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”).
