement programs. I know many people that do it. Or I could make millions by starting my own rip off program. Again, I also know many people that do that as well. More and more of them pop up every day.

However I chose to do the hard thing and continue to provide consumers with the one thing that is so difficult for them to find. Honest, unbiased, education and help to create a realistic strategy to get out of debt given their specific set of circumstances. I am very glad that I stuck with my “little company that could” even when it seemed that it would be financial suicide to do so. I am now being rewarded for my efforts and my business grows every day with referrals from existing clients and professionals that are aware of the help I provide consumers. Even more than that, I go to bed at night with the satisfaction of knowing that I helped a few more families from being led down the path of financial ruin by rescuing them from companies that put profits above people.

Next the author attempts to cast suspicion because my assistant lives in Tennessee and I do not. That is true. I don’t hide this fact from anyone. I tell all my clients that I work from my home office. Lower overhead means I don’t have to charge as much money for my services. No commute means that I can spend more time with my family. Why in the heck would I want an office? Now, I don’t particularly like the taste of beer, but yes, many times I help people with their finances while I am wearing my pajamas and drinking a Pepsi. If I put one of my suits on before walking to my office, would that make me more “legitimate” in this authors eyes?

Most Debt Settlement companies make millions of dollars by ripping off people that can least afford it. I represent a threat to their bottom line and these attacks are expected. This is the first one I have seen but I know it certainly won’t be the last. If these blood sucking companies weren’t attacking me, I would fear I wasn’t doing a good enough job looking out for consumers.

If you are a consumer in debt looking for real help, and are curious to know why the education I share is such a threat to these multi million dollar debt settlement companies, feel free to call my assistant in Tennessee to schedule a phone consultation with me in California, and I will don my pajama pants, crack open a Pepsi and tell you what debt settlement salespeople are afraid of you finding out.

Here is a link to the actual attack website. Debt Settlement Company Attacks me Personally

As always, if you would like to contribute your thoughts, and have something to add to the article, please do so by commenting below.

Please help other consumers and share my article via Twitter, Facebook, or your Favorite social network by clicking one of the icons below.

Debt Negotiation – Applying the Insolvency Rule to a 1099-C Tax Liability

Damon Day — Fri, 21 Aug 2009 07:59:36 +0000

If I enroll into a Debt Negotiation program to settle my debts with my creditors, will I have to pay tax to the IRS?

This is a daily question I am asked during my consultations with consumers. The answer is that it depends on your situation. Before I review a few situations to illustrate when you may or may not be required to pay a tax on forgiven debt, let me make it very clear that I am NOT a Tax Attorney and I cannot give you specific tax advice. Please first verify everything with your personal tax professional.

The question about paying taxes on a forgiven debt revolves around a creditor issuing a form 1099-C for a cancellation of a Debt. Say you owe $10,000 and are unable to pay the entire balance. The creditor agrees to accept $5,000 as payment in full and offers a Debt Reduction of $5,000. The creditor then may issue you a 1099-C showing that you had $5,000 of debt forgiven that may be reported by you as taxable income. Think about it like this. Normally when you borrow money you do not pay tax on it because you have to pay the money back. It is not income. However, if you do not pay the money back, then it is essentially a gift which then could become taxable to you.

A lot of consumers have some unjustified fears about this potential tax ramification of Debt Negotiation. First let me make it clear from a financial standpoint, that paying taxes on an amount of debt that is forgiven is always cheaper than paying back the entire debt plus interest. For instance, if a creditor forgave a $9,000 debt, you may have to pay $3,000 or so to the IRS depending on your situation. Isn’t $3,000 cheaper than $9,000 plus interest? So even if you found yourself in a circumstance where you had a tax liability, you are still saving quite a bit of money.

Lets now examine when you may or may not have a tax liability when you have consumer debt forgiven by a creditor.

The Insolvency Rule (IRS publication 908)

Most Debtors find that there is actually a big “loop hole” called the insolvency rule that allows them to NOT have to pay any taxes on the forgiven debt. According to the IRS, if you are “insolvent” at the time of the debt forgiveness, (which most consumers are if they are enrolled in a debt negotiation program) then you have no tax liability on the debt reduction up to the point that you are insolvent.

Let me put that in English for everyone. If your debts outweigh your assets then you are insolvent. So if you have a negative net worth then the IRS lets you slide and does not require you to pay taxes on the forgiven debt. As an example, if you where 100K upside down on your house, had 50K in credit card debt and only 40K in assets then you would be insolvent by 110K and you would not have to pay taxes on any of the settled credit card debt..

Most consumers find that if they are so far upside down financially that they have to look into a debt negotiation strategy, that they are also insolvent and therefore not liable for additional taxes on the amount of debt forgiven. As always though, check with a qualified Tax consultant about your specific situation.

