50 Ways to Leave Your Banker

By Kimberly Thorpe
Mother Jones

At last count, Steven Katz owed $80,000 on his six credit cards, and he has no intention of paying any of it off. In fact, he’d like to show you how to be like him—a “credit terrorist” in open revolt against the banking system. (Image by Christoff Hitz)

Katz is the founder of Debtorboards.com (“Sue Your Creditor and Win!”), a five-year-old online forum where he’s collected countless tricks and tactics for evading and repelling persistent creditors. He’s written how-tos on shielding your assets from seizure, luring collection agencies into expensive lawsuits, and frustrating private investigators looking for debtors on the run.

He’s even infiltrated the bill collectors’ forums, where he’s been tagged a “credit jihadist” and his site’s been called a “credit terrorist training camp,” a label he embraces. “Debtorboards is one of the biggest and most successful temper tantrums ever,” the 59-year-old Katz boasts. The site has more than 10,000 members—double what it had in 2009.

Katz wants the millions of Americans buried in debt to stop feeling guilty about not honoring their obligations. “People are brainwashed to think that paying a credit card is more important than paying for the necessities of life,” he says. “Business and morality have nothing to do with each other, according to the bankers.” One of Katz’s mottos is “No one ever went to hell for not paying a debt.”

He wasn’t always an unrepentant debtor. When he first spoke to me from his tax and accounting business in a strip mall in Tucson, Arizona, he recalled how his first job in the ’70s was tromping through Brooklyn making collections for a small loan company. He once threatened to take a woman’s kids to an orphanage if she didn’t pay her bills. He wasn’t serious, but it worked.

The tables were turned in 2003, when a collection agency came after Katz for a debt that had been written off when he declared bankruptcy a few years earlier. The collector wouldn’t relent, and Katz’s credit score tanked. Outraged, he turned to the internet, where he learned how to go after debt collectors for violating consumer protection laws. Eventually, the collector paid him $1,000 in damages. Katz framed the check with the caption“The Steven Katz school of bill collector education is now open for business.”

The Financial Anarchist’s Cookbook

Some of Steven Katz’s tips for driving creditors crazy.

Tape everything. Record your calls with collection agents (if it’s legal in your state). When they say, “We can seize your car to repay a credit card bill,” you’ve caught them in a violation of the Fair Debt Collection Practices Act. Sue, and you could collect up to $1,000 plus damages.

Get it in writing. Under federal law, if debt collectors can’t provide written proof of a debt on request, they can’t collect it. If they try to collect anyway, sue them.

Make them bleed. If you get sued, fight back. Countersue for something like loss of consortium (i.e. being too distressed to have sex with your spouse). Drive up creditors’ legal costs to the point where it’s cheaper to settle—or just leave you alone.

Flood the system. Hide from creditors by seeding their databases with bad data. Apply for 20 credit cards a month using different addresses.

Move your money. Transfer your assets to an out-of-state bank account, or buy money orders or traveler’s checks, which are harder to track down.

His tactics may be extreme, but Katz is not alone in his quest to evade the banking system. More Americans than ever are unable—or unwilling—to make good on their debts. Since 2008, banks have “charged off” a record $90 billion in credit card debt—taking it off their books as unlikely to ever be repaid. In the past two years, major banks charged off more than 10 percent of all consumer credit card accounts, on average—two times the pre-recession rate, and the highest in US history. The number of consumer lawsuits filed against collectors, like those Debtorboards encourages, has grown 122 percent since 2008. A backlash against the big banks is ballooning—from the California woman who made a popular YouTube video urging people to stop paying their credit card bills as part of a “debtors’ revolution” to the “Move Your Money” campaign, which encourages consumers to move their money to local banks or credit unions.

While it’s easy to hate the big banks and credit card companies, it can be hard to quit them cold turkey. Katz knows this well: After going bankrupt, he went back into debt to finance the growth of his tax business and renovate his home. By early 2010, he and his wife owed upwards of $40,000 on six credit cards. They diligently made their monthly payments. The 6 percent APR on his Wells Fargo Visa tripled; his other cards’ rates followed. (Banks surprised many customers with higher rates and new fees in response to 2009’s credit reform law, which limited rate hikes.) He called Wells Fargo to lower the rate; the bank refused. He says he started to pay down the balance, but then it looked like his wife was about to lose her job.

So Katz started planning his final escape. His wife found a job teaching English in Shijiazhuang, China, and he decided to join her. “I’d been fucked over by the banks,” he says. “I was treated like a deadbeat even though I wasn’t. And my attitude was, ‘If you’re going to treat me like a deadbeat, goddamn it, I might as well be one.'”

He stopped paying his bills and took out the largest cash advances possible, transferring $38,000 to an account in China, where it would be virtually out of reach from American banks. Of course, in the States he’d still be on the hook for his debts, and he could face fraud charges for taking the money with no intention of paying it back. But Katz says he has no plans to ever come back.

Last August, he began his new life as an “international deadbeat” by buying a first-class one-way ticket to China—with his credit card, of course. Talking on the phone from his new three-bedroom apartment, he recalls how his wife and son met him in Beijing, handing him two collection letters that had already arrived at his new address. He opened them on the spot. “In the middle of the airport, I’m laughing my head off, and I just take one of them and wipe my butt with it.”

Read more: Can You Mail a Brick to a Bank?

Kimberly Thorpe is a freelance writer who teaches journalism at the Metropolitan State College of Denver.

One response to “50 Ways to Leave Your Banker

  1. Interesting insight into psychosis and consumerism. The privilege of maxing out credit is consumerism and the psychosis of privilege is also consumerism. The entitlement to borrow without paying if extended across the entire culture-eg right now from top to bottom-has collapsed the economy of