Dangers Of Credit Card Debt With Tommy Kilpatrick
Do you really know how your credit card works? Think you're getting a loan? Think again. In today's powerful episode of The Worldwide Threat, we're diving deep into the hidden dangers of bank-issued credit card debt with expert Tommy Kilpatrick. As a writer, analyst, and business leader, Tommy shares his shocking personal story of how he beat the banks and uncovered a truth that could change everything you think you know about credit cards. From fraudulent contracts to legal loopholes, we're exposing the tricks banks use to keep you trapped in debt. Tune in, because what you hear today could save your financial future!
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Dangers Of Credit Card Debt With Tommy Kilpatrick
How To Win Against Credit Card Suppliers
We have a very powerful episode talking about how bank-issued credit card debt is dangerous. Our expert is Tommy Kilpatrick, who is a writer, an analyst, and a business leader. He's going to give us the heads up on what banks are doing with credit cards when they issue them to you. Thank you for inviting us into your life.
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This is John White with The Worldwide Threat. We have a powerful episode where we're talking about bank-issued credit card debt and how it's dangerous with a gentleman named Tommy Kilpatrick, who knows all about this. Welcome to the show, Tommy. How are you?
I'm doing fantastic. Thanks so much.
It's good to have you. I know you're on the other side of the world, and that's good and bad. The first thing I'd like to ask you is, tell us a little bit about your story and how you got interested in credit card debt and that whole thing that you talked to me about the other day.
I'm an author, and I wrote a book about health and healing. It was so successful that an infomercial company contacted me, and we signed a contractual agreement. I was on the radio for about six months doing interviews and showing that the book would sell in an infomercial. I had to use my three credit cards to pay for my living expenses because I was promised $100,000 a month once the infomercial hit. Things were going great, and then one of the talents, who's another author, had lied about his claims of weight loss. The FTC came down on him and the company, and the new talent all got fired. I was stuck with $85,000 of credit card debt.
Tommy's Story Of Falling Into Debt & How He Challenged It
It was a shock, and then what do I do? I was depressed. How am I going to deal with this? One morning, I woke up. My dad was a CPA. I had been in college to be a CPA, and it dawned on me that the bank-issued credit card was never a debt. Instead of doing the quick little, "I'll send a letter to the bank, and hopefully they won't sue me," I took the initiative and filed three separate federal lawsuits in Los Angeles court. You might ask, "Did you win?" What you call winning is that the jury judgment, a judge slams a gavel down, and I win? No, he threw the cases out. Okay, then you lost.
He threw my court cases out, but my credit report all of a sudden showed no debt, $85,000 gone, no derogatory items, and I never received a 1099-C. If you borrow money and you don't pay it back, the bank will notify the IRS that you got a gain of let's say $100,000 or $1 million. Now, you have to pay income tax on it, and they take a tax deduction. In my case, they didn't take a tax deduction because they never issued a 1099-C. I have had the experience firsthand of how to beat the banks on the bank-issued alleged credit card debt. That was my little story.
That's very cool. I think I told you when I was on the phone, in my younger life, I owned the National Collection Agency, and I probably collected from people who didn't pay credit card debts at one time. I never knew anything about this. The thing you disclosed the other day, which was cool, is that, and I was talking to friends about this, when you get a credit card, you never sign anything. You fill out an application, and they tell you how much your rate is and how much credit you're going to get.
You use the card or get the card, but you never sign a loan document or anything, which I thought was brilliant information coming from you, because nobody tuning in to this episode is going to know this. This is amazing information. That's why I call it powerful information. My next question is, please give us a couple of key things that you've seen banks do, and how they threaten people's credit with this idea. What are they doing?
This is what happened to me with the federal lawsuit I filed. The judge said to me, "Mr. Kilpatrick, did you get a credit card?" "No." "You didn't get a credit card?" Made me sound like I was an idiot. I said, "Let me start from the beginning." "I'll let you start at the beginning, but I need to answer this question. You need to answer it." I would say, "No, I didn't get a credit card." "You're an idiot." He threw the case out. It went a little longer than that. It was pretty intimidating to have him do that. I stood my ground.
