Jorge Newbery: Debt Cleanse

Transcript

[0:00:36] Charlie Hoehn: You’re listening to Author Hour, enlightening conversations about books with the authors who wrote them. I’m Charlie Hoehn. Today’s episode is with Jorge Newbery, the author of Debt Cleanse. Are you frustrated, embarrassed, even paralyzed by your debt? Well, what if you could free yourself from debt completely without filing for bankruptcy? That’s what Jorge did. Like many Americans, Jorge struggled with debt but unlike most people, he owed more than 26 million dollars. After a natural disaster wiped out his multi-million dollar business, creditors came after him and the stress was crushing. In this episode, Jorge shares the amazing way that he was able to settle his debts for pennies on the dollar and how you can do the same. Sit tight because this episode might set you free. Now, here’s our conversation with Jorge Newbery. I’m really excited to talk to you, this is a huge problem that afflicts so many people. Jorge, take me to the exact moment, paint the picture a bit when you realized you were in deep trouble with your debt?

[0:02:13] Jorge Newbery: There was a point in January 2000 and, oh boy, it’s going to January, more or less 2006. I had been – I owned a 1,100 unit apartment building in Columbus Ohio, one of the largest apartment complexes in the country. This was the largest out of 4,000 apartments that I owned across the country. I had a net worth in the tens of millions, I was doing really well. On Christmas eve of 2004, that with The Meadows, the 1,100 unit complex got hit by an ice storm and it caused extraordinary damage to the property. I thought I was good then. I was well ensured but the insurance didn’t want to pay. We ended up a litigation that triggered a series of events which just over a year later, was the first time I realized that I might not get out of this thing. I was – I had taken loans on all of my other properties and the insurance company ultimately settled for huge amount of money, 32 million dollars, but we were already in about 45 million dollars and we had found ourselves in a very public battle with the city of Columbus. They decided they wanted this property closed and they wanted the property themselves which they eventually got. I realized that probably in January of 2006 that I was not going to escape this and the publicity was just so bad and it was really – no matter what I did, I was ending up losing. You know, years later, I did a book signing a couple of years ago on Columbus and a city inspector came up to me told me that hey. When this is going on, the city said that no matter what I did, they had to fail me. I didn’t realize that at the time. I was just thinking “Hey, we’re not doing good enough.” The reality is, the deck was stacked, I was not going to escape from that situation and I ended up 26 – lost everything and plus 26 million dollars in debt.

[0:04:06] Charlie Hoehn: Wow, take us to the exact moment where you realized you were in deep trouble with your debt?

[0:04:13] Jorge Newbery: There was a point, the point in which when The Meadows closed, I was driving away from the property for the last time and you know, at that point, tens of millions of dollars in debt. I had the assets that had backed that debt, but they were pretty much gone or diminished. There was a realization that you know, I was not going to escape this. You know, I moved into another property and I remember lying in bed that night and you know, I just at that time, I had started grinding my teeth. Which I had never done before and luckily don’t do now. But you know, I would lie in bed and I’d wake up or kind of realize that my teeth were kind of locked shut and kind of going back and forth. My mind was trying to figure out how to get out of this thing. I was in deep and you know. I was getting incessant calls, I was getting people showing up, process servers, serving me lawsuits, it was a tough time. I really had no, “What am I going to do? Am I going to file bankruptcy?” Which I didn’t want to do. It seemed like it was conceding failure but how am I going to get out of this thing? That was a tough period.

[0:05:26] Charlie Hoehn: Yeah. I can’t even imagine being in that much debt, most people can’t. But bring us to the moment where you started to breakthrough? What did you realize or what were you doing that inevitably pulled you out of that debt?