How to find the Best Debt Settlement Company for you.

Damon Day — Thu, 30 Jul 2009 16:53:25 +0000

A question that I am asked quite often is, “who is the best debt settlement company?” Well, that really depends on what your definition of “the best” is. Personally I have not seen more than a small handful that I would even consider recommending to a consumer. Most of these debt settlement outfits have less than a 25% success rate and will do nothing more but siphon fees from consumers before ultimately pushing them into Bankruptcy.

WARNING – Do not even consider working with a Debt Settlement Company until you know if Debt Settlement is the right solution to your current financial situation. Determining the best strategy for you first, is the most important step that unfortunately most consumers skip over. You should not call a debt settlement company salesman and ask if you should proceed with a debt settlement plan. This would be akin to asking a car salesman if you should buy a new car. Make sure to speak with a qualified financial professional that will review your Overall situation and help you determine the best financial strategy. If you determine that settlement is the best option, and you want professional assistance, then you should call numerous debt settlement companies looking for the one that has the best debt settlement program for you.

Here are the major points that you should compare:

1. Fees - This is by far the biggest reason I would never even consider 99% of the debt settlement companies in existence. The industry standard fee structure is 15% of a clients debt charged over the first 14 months. This is a ridiculously bad deal for a consumer. First it can be a very large amount of money if you have a high debt load. Second, you have to pay the entire fee before you can settle your debts, dangerously extending the time in which you are not paying your creditor. Third, they make the same amount of money regardless of whether or not they do a good job for the consumer.

Look for a company that charges a fee based on the amount of money that they actually save you. That way you know they are going to get you the best deals that they can. These companies are more difficult to find because they charge much less money and therefore spend much less on advertising. However, the extra time spent locating a performance based fee company will save you thousands of dollars in fees and will be time well spent.

2. Experience – Does the company that you are talking to actually have any experience or a track record performing the service that you are hiring them to perform? Did they just open their doors a few months ago or have they been helping consumers for at least a few years? Can they show you proof of actual settlements they have performed for past clients?

3. BBB Record – I have mixed feelings about this as the BBB is not an impartial entity, however they are a forum where consumers can report dissatisfaction with a specific company. When it comes to debt settlement, I do not put much stock in the letter grading of the BBB as they have publicly admitted their bias toward the settlement industry as a whole and their letter grades reflect that. However, you should look at the BBB to see if there are any actual complaints against a specific company. Feedback from current and past clients is what you are really after here. So make sure any company that you are considering doesn’t have a large amount of unresolved complaints from consumers.

4. Customer Service – This is a very big issue and should not be glossed over. When you are in debt, you can’t pay your bills, you are getting nasty calls from creditors and are losing sleep at night, you want to be able to pick up the phone and talk to a knowledgeable person about your situation. The last thing you want to do is work with a company that will not return your phone calls or simply treats you like a number.

Customer service should be a number 1 priority and you want to find a company that doesn’t have a client load that all but guarantees you will not be given personal attention. When it comes to you and your specific situation, bigger is not necessarily better. Make sure you will get the personal attention you deserve.

5. Consultation/Sales – This ties into the warning at the top. You should not really be speaking with a debt settlement salesman until you already have a pretty good idea about whether or not the concept of debt settlement is something that makes sense for you. That being said, is the company providing you with a consultation or a sales pitch? A consultation would be taking the time to gather all of the facts about your situation, understanding what you are trying to accomplish and educating you about what debt settlement is, and how it would affect you. A sales pitch is more along the lines of, “oh you have debt? Well we have the best program available, let me tell you why you should sign up.”

6. Attorney vs non attorney – Some consumers feel more comfortable working with an attorney. Unfortunately many companies know that and exploit it. Do you need an attorney to negotiate your debt with your creditors? In short No. When it comes to settling your debts, there is not much an attorney can do for you that a non attorney could not. Many of the so call Attorney settlement companies are simply that in name only. Typically they may just have an attorney on staff but the attorney is not actually doing the negotiating or any of the day to day duties. One thing you can count on is paying through the nose for one of these Attorney settlement companies.

Some consumers have a fear of getting sued and therefore would rather pay the excessive fees in exchange for the comfort of knowing they are represented by an attorney. Here again, make sure to read the fine print. In most cases you will discover that the hefty fees you are paying are not for legal representation. Meaning you are not contracting with them to represent you in court. So you are paying hefty fees without getting any actual advantage. So make sure to read the fine print, and understand what you are paying for.

These 6 categories will give you a good jumping off point for helping you to determine the best debt settlement company for you. With hundreds of companies out there, make sure to take your time and select the one that best fits your needs. Don’t allow yourself to get rushed into any decisions. It is better and cheaper to take your time and make the right decision up front then to try and correct a wrong decision down the road.