On the other side, the banks knew what I knew, and they would never have been able to win. They start off with a lie, and everyone believes it. They take you to court, and they get judgments against you. The courts are all accepting this. All the attorneys know this. You, as a debt collector owning a debt collection company, all knew that these were the facts, but no one had ever gone to an accounting class. The first thing they said is that what accountants do is count. You cannot open a bank account without counting because that's what the word count means. A means one or single. Count means you need to count.
The first time that you ever made what you thought was a payment on this bank-issued alleged credit card, you were making a deposit. Most people don't know that because if you go to accounting class, the very first one in the section of banking says that banks are all about loans. You make a deposit. You're loaning the bank money, and they pay you interest on it. If you want money, you go and apply for a loan. What if they rejected you? If they rejected you, would you still get the loan?
The first time you made what you thought was a payment on a bank-issued alleged credit card, you were actually making a deposit.
If they accept you, then what do you do? You've got loan documents to fill out. You have to prove your income to be able to pay this back. You have to have collateral, something that you're going to give up if you don't pay. You have a credit report. Your credit score determines your rate. The last thing is that you have to sign a promissory note. That's a promise to pay. That's based on the Federal Reserve manual that we read in our first class called Modern Money Mechanics. It's easily available.
Banks Don't Create A Legal Loan
The first time you type that up, you'll see it's Wikipedia. You click on that. You download the manual. You read the same book I read on page six. It says that what banks do is you sign a promissory note first, and then they write numbers into your free checking account. I simplified it, but that's the way the legalese and the attorneys had tried to confuse you. It's very simple. You have to sign a promissory note first, then they write numbers into a bank account. They don't create any money at all. They don't borrow any money because they can't.
How they come after you is that they've got the whole system rigged against you. No matter what you try to do, if you go the normal way and make some wild, crazy claims, and I've seen lots of different ways of trying to do it, the bottom line is they'll sue you. They'll take you to court. They'll win because you don't show up. If you do show up, what's your argument? It's completely ludicrous to argue that you don't owe the money because you say it's a debt. I hope I answered your question.
The guys that sent out an email and say, "You can get this credit card from whatever bank or whatever company." You say, "Okay, I'd like to apply for that." You fill out the boxes, give your name, give your social security, and so forth. They come back instantly and say, "Guess what? You're approved for a $10,000 credit with XYZ bank." Is that considered a legal debt at that point?
There are two things. You say the word debt, I would say it's more like a loan. I will send you a link, and you can put it in your show notes. You do a simple Google search, and you look for the legal sites that will tell you that banks cannot legally loan you money. What they do is they're trying to get you as a customer. They used to give you a toaster, but I had my own personal experience as a bank said, "We're looking for more customers, come in and get a deposit of $25. In 90 days, we'll match it." I said, "Great." I went in, deposited $25, waited 90 days, and I saw $50 in my account. The next day, I closed my account. Did I rip the bank off?
Banks cannot legally loan you money. What they're actually doing is trying to acquire you as a customer.
No, because they promised to give you $25 for opening an account.
I followed what their offer was. Do I owe them back the $25?
No, I guess not.
No, it wasn't a loan. It was an offer to get me to come in. That's the same thing they're doing to you when they say we have $10,000, $100,000. I met one guy who had $750,000 of credit card debt. I said, "How'd you do that?" He said, "I got 30 cards at $25,000 each." I didn't have this particular program. I was working on another guy's system where you send a check in for $1 and say, "If you deposit this, this is considered payment in full." The courts don't accept that. They laugh it off. This guy never went with me at all.
Now, with my program that I have figured out with the injunction, this is effective. What the bank does is it tries to get you in as a customer. Once you say yes to their offer, they give you a gift card. It's like the bank had given me $25 to get me as a customer. They are sending you out $10,000 credit card, but it's not a credit card. It's a gift card. You didn't sign anything. There's no contractual obligation. If you use the card, then you have to follow the terms and conditions. The Supreme Court has ruled over and over throughout the history of our country that any fraud undoes all contracts. I'll send that link to you, too.
We have the Supreme Court on our side, that you cannot deal with a criminal. The courts are not set up for a criminal to take you to court to win. That's what the banks are doing. When you get your gift card, you use it. You went out and you bought, let's say, a toilet at Home Depot. It's a golden throne. You have a receipt when you walk out because they will have somebody standing there might be by the door, and verify that you have a paid receipt. Yes, your toilet is paid for. Are you going to get an invoice from Home Depot in 30 days to pay for that toilet? No, because you have a signed paid receipt.
