Debt Cures: Does Kevin Trudeau Make Money or Sense? Part 3

20 Mar Debt Cures: Does Kevin Trudeau Make Money or Sense? Part 3

Part 3 of my review examines Kevin Trudeau’s book, “Debt Cures “They” Don’t Want You to Know”, Chapter 5: Negotiate! The purpose of the review is to examine whether Trudeau, who has had extensive involvement with credit card fraud and the Federal Trade Commission for some of his previous books, makes any sense in this latest self-help promotion or is he making money selling empty promises

Trudeau explains that sitting around worrying about your debts accomplishes nothing and promises a technique which will cut your payments in half. This technique? Negotiation, says Trudeau. He recommends getting out pencil and paper and working on financial statements — a balance sheet with all your assets (property) and all your liabilities (debt), and an income statement (for a particular point in time, for example, in June, you had so much in income and so much in expenses and what the end result is — typically a negative number).

Trudeau states that everything is open to negotiation and that creditors will want to see these numbers in order to make a determination that you cannot pay the debt. Trudeau advises having an accountant write a letter on their letterhead informing the debt collection agency that the consumer is insolvent. Trudeau claims this method will cut your debts by 50, 75, or even 100%.

The information presented is good for your own personal use. It helps one know for sure that you are in financial trouble to put it all down in black-and-white; but why on earth would someone in financial trouble provide these detailed statements to a debt collector agency voluntarily? I know that I would never advise one of my clients to voluntarily turn over an income statement to a debt collector–the debt collector will take one look at the form and know immediately where to go to garnish your paycheck and where your assets are located. The debt collector will know who to subpoena for your tax return if your accountant writes the letter on your behalf. Sometimes a court will order this information to be turned over and a consumer must obey a court order, but why invite a creditor to take your property?

This is an “empty promises” chapter designed to get the reader (or previewer) excited about the possibility of getting rid of 100% of their debt but generally, in my experience, the possibility of the debt forgiveness happening is about the same as a coconut falling and hitting you on the head in the middle of your living room. Trudeau also says nothing about the tax consequences of such forgiveness. The IRS views debt forgiveness as INCOME on which the consumer now owes taxes. The debt forgiver will issue a 1099 in the amount of the forgiven part of the debt.

Again, some useful information presented in this chapter but it also needs to have a warning label “SEEK LEGAL ADVICE BEFORE GIVING AWAY INFORMATION TO A DEBT COLLECTOR.” Trudeau promises big results but this chapter may have grave consequences.

Part 1 of my review examines the first three chapters of Kevin Trudeau’s book, Debt Cures They Don’t Want You to Know. (gets an “okay” rating)

  • Part 2 of my review dissects Chapter 4 of the book (gets a warning of “Get legal advice from a lawyer in your own state”).
  • Part 3 of my review deals with Chapter 5 of the book (gets a warning of “Get legal advice before following Trudeau’s advice”)
  • Part 4 of my review examines Chapter6, as Trudeau discusses how to cut your credit card rate. (gets a “doesn’t hurt to try it; don’t expect it”).
  • Part 5 of my review examines Chapter 7: Fighting Back. (gets an okay rating).
  • Part 6 of my review examines Chapters8-11: Credit Score (gets “good information”)
  • Part 7 of my review discusses Chapter 12: Credit Reporting Errors (gets mixed review as he repeats bad information (discussed earlier in Part 3) but generally good information).
  • Part 8 of my review examines Chapter 13: Student Loans (gets generally good review)
  • Part 9 of my review discusses Chapter 14: Home is Where The Start Is (gets nearly failing grade)
  • Part 10 of my review examines Chapter 15: No Bankruptcy (gets failing grade/adds shame)
  • Part 11 of my review examines Chapter 16: Big Business (credit card industry)(gets A grade for giving information)
  • Part 12 of my review discusses the information presented in Chapter 17: Stealing Candy from Babies (gets okay rating for giving information)
  • Part 13 of my review examines Chapter 18: Three Ring Circus (gets failing grade for repeating information already provided)
  • Part 14 of my review examines Chapter 19: Slaying the Dragon (gets A grade for giving the math on how long it takes to pay off a 20% credit card with a balance of $8000 with just minimum payments….FIFTEEN YEARS!!!
  • Part15 of my review examines chapter 20: Stopping Debt Collectors Cold (gets a failing grade for some good information and then followed by really bad advice: scary!)
  • Part 15B of my review goes into more detail about what was scary about Chapter 20.
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I'm a consumer protection lawyer in Oregon, working with people in Klamath; Lake; Jackson; Josephine; Curry; and Deschutes County. I speak regularly on bankruptcy and consumer protection issues nationwide.
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