[0:05:47] Jorge Newbery: Here’s how it started, there was a property that I owned in Kansas city that went to foreclosure sale. I showed up and the lender showed up. I actually had a delegate there on the cellphone with a bid and then the lender showed up and they made a mistake. I didn’t realize it at the time but that night, I was out for a run, trying to release some stress. I realized, “Hey, they made a mistake.” So I called my attorney the next day, we challenged the lender in court and it ended up going on for more than two and a half years. It went all the way to the Missouri court of appeals which is the highest court in Missouri and they ended up deciding in my favor. Basically their decision was that the creditor’s attorney had inadvertently extinguished 5.6 million dollars in debt. A huge amount of debt, it was now gone. That was kind of the point where I was saying “Hey, these guys made a mistake. I wonder if my other creditors have also made mistakes?” I started going through the documents, through the correspondence, through the lawsuits, through everything I could get my hands on. I was looking for errors for little, I mean, they could be small, modest errors but anything I could find which I could gain leverage to exploit against the lenders. It was shocking that I found a gusher of errors in almost all these debts and their collection practices and what not. I just kept looking and because they do so many of these – they process so many loans, they process so many lawsuits, send out so many collection letters – inevitably, you will find deficiencies. And those deficiencies are what you can use to exploit against your lender, your bank. I started doing it and having success. What I would do, it’s not like “Hey, I found a mistake so as a result, you know, I don’t owe you the money.” It’s more like, “Okay, I found this mistake. I owe you $100,000 but hey, let’s just give you 10 and you’re done.” I found that if you become the exception, the problem and you’re not going down their assembly line, you fall off the assembly line. They have to pay attention and they find a way to get rid of this situation and I’ll take a small settlement and be done with it. That cleanse is completely based on that, finding these errors and exploiting them.

[0:08:16] Charlie Hoehn: Wow, that’s unreal. For people listening to this who might have a bunch of student loans or consumer debt, what would you tell them? Would you tell them you need to go through all the paperwork and look for these little errors and mistakes or what’s your advice to them?

[0:08:36] Jorge Newbery: Absolutely, that’s what you do. The first thing is if you can’t – number one, if you cannot afford to pay your debt is just stop paying, what happened to me and it happens to –

[0:08:45] Charlie Hoehn: That goes against everything that we’re told.

[0:08:48] Jorge Newbery: Yeah, exactly. Most people are told, “Hey call your bank, work something out.” But the reality is the bank is there, the lender or creditor is there to extract as much money as they can from you. They’re looking out for themselves, they’re not looking out for you.

[0:09:02] Charlie Hoehn: The average American I think has $17,000 in consumer debt or something like that – which is not an amount that is like impossible to pay but it is a big amount when you take into consideration all the other payments that they’re making. Do you tell people who have – let’s call it, for a lack of a better term, a “reasonable” amount of debt to stop paying?

[0:09:31] Jorge Newbery: No, the question is, can you afford your debt? And can you see that you’ll be able to continue to afford it? If you can pay it, then pay it. The book is not for the people who can pay. But if you’ve lost your job, if you’ve had an unexpected medical emergency which has depleted all your finances, if you just got divorced, there was a death in the family. Any number of reasons why individuals and families in America ended up with unaffordable debt which is a huge percentage of our population and they struggle. What they end up doing often times, before it gets bad, they end up taking more loans, credit cards and bill consolidation loans. They pay off one debt and replace it with another and then they end up maxing out their credit cards again. It’s going to end, if they can’t afford it, it’s going to end likely badly. What I tell people is, what you don’t want to do is stop borrowing from your friends and family, taking loans against your house in order to pay credit cards. If you can’t pay them, you need to proactively decide, I got to stop paying and stop paying everything. Your credit’s going to messed up if you stop paying one. At that point, just stop paying everything. Again, only if you can’t afford it. If you can afford it, pay it. But there’s a lot of people in America who cannot afford their debt today and they need to take that step and just stop paying and brace for it and get through it. Debt Cleanse gives you step by step advice on every type of debt from credit cards, to student loans, to pay day loans, to mortgages, to business loans. Every type of debt, here’s the process to gain leverage against your lenders. You’ll end up paying them something but you’ll end up paying them in all likelihood a lump sum settlement that gets rid of the debt once and for all.

[0:11:17] Charlie Hoehn: When you say a lump sum, how significantly less is that than the total that you were paying against on average would you say?