Top 5 Reasons Most Debt Settlement Companies Fail their Clients.

Damon Day — Thu, 30 Jul 2009 02:00:09 +0000

Debt Settlement Companies are everywhere. You have seen the ads on TV and heard them on the radio. You know, the ones where they promise to cut your debts by up to 70%, stop the creditor phone calls, lower your monthly payments, and make your life so blissfully happy that you will wonder how you could have ever lived without them.

In reality, I would rate most Debt Settlement Companies as “Epic Failures.” What follows is by no means an exhaustive list of the things you should look for, but if a company fits this profile, you should seriously think twice about entrusting your family’s financial future to them.

Top 5 Reasons Most Debt Settlement Companies Fail their clients.

5. They attempt to cut off all communication between you and your creditors.

Putting up a wall between you and your creditors may sound like a nice respite for you, but it is an absolutely terrible negotiation strategy. You need to keep the line of communication open with your creditors. If you have a legitimate financial hardship and you are hoping to work out an eventual settlement with your creditors, you need to have that communicated to them. After all, you do owe them the money and you should at least extend the courtesy of keeping them in the loop on your financial situation and your plans on satisfying the debt.

Any debt settlement company that is going to send the creditor a “cease all communication” letter on your behalf is setting you up for disaster. The creditor will not be excited to learn that they are no longer allowed to contact you about the debt and the letter could very well trigger an early out referral to their legal department for a potential lawsuit. Sending these letters is a dangerous and outdated practice and any settlement company that still uses this approach definitely is not looking out for your best interests.

4. They have too many clients to provide the proper attention to your situation.

This is not Costco or Sam’s Club. You will not get better deals and certainly not better service if the company is dealing with thousands of other clients at the same time. Every consumer has a unique set of circumstances that ensued prior to them arriving at the point where they were unable to pay their bills. If a company is “servicing” tens of thousands of other clients at the same time, how are they going to provide your situation with the individual attention needed to produce the best results for you?

The reality is, companies that take on too many clients have to resort to a canned, one size fits all approach in order to handle the volume. If you were sending your child to school, would you choose the school that had a 200 to 1 student to teacher ratio, or the school that had a ratio of 1 teacher per every 15 students? Never entrust your financial future to a one size fits all approach. Every situation requires a unique perspective, understanding and solution.

3. They are focused on Sales not Service.

Almost all Debt Settlement Companies are sales driven. It is not about helping the consumer, it is about signing up the consumer into their program. In most cases, when you call for a free consultation, you are just talking to a salesman, not a financial consultant. Ask for the credentials and the background of the specific individual that you are speaking with. After all, this person is giving you advice that is going to affect your finances for years to come, shouldn’t they actually know something about finance?

Do not call a Debt Settlement Company for financial advice. You need to speak with a qualified financial professional first to help you determine the best strategy for you to pursue, given your circumstances and goals. You should never call a Settlement Company unless you know Debt Settlement is the best approach for you and you are now researching the specifics of individual programs that are available.

2. They hold on to your money every month.

When working with a debt settlement company you should find one that allows you to hold on to your own money, or at minimum use a FDIC insured 3rd party escrow account. I personally believe it is better to hold your money in your own bank account. Life happens every day and you never know when an emergency may require you to have access to the money you were setting aside for settlement. If you are saving your own money, you are in control over what you are saving and how fast you are saving it. Most companies want to control your money because they want to take their excessive fees from you as quickly as possible.

1. They charge excessive fees that are not tied to their performance.

The purpose of hiring a debt settlement company is to assist you in negotiating down your debts with your creditors as quickly as possible. Unfortunately most companies charge outrageous fees in the neighborhood of 15% of your entire debt and usually want to collect that money within the first 12 to 14 months of the program. This means they collect all of their fees before you are able to settle your debts. This business model directly contradicts their supposed objective of helping you get out of debt as quickly as possible.

What they don’t tell you is that most of that 15% of your debt fee goes to marketing, not to the service they are providing you. As a general rule, never hire a company that does not base their fee on their performance. You would never pay a contractor the entire bill upfront, why would you pay a Debt Settlement Company any differently. Find a company that charges a fee based on what they actually save you and will charge a majority of their fee after they perform the service.

For these reasons and a few others, I rate most of the debt settlement companies in existence as “Epic Failures” when it comes to client success rate, customer service and reasonable fee structures. There are a small handful of companies that do not fit this mold, but they are difficult for consumers to find because they do not spend large amounts of money on advertising. Entering into an agreement with a debt settlement company requires a major leap of faith on your part and it is not a decision that should be made lightly.