When you have a normal checking account, when you get a statement every month, is that a bill? No, it's your checking account statement. It's your transactions, and you verify they're correct. If there's a problem, you can notify the bank, "There's something going on wrong here," but you received a statement from your free checking account for your bank-issued alleged credit card. It takes a lot of words to explain it, but you have to be clear that exactly what I'm saying is bank-issued.
What happened is that you sent in a $500 check because you thought it was a bill. That is the first time the bank could count your money. When the bank counts your money, it puts it into your checking or savings account. This happened to be a checking account from which you don't get any checks. The only way you can access your money is through your debit card, disguised as a credit card. Even though it says credit card on it, the very first time you received it, it was a gift. It's a gift card. Once you made a payment to the bank that you thought was a payment, it was actually a deposit. You're loaning the bank $500. Now, you have your account, and the next purchases are all done with your own money, so there is no loan.
Let's say a bank issues you a gift card for $10,000 or whatever, and you go use it, you go buy your golden toilet, they send you the statement, which they call a bill, and you don't pay it. If you don't pay it and you don't send them any money to go into that account, now they're sitting on $10,000 of digital money they sent somewhere. They say, "Okay, John White, you're in default of this $10,000 credit card. Therefore, I'm going to demand payment through collection or lawsuits."
When they do that, the next step is they send out a nastygram, send out a letter, or whatever they do. If I don't pay, then they'd give it to an attorney, the attorney files suit in XYZ company or county for $10,000 against me for not paying my credit card that they're calling it. I show up, and I say, "Look, I don't know that. It was never a credit card." The judge is going to go, "You're nuts. You took $10,000 of their money and bought your golden toilet." In your studies, you got a free book or something out here on this. Did you get out on this thing?
Yeah.
The average human goes nuts and goes, "Okay, I think I owe them $10,000." Based on what you're saying, you don't owe them $10,000. Is that correct?
Language & Legal Framing In Credit Card Lawsuits
That's absolutely correct. If you walk into that court and you say you have a credit card debt, the language is all about the law. Law is all about language. If you say you have a debt, you've got a debt and you're screwed. There's nothing you can do. We've seen on TV, the bank robber going into the bank, he drops his wallet. They show you on TV his driver's license. You know it's his name. The news still says he's an alleged bank robber. That's the whole idea. If you start to say it's alleged, now they have to prove it. That's the difference between a bank-issued alleged credit card and a real credit card. Let me tell you quickly about a real credit card.
Language is all about law. Law is all about language. If you say you have a debt, you've got a debt and you're screwed.
You go into a tire store, they sell you tires, and you say to them, "I'd like the tires. My car needs it. I'm about to die because of bald tires, but I don't have the money for that, and for you to install them on my car." They say, "No problem, sir. Do an application for an in-store credit card." Great and instantly, you're approved. Fantastic. You've got tires on your car, and in 30 or 40 days, you'll get a bonus check, or you'll get your paycheck, and you'll pay off the loan. You paid off the tire store bill. It was an invoice. If you ask for an invoice from a tire store, they can provide that for you. They show the court, "Look, sir, he came into our store. He applied for a credit card. We gave it to him. Here are the tires. We put it on his car. He drove away, and he didn't pay us anything. He owes us the money." The bank says, "Plus court costs and attorney fees," and bang, you lose because that's a true credit card.
Filing A Proactive Lawsuit
However, if you don't ask for this upfront with the bank suing you, that's where they win every single time. I've figured out a more proactive way. For people who have $10 million, $20 million, $30 million, up to $100 million of credit card debt, the best way to go is to file a lawsuit. Right there, I scared everybody. For most other people with a lower amount, when you send my letter to the bank, it lays out exactly what is going to happen. If they sue you, you are able to file a counter complaint is what they call it. In that counter complaint, you're going to be asking for an injunction.
You're going to be asking the court to demand that this person, who has come to court and thinks that you owe money to at least provide the evidence. You're allowed to ask for the evidence. You're asking for an invoice, and you're asking for a promissory note because they're going to argue with the judge, "He spent this money at this store, and they owe us for that purchase." The other side, "We gave this person a loan." Where's the loan document?