[0:11:28] Jorge Newbery: Dramatic. We would say, I mean, for a credit card or a personal loan, it should be under 10% of what’s owed. If you owe 20,000, you should be settling for 2,000 or less. If you owe on a mortgage, you know, there’s a house that backs that so there will be, you know, if you owe $100,000 on a house that’s worth $100,00, that’s pretty common. Then maybe you’re settling that for 50,000, 60,000. Somewhere in that range. You know, if you have a car, you owe 5,000, the car is worth 3,000. Maybe you’re settling it for 500 or a thousand and you’re thinking, repo or what not but there’s tactics in the book, how to avoid repo and still keep your car while you’re not paying.

[0:12:12] Charlie Hoehn: Wow. You stop paying your credit cards, how did you figure this information out apart from the five million being effectively waived from that error, how did you learn so much about this topic?

[0:12:28] Jorge Newbery: I was kind of forced to. There was so much debt, I didn’t have the money to pay it. I wasn’t even close to making payment plans and there weren’t many options. I mean, the only option was to file bankruptcy and you know, I thought if I filed bankruptcy, that’s going to create challenges for me going forward in rebuilding. So let me just not pay and then try to make this work. I didn’t have really much of an option and then as I won that one case, it gave me motivation Hey, these other guys are pursuing me in court or what not. Now I’m fighting back. Here’s the, a couple of things to note is the majority of people who get sued don’t even go to court. They get sued by a creditor, they don’t even go to court and answer and we’re talking, I don’t know the exact percentage, we’re probably talking less than 10 or 20% will actually respond to a credit card lawsuit for instance. Most people will simply ignore it, they get a judgment, the creditor gets a judgment and now they can go and try and garnish your wages, put a lean on your home or levy your bank account. If you answer, if you’re in the minority and you answer, all of a sudden, now you’re off that conveyor belt because everything else is going smooth and you’re one of the outliers. Now, an attorney is going to have to recon with “Okay, how do we resolve this?” You can show up in court, there may or may not have the documents necessary. Now you’re, lots of times, I’ve been there many a times, you show up in court, Chase Bank is there, you’re there or I’m there and they’re saying, “Okay, before we hear this matter, everybody go out in the hallway and try to make a deal.” They know you’re talking to Chase’s attorney and they’re saying “Okay, you owe 10,000.” I’m saying “Yeah, but I don’t have it. I can give you a thousand now.” It may or may not take a thousand dollars now or 500 now or whatever you offer but give them the offer and now you’re contesting the case, it’s not open and shut. They could say, for instance. Chase Bank will say that Jorge Newbery owes us $10,222 and I would say okay, well I don’t know if I owe $10,222. I need a pay history showing all my payments from the very beginning, all my charges from the very beginning because it may be $10,222 but also, maybe, 10,122. I don’t know. They need to prove it to me. I need to get that information. You’re making it very difficult and by the time you show up in court, many a times, it’s not Chase Bank. It’s some debt buyer who has bought it from Chase Bank or some attorney representing Chase Bank, and the records, as these debts get sold, you know, the documents are handed off from debt buyer to debt buyer. Lots of times, the documents go missing, data gets fuzzy and so if you start demanding the backup, many a times, they can’t produce it. The point that they realize that they don’t have all the documents to back it up, all of a sudden, you’re $500 starts looking attractive.

[0:15:27] Charlie Hoehn: Wow, okay. Let’s say I’m a college kid, just graduated, I’m 21, 22 and I’m staring down the barrel of quarter of a million dollars, actually, I’m sorry. I’m a law school student who is staring down a quarter of a million dollars. Do you tell them to go through this exact same – does this apply across the board to every type of debt?

