How One California Man Negotiated His Way Out Of $150,000 Worth Of Debt

kenny

Photo: Kenny Golde

In 2005, indie film screenwriter Kenny Golde’s finances were in nothing short of mint condition.”I had less than $10,000 in credit card debt, more than $100,000 in unused lines of credit, a FICO score over 800, and about $100,000 in savings even after the downpayment on my home,” he says. “I even adopted a dog.” 

Then the bottom fell out. Within a year, a perfect storm of financial and professional mishaps would carry him down a seemingly never-ending rabbit’s hole of debt. 

By his fortieth birthday, he had amassed a staggering $220,000 in credit debt and spent his days sparring with debt collectors, dodging lawsuits and doing all he could to keep bankruptcy at bay. 

That was until an attorney steered him toward a path he never thought he’d travel: Debt settlement––essentially negotiating his debt directly with lenders. 

“The journey took me about a year and a half,” Golde writes in his book,
The Do-It-Yourself Bailout.” Now “I have reduced my debt … to zero.  I have done this legally, at a fraction of the cost of the debt itself, and I saved just under $150,000.” 

Screenwriter Kenny Golde paid $170,000 in 2008 to finance a movie

Meanwhile the Writers Guild strike left him out of a job

To cover the project, Golde took out seven new lines of business and personal credit at six different banks.

'I was carrying around $3,600 per month in minimum credit card payments in addition to my mortgage and regular monthly expenses,' he writes. 'I was scared.'

He was also out of work. The Writers Guild of America and Screen Actors Guild were both in the thick of wage strikes at the time and the job market in film had tanked. Within six months, his savings would be depleted.

It was such a sudden and drastic lifestyle change that Golde says it was all he could do not to succumb to depression.

'In addition to my sense of failure, I was self-judgmental,' he writes. 'How could I be 40 years old and looking at bankruptcy?'

$220,000 in debt, Golde had two options: filing bankruptcy or fighting off the lenders himself

His personal life in tatters----Golde blames his financial funk on the demise of his love life at the time----he took his family and friends' advice to meet with a bankruptcy attorney.

'I call it a context change,' he writes. 'I changed my context from depressed and emotional to 'This is the mountain I'm on and I'm going to ski it as best I can.''

He was ready to file bankruptcy, but the attorney had another idea: debt settlement. As Golde learned, banks were willing to settle debts for a fraction of their total value if consumers are unable to make payments.That's because it's more lucrative to them than selling the account off to debt collectors, which pay as little as 5 per cent of the balance.

He prepared to battle the banks

It was a crash course in tele-negotiating

After months of abuse, he nailed his first settlement

He played smart. Golde NEVER paid until he received a signed letter of agreement from the lender. Here's what each letter should contain: a statement that payment was made in full; that no further collections or legal action would be taken; and his account number and name.

He dodged a lawsuit by settling another account

Eventually, he could charm cash right out of the debt collectors' hands

Fresh from his courtroom victory, Golde balked when another debt collector offered to settle a $39,000 account for $10,000.

Since he had only $10,000 left, the deal would clean him out. He decided to take a different approach with the collector this time: He asked the man how his weekend was.

'I'm sure he got on this call expecting a battle,' Golde says. 'And instead he was reminiscing about a great weekend with his sons.'

By the time he hung up, the collector had happily accepted Golde's lowered offer of $7,400. He had saved $2,600 on charm alone.

After shelling out $7,400 to settle the last account, Golde was forced to tap into his savings to keep negotiations rolling. Next up: A $23,000 account.

When he offered $6,000, the bank representative declined. Then she paused.

'Wait a moment...I have seen them do what's called a below blanket settlement,' she said.

She was referring to cases in which banks go below their lowest settlement floor, something typically reserved for customers who can prove they're in real dire straights financially.

Golde settled for three monthly payments of $3,100.

Hollywood came to his rescue again

'Finally, to maximise my ability to buy food and gas for the car, I stopped making payments on my last two credit card accounts,' he says. 'Even though I didn't have the money to settle.'

Soon after, he learned an earlier script of his was slated for filming. He pocketed $16,000 from the shoot and settled one of his cards for $5,000.

He still had one lingering $15,000 left to pay, and Hollywood came to the rescue again.

Selling another script was enough to carry him across the finish line

He has zero regrets

Paying down debt is no small task...

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