In an injunction, if they're not able to provide that within a certain time limit of the court, they're about 30 days, they are now in contempt of court. The whole process stops because they can't provide the proof of the debt. They know this. What they do is like what they did with me. They wipe it off your credit report. Don't issue a 1099-C and leave you alone, but on the other side, you've got half a million dollars of credit card debt. If you say debt, you blow it. If it's a bank-issued alleged credit card and you follow my process, because you're going to have a company like with a CPA as your CFO, you can fight this with the final lawsuit against the bank like I did. This time, you include all the discoveries. You've already got a date set for their deposition. Normally, it's about ten days after they respond. You're allowed to do a deposition. You've already got the paperwork dropped on the bank's attorney's desk.
They're looking at, "This discovery is going to take us this number of hours. We're already into a $20,000 or $30,000 to defend ourselves. I see that he's going to file an injunction." You can't file the injunction until they answer. If they answer the complaint, you're already sending in the next day the injunction to the court. They've already seen what you're going to type up and send to the court. For the most likely, these banks are going to back off even on half a million dollars of alleged credit card debt.
That's amazing stuff. If you file a suit against them and they don't respond within 30 days, then you have a default against them.
Absolutely. You don't win automatically. The judge can look at it, but you don't want that. You want your credit report clean. You don't want a 1099-C. That's the only two things you want, them to go away and leave you alone.
That's amazing. This is a lot of stuff for the average human to unpack, that's sitting out there on $20,000 in debt. There are all these companies out there that do what they call credit repair. This is a whole new wrinkle in the world of credit cards. I'll tell you this. I think I told you this on the phone. The reason I do these Worldwide Threat podcasts is for two reasons. One is to show people about a threat that's going on and try to give them some peace from an expert about how to get peace about that threat.
I think you know that this country alone, the United States, is over a trillion dollars in what they call a credit card debt, which is a lot of credit card debt. That represents a lot of people who are stressed about their cards. The thing that we try to do is to have some peace for the people who are watching this through our action guide. In the action guide, when we get done, we're going to create an action guide about this that anybody can download for free.
At that point, I'll get your links and stuff and put that in this action guide. They can download this for free, learn about this, and go back to whatever website you want, or however you want to, if you do webinars or whatever to talk about this, so some people can get some expert advice about this. I'm not trying to make it so banks don't get paid, but at the same time, maybe it'll help people from losing their minds over stuff. With that being said, in the last couple of minutes, tell me what you would say to my audience about how to have peace about all this.
First of all, what they're going to find is a landing page. If they go to the landing page, I have a free book for them about this whole generalized idea of solutions. It's also going to warn them about those debt consolidation companies. There'll be a link there with Dave Ramsey telling you that these people don't pay your credit card debt, because remember, he's saying debt, you owe it, you say the word debt, you owe it, too. There are these companies that will not pay, you pay them, and you're actually in pre-bankruptcy.
When you sign up for those programs, they put it on your credit report that you are warning all the other banks, don't give this person any more credit cards because they're going to go into bankruptcy. That's usually what they do. They never come out of these programs very well. You're going to be spending money on a company that's stealing from you. What you do is you can sign up for a free 15-minute consultation with yours truly. I'd be happy to talk to you. It's all free. I'm not there to pitch you and sell you something. We can talk about your particular situation. If you do that, I will give you my $69 book on Forgive and Forget: How to Nuke Your Credit Card Debt. I'm going to give you a free book and a free consultation.
We can talk because what I'm looking for is a company with, let's say, half a million dollars of credit card debt. They've got a CPA who can be the expert witness. They have an attorney who's their vice president. Let me talk to them. The next day, they could be filing a state lawsuit. In less than 45 days, they're going to have all that alleged bank-issued credit card gone. That's where I could be compensated or something like that for my expertise. For all the other people, it's simply a letter. I can explain exactly what it is. My book shows you what to do. All it is is forgive and forget the little ones, the banks are not going to come after you.
It is a shell game in some respect with them, it looks like. That's good information. I appreciate that. I hope that YouTube and everybody don't ban me for this particular episode. We are looking at those threats. I appreciate your time. I know you're a very busy man, and you're up early for us. I appreciate it. I hope you have a blessed day, brother.
Thank you so much.