[0:15:57] Jorge Newbery: It does apply to every type of debt, the only caveat is some debts would be different. Let’s say, it will be treated a little differently, the strategy’s different for instance. If it’s a private student loan versus a government student loan. I show them both in the book, that the process deviates at points. The government backed student loan which many are, have kind of a separate process. Lots of times it doesn’t go to court at the beginning, it goes to an administrative law judge. The tactics are the same, you’re looking for problems, you’re looking for deficiencies and you’re exploiting them. That law student who just graduated with a quarter million dollars in debt, who is now having trouble finding a job because there’s a glut. Unfortunately, there’s a glut of attorneys out there looking for work and there’s not as much work as many had expected and it doesn’t pay as well as many had expected. That 250,000, more than a mortgage for most people, if he or she can’t pay it, there’s no reason to start, “Hey, I can enter a 40 year payment plan or something.” That which they may or may not be able to honor. Simply don’t pay it, and then fight back. The win? is you could get this $250,000 student loan settled for 10,000, 20,000. Somewhere in that range.

[0:17:13] Charlie Hoehn: What do you say to the people who might be thinking you know, “This seems unfair to do this to these companies because these people got themselves into these messes to begin with?”

[0:17:26] Jorge Newbery: Yeah, I hear that sometimes. I kind of understand the perspective but this has to stop. I mean, this is a big drag in our economy, it’s a big drag in our country. It’s really eluding of the 99% or 97% by the elite and the 1%, the big banks, the big finances companies, the government to some extent, they’re all, I mean, why is that law student graduating with quarter million dollars in debt? I mean, that shouldn’t have even happen in the first place. Why was that debt so easy and why would someone even give a student a quarter million dollars in debt when by all indications, that student is not going to be able to pay that back, in some cases over their lifetime. Why are the allowed to do that in the first place? Why is school so expensive? I mean, these are all issues and some of those issues need to be addressed in this country but the byproduct of all those problems and this exploitation that the masses by the elite is that many Americans are walking out with massive debt burdens on their backs. If some people say “Hey, it’s unfair that I pay everything and he or she doesn’t.” Then I understand the perspective but he or she has to do what’s best for them. The person who cannot afford their debt has to do what’s best for them. If the banks take a hit, really, I have no sympathies whatsoever for Wall Street. I think it’s – the financial products they will allow in many cases are exploitive and they’re not helpful. They’re really creating impossible financial circumstances for many families. They prey on the hopes and dreams and you know, Americans generally are very optimistic. They’re always thinking, “Hey, just around the corner, I’m going to get a better paying job or I’m going to go on Shark Tank and my business is going to be funded.” Something positive, my book is going to be a Best Seller. All these things that would tier off, their debt problems but most of the time, just as often as something good happens, something bad happens. We have to be realistic, if they can’t pay, it has to stop. People cannot drag themselves – kind of wreck their lives. This has to be a contributor to suicides, to open addiction, to drug addiction to drinking, all these negatives on society, many of them are traced to debt.

[0:20:43] Charlie Hoehn: Yes, I 100% agree and the rise of mental illness is now a massive epidemic and granted, it applies to students who don’t have any debt and they don’t even really understand what debt is but it applies to a lot of adults and it is a huge contributing factor. I agree with you 100% there. I understand the rewards of doing this, are there any risks in doing this?

[0:21:13] Jorge Newbery: I mean, huge, what big – everyone has to recognize, you go, you do this, you will end up with bad credit, there’s no question. Your ability to get credit, attain credit in the future will be compromised. Absolutely, you have to realize that this isn’t like, “Hey do this and then go to credit repair and you’re all fixed up.” I mean, over time, you will be able to rebuild your credit but the focus isn’t – shouldn’t even be that, is to get out of debt one time and then try to make your life so you don’t have to take on debt in the future.

[0:21:44] Charlie Hoehn: Can you kind of, sorry, can you kind of explain what having bad credit ultimately means on a day to day basis. I don’t think it really impacts you on a day to day but in major buying decisions, you can definitely feel that, right?

[0:22:04] Jorge Newbery: Sure, when you go to buy a house, when you go to buy a car, when you go to – you want a credit card, things like that, you’ll definitely feel it. But your day to day life, I mean, if you walk around, there’s a lot of people who have bad credit. You walk down the street, there’s a lot of people with bad credit, there’s a lot of people who are slaving away to pay their debt and you really can’t tell the difference. By outward appearances, they’re just regular people.

