How and Why Debt Inversion Works

Debt Inversion is a proprietary legal practice of the LeNoir Law Firm designed to turn debtors into creditors by defeating debt collection actions and aggressively suing debt collectors, creditors and the three national credit reporting agencies for violations of your legal rights under federal and state debt collection laws, credit reporting laws and criminal laws. Successful debt inversion allows you to recover monetary damages greater than your debt, so that you make a profit.

The LeNoir Law Firm employs a comprehensive, three-part approach to successful debt inversion:

PART 1: ADVISE

We conduct a complete examination of each new client’s legal and financial circumstances to determine which legal services and strategies will be most beneficial. In certain cases we advise the client that the best strategy is to ignore the debt collectors and do nothing at all — at least for the time being.

If you ignore a debt collector, and the debt collector doesn’t sue you (most don’t), the debt disappears from your credit report, as if it never existed, exactly seven years from the date of your last payment.

Of course, ignoring collectors’ letters and phone calls does not prevent you from suing them for monetary damages for violations of your legal rights. See “Attack” below.

Just as importantly, we warn our clients against debt “solutions” that usually do more harm than good. These include Bankruptcy, Home Refinancing, Debt Settlement, “Credit Repair” and Credit Counseling.

In addition to wasting your scarce money, these strategies can have extremely undesirable consequences such as causing you to lose your home; extending the time period the debt owner has to sue you (the statute of limitations); or lengthening the amount of time that the debt will remain on your credit report.

For example, if you file for bankruptcy, the bankruptcy can remain on your credit report for over 15 years from the date you file. See Bankruptcy. This means that a bankruptcy filed in 2011 can remain on your credit report until 2026 or later.

PART 2: DEFEND

After analyzing the client’s financial and legal circumstances, we take care of matters that require immediate attention, such as eliminating default judgments, termination of wage garnishments, and removal of liens on real estate, financial accounts and other property.

Once the case is on track, we defend our client by forcing the attorneys for the creditor or debt collector that owns the debt (“the collection attorneys”) to produce all documents and witnesses necessary to prove the amount they claim is owed.

Producing all of the necessary paperwork and witnesses is usually impossible or not worth the effort for the collection attorneys, especially since most defaulted debts have been sold from one debt buyer to the next.

The current owner of your account has no power over the employees of the previous owner; nor does it have access to the previous owner’s business records. This means that the collection attorneys must subpoena the records and employees of all of the previous owners of the debt — something they almost never do.

Even if the collection attorneys disregard their usual business practices and serve all of the necessary subpoenas, inevitably one or more of the previous debt owners will have lost or destroyed its records of the client’s account; or employees who kept records of the client’s account for previous debt owners will no longer be employed by them; or one or more of the previous owners of the debt will ignore the subpoena.

This means we win the case because the debt collection attorney is unable to produce the documents and witnesses necessary to prove its client’s case.

In those extremely rare cases in which a collection attorney is able to produce all necessary documents and witnesses and prove in court that you owe the amount claimed, assembling everything they need takes quite a long time.

This allows you to avoid a judgment against you and/or stay in your home much longer than if you did not put up a fight.

In fact, the debt collection business relies on people not fighting back. If everyone put debt collectors to their proof as we do, they would all be forced out of business.

PART 3: ATTACK

Lawsuits for Illegal Debt Collection: All debt collectors break federal and state debt collection laws, credit reporting laws and criminal laws that have been enacted to protect unsophisticated debtors from overly aggressive debt collectors. When debt collectors violate your legal rights, federal law allows you to recover up to $1,000 or your actual damages, plus legal fees and court costs.  You may be able to recover additional amounts under state laws.

Lawsuits for Illegal Credit Reporting: We sue the three national credit reporting agencies; creditors and debt collectors who provide false information to credit bureaus; and companies that misuse information provided by credit bureaus, for violations of federal credit reporting laws. You can recover up to $1,000 or your actual damages for each violation, plus punitive damages, attorney’s fees and court costs.

If you win the lawsuit (or obtain a favorable settlement) and collect monetary damages greater than your debt, if any, you make a profit. This joyful experience is known as Debt Inversion.

Debt Collection Crimes: Many violations of debt collection laws are also violations of federal and New York State criminal laws. In cases of serious misconduct, we refer the creditor or debt collector to federal or state authorities for criminal prosecution, in addition to suing them.

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