[0:22:28] Charlie Hoehn: Yeah, and one of the wealthiest people I know by the way also has the worst credit I think of anybody I know.

[0:22:37] Jorge Newbery: No, you have to come to the realization that hey, it’s not essential to have your credit to function, to be successful in society, to be successful in business. Look at it like this, if you pay credit, you’re almost always getting the worst prices. If you buy a house, let’s say you buy a fixer upper house, most of the time, the lenders will say, “Oh the property isn’t good enough condition to make a loan, you have to do some fix up” and so then they’ll be – it’s the only way that home can be sold – let’s say it’s a bank foreclosure for cash. So someone buys that home for cash for a $100,000 and then that’s $20,000 in work. Then sells it to somebody who can finance it with a small down payment and some modest payments and they resell it for $200,000. Now what I really want to be is the guy buying it at the discounted price for cash, fixing it up and then I live there and now I have equity in the house just because I didn’t pay credit. I didn’t use credit to buy it. That applies to houses, to cars, just about everything and you can pay cash. You don’t have to worry about financing. You almost always get the better prices, you have more bargaining power. So people’s perspectives need to change and think, “Hey I can but this slightly used and save massive amounts of money and not have a big debt burden”. So you can still get a car for cash, get a house for cash, maybe a little modest, more modest than what you’re thinking but it saves you from going through these challenges. People always take loans, I mean are always prone to taking loans that are bigger than they can necessarily afford. Because they are thinking things are going to change for the better and in this country today that might not happen.

[0:24:18] Charlie Hoehn: Yeah, why don’t the financial talking heads speak to this? I mean Dave Ramsey promotes himself as somebody who is really good at helping people get out of debt and yet, I don’t think he would ever offer this advice, right?

[0:24:38] Jorge Newbery: No, there’s a lot of people out there – I mean even with the book. Most books to help you get out of debt are going to say, “Hey, you know create a budget, watch your pennies” all these real modest things. That may be good for some people especially once they start out before they’re in a big problem but once you’re in a jam worrying about which credit card has a lower interest, it’s a no consequence. You are in a jam, you are heading for bankruptcy, your car is about to be repoed, your house is in foreclosure, your credit cards are maxed out, your pity loans are going to be debiting your bank account in a few days. What does that person do? And that person represents – there’s millions and millions of Americans in that situation right now and to listen to Dave Ramsey. I have nothing against him but that will help a portion. But the people that are really in a jam it’s not going to help. They will call Dave Ramsey and the only thing they’re going to hear from someone like him is probably, “Oh you need to file bankruptcy” but bankruptcy is not really a great solution. If you have a job, you have to file a Chapter 13 most of the time and that means that you just simply get more time to pay your debt on payments and the creditors can’t take adverse actions against you in the in term. As long as you make your payments. But you’re not getting a discount, you are not leveraging any of the bank or creditors errors. So I don’t see that as really much of a solution. As a result, a lot of people that enter Chapter 13’s end up being unable to complete them and they get dismissed and they’re back where they were. So this is really the solution for any of those families who are in over their heads with debt.

[0:26:20] Charlie Hoehn: So if you had to pick one step that our listeners can take this week to cleanse themselves of their debt, apart from going out and buying your book, how do they get started today?

[0:26:38] Jorge Newbery: They stop paying, as soon as they can’t afford to pay their bills – they stop paying. Everything.

[0:26:43] Charlie Hoehn: The term “can’t afford” I think has too much wiggle room for us to say that as a blanket statement. Can you get specific? And I know you did earlier but let’s drill down a little bit more, when do you know you can’t afford?

[0:27:01] Jorge Newbery: If you’re taking a second job to pay your bills, if you are sacrificing time with your family, just being a normal person… people know. They know when they’re giving up things that they shouldn’t give up. I am not saying “Hey, you should have luxuries” or anything like that. I am saying, hey the person that has two jobs because they are trying to pay off all their debts and they can’t spend time with their kids, that’s a problem. Or their spouse or their significant other or their family. That’s a problem. If you want to take two jobs and you’re single, fantastic. It’s nothing against work but what I am saying is you’ll know whether sacrifices – and your kids starts getting into trouble because you’re not at home, you can’t afford a babysitter. I mean those type of things, little things and then when you’re looking at using your law school graduate – looking at $250,000 in debt you have to take a step back and say, “Okay what is realistic. How am I actually going to pay this $250,000 back?” And let’s not say, “Hey in 10 years I am going to be a big shot lawyer then I’m going to pay it back” say, “Right now with what I have in my view, how am I going to get out of this?” and take a realistic assessment. If you can’t afford to pay it back, it’s not realistic that you are going to get the other side. At that point, you really need to stop paying because what? Again, that’s the first step. Once you stop paying is when the deal starts coming. Because now you’ve actually taken control of the situation because now the creditors are going to try to entice you with a solution at some point and the longer you go without paying, the better deal you are going to get.

[0:28:34] Charlie Hoehn: Yeah, this is very empowering for I’d imagine anybody who’s really looking at a huge amount of money that they are having to pay back and they feel completely helpless. The reason I push back on you is I think people have a lot of strange narratives about what is possible in regards to money right? We all have these weird internal narratives about money. So I wanted to know why or I wanted to know what specifically would be a definitive statement about these people can’t afford to do this. So let’s talk about the people who have read your book, what has been some of the feedback that you have gotten from readers of Debt Cleanse in the types of situations, they’ve been able to work themselves out of or just improve?

[0:29:32] Jorge Newbery: Yeah, I know that I had recently a Facebook message from somebody who had bought a book. A young lady who was now getting married. She says they had put it off because they had thought they had so much credit card debt and they didn’t see how they could get to the other side. So they stopped paying, now they have scheduled a wedding date this fall and they’re actually moving forward with their lives. So an example of someone putting something good on hold because that was an obstacle is now resolved. So that was good to hear. Another gentleman had a student loan – and to be clear, Debt Cleanse has been out for a little over a year. They haven’t gone to the full other side and settled these things necessarily with a discount but they simply, pro-actively stopped paying and moved on with their lives. Now I think Debt Cleanse will provide them the tools and the resources. In order to deal with what happens after you stop paying. So those are a couple, another gentleman in a similar situation, had delayed asking his fiancé to marry him because he had a massive student loan and again, stopped paying. We’ve had families who had been able to use some of the tactics in the book to obtain a modification from their lender where they weren’t previously able to. I know one gentleman in Washington DC had a home loan. He actually called me in, which I’m not encouraging everybody to do, but he called me and said, “Hey, I’m really in this jam, can you look at the documents? I am having trouble” and it was funny. He sent over just a handful of documents, we found some significant errors, sent it back to him and said, “Hey pay attention to this stuff.” I believe the case, many times when these loans get handed off from lender to lender, they make mistakes. In this case it was on the assignments, they named the wrong mortgage holder on one of the assignments and it’s a show stopper if they try to foreclose. So he was going to point that out to his lender. In the meanwhile he was already not paying and that just gave them hope that he was going to be able to get a deal, which is what he did.

[0:31:41] Charlie Hoehn: How did they go about obtaining the paperwork? Is it just as simple as logging onto the website or saving all the mailed documents?

[0:31:52] Jorge Newbery: Yeah, we have a website. At this point it’s free. What you can do is you can use that to generate dispute letters for all types, for all different situations. You can use it if you don’t have your loan documents when you first took the loan, there is a letter to request your loan documents and basically everything you get, we encourage users to upload it. It’s at debtcleanse.com and they can upload all the documents they get from each loan. They can create a profile for each different loan. They can upload documents, log communication with their creditors. So let’s say a creditor calls them at 10:00 at night, they can’t do that and so they would want to put that in there. That’s a violation. That if they ever end up in litigation, they want to exploit. In fact in the book and on the website, we have almost a thousand deficiencies segregated by debt type. So if you have a student loan or a car loan, these are the things that the lender – The mistakes the lender could make, is not all inclusive and we’re adding to it constantly but these are things you can look out for. You can look in the note and see that they do this, this and this. Did they comply with this law? It’s remarkable that you will find that the vast majority of debts in this country, at some point in the process mistakes that we make and more often than not those mistakes can be levered into significant settlements.

[0:33:14] Charlie Hoehn: Is there and how quickly will I be able to settle?

[0:33:19] Jorge Newbery: This is a slow process. It’s not a fast one. People have to stop paying and then they will wait because now you’re waiting for the other, to see what the other side does. They are going to start calling you, they’re going to start sending you letters. You don’t have to talk to them but all the communication and the calls you can log because the longer this process gets drawn out, the more likelihood they will make mistakes. But if you don’t pay for a debt for a year, the discount will be reasonable, but if you don’t pay debt for three or four years like your credit card, now you’re talking that credit cards half a penny or a penny on the dollar that you are settling for. The numbers just get smaller and smaller as time passes and the good news is that you may not have been able to afford the $500 a month for that credit card, along with your other debts, but if you could have afford it $300. Then each month put away that $300, that extra money so people stop paying their bills, now they have extra money what do they do with it? Well they don’t want to just spend it. What they want to do is to set that aside so when the opportunity comes that they are ready to make a settlement, now they have what we call a settlement wallet. They have this money, so they were paying $2,000 a month or a $1,000 a month each month in debt then at the end of the year, they have 12 or $24,000 saved up. Which again, don’t use it for vacation, don’t use it for luxury items or anything like that just let it sit and then when you have an opportunity to settle, settle.

[0:34:51] Charlie Hoehn: So if you had let’s say, $20,000 you stop paying debt, you were paying I don’t know, over a $1,000 a month to pay it off. Three to four years later, you’re settling for you set a penny on the dollar.

[0:35:09] Jorge Newbery: Yeah, you’re settling for 200 bucks.

[0:35:11] Charlie Hoehn: For $200?

[0:35:12] Jorge Newbery: Seriously.

[0:35:13] Charlie Hoehn: Wow, that’s unreal and all you have to do is really ignore calls.

[0:35:19] Jorge Newbery: Ignore calls. I mean they’re still going to take action. Some of them will sue you and at that point that’s when the settlements are probably going to happen. They’re going to sue you. Once you get a law suit, that’s the one time that you will respond. You have to respond usually within 20 days or 28 days. You need to file a response with the court and then you need to show up. You may pay depending on the size of debt and your financial situation. You may or may not at that point decide to get an attorney involved who can assist. But all this time when you’re not paying in stuff you will get threats of law suits but many a times that just won’t happen. Or say, “Hey we’re going to garnish your wages. We’re going to lever your bank account. We’re going to put a lien on your home.” But they can’t do any of that until they go to court and they successfully win a judgment against you. That’s the point at which you’re really fighting back. Using all of these mistakes and deficiencies that you’ve collected against this lender. And using that leverage to settle because ultimately, if they never sue you which is realistic for credit cards, they may never sue you. They may just write it off and sell it to different collection agencies, you may never have to pay.

[0:36:30] Charlie Hoehn: Right and those collections agencies from what I understand are run by mutual funds basically?

[0:36:37] Jorge Newbery: Mutual funds, all types of collection agencies are run by all types but yes, I’m sure some mutual funds back some of them, no question.

[0:36:44] Charlie Hoehn: Okay, yeah. Is there an expert that can handle looking at the mistakes and stuff? Because I’d imagine the average person is like, “I don’t want to go through all this paperwork. I am not going to be able to find mistakes. I don’t know”.

[0:36:57] Jorge Newbery: No, that’s fair. Actually we had that feedback and the number one request we get on our website is, “Hey, I’m in Pensacola, Florida and I need an attorney because I got served with a credit card judgment.” I mean, “A credit card lawsuit or a lawsuit on my home for foreclosure”. So that is our number one request so actually what we are doing right now is we’re setting up a network of attorneys throughout the country. Who are training in Debt Cleanse tactics and because this is definitely not stuff that you get taught in law school. But basically you’re asserting your rights as a debtor and using those rights to gain leverage over your creditors and settle these debts at discounts. So we’re building this network and eventually that will be available through the site. So right now you can sign up. You can use the tools for free. If you need an attorney, we will have – I am hoping that is in a couple of months – we’ll have attorneys at every state that would have been trained and then that will allow to do just what you said, now those attorneys will help. Okay, so now, “I’m in trouble, I am getting sued. Here’s an attorney, here’s all my documents, here’s all the phone calls.” Actually everything’s that saved to Debt Cleanse – what we are building is functionality so that you can share that loan that’s with City Bank with your attorney. Instead of emailing or faxing them the documents, you can just give them access to your debt profile and they can see all the documents you’ve saved, all the communication, the correspondence They can then look for deficiencies and use those to gain leverage against the creditors.

[0:38:30] Charlie Hoehn: Wow, this is phenomenal. You have done a real service I think and it’s going to be very important I think to get this message out. So normally I ask, what is the best way our listeners can connect with and follow you, which you have already answered. So what is really your dream for this book and your message in getting out there? What is your ultimate vision for it?

[0:39:01] Jorge Newbery: I really want to get – I mean I’ve been there and in massive debt problems and I had no – I would actually call attorneys and I’d schedule meetings and go in and say, “Hey what do I do? I owe all these money, what do you suggest I do?” and there were literary attorneys who would say, “Okay” they’d ask me a couple of questions. Questions like, “Well did you get the money?” and I’d say, “Yeah”. “Did you sign the paperwork?” “Yeah” then they say, “Well you have to pay it back.” I mean what’s the dispute here? I mean they’d take such an unhelpful view and so I really want to get the message out that families who are in this predicament or individuals who are in this predicament that there is an alternative and not every attorney is going to have the right answer. That there really is an alternative which is simply stop paying and getting leverage in order to settle this at discounts. Or in some cases, simply not pay them at all. That is definitely an option. I works over and over and there’s millions and millions and millions of people in this country who have this problem. This in my mind and I have been there is the absolute best solution. I emerged from it and I think other people can too. So I am really on a mission to spread the word and help other families, other people, help Americans who are crushed by their unaffordable debts.

[0:40:23] Charlie Hoehn: Yeah, so final question. Apart from getting out of debt what is your number one stress management tip? Because I’d imagine you had to find ways to keep yourself physically healthy during these times.

[0:40:40] Jorge Newbery: Yeah, it was a bad time. I run, luckily I am not a drinker, but I run. So that was my – luckily because I would really have some problems if I had other preferences. So I would run and that’s a great stress reliever and it doesn’t have to be running. It could be playing tennis, it could be working out, going to classes, yoga or whatever. But something physical I think that allows your mind to break free of the day to day beating that it gets, if you’re in this predicament. It’s always in your mind, it’s even when you sleep, it’s there. The first thing when I wake up in the morning is go and look at my bank accounts. Because just to survive, some things you have to pay, like utilities or whatnot. I go and see hey did all my checks clear? Because there was often times I was hoping for more money to come in and it didn’t come in on time. I have already written checks. So it was a bad time and your life gets engulfed with how am I going – You feel like you’re drowning and you’re just trying to stay afloat and alive. I think any kind of physical exercise is really helpful to getting through that, those tough periods.

[0:41:55] Charlie Hoehn: Well this has been fantastic and so high value, so thank you so much for sharing this and for writing this book.

[0:42:04] Jorge Newbery: Yeah so I appreciate you having me on. I hope that some of the information we shared will be useful for some of your listeners that are struggling with their debts and that this will be a catalyst to solutions for them.

[0:42:17] Charlie Hoehn: Many thanks to Jorge Newbery for being on the show. You can buy his book, Debt Cleanse on Amazon.com. What did you think of Jorge’s methods for getting out of debt? Let us know by leaving a comment at authorhour.co or you can go to Facebook.com/authorhour. Thanks again for listening to Author Hour, enlightening conversations about books with the authors who wrote them. We’ll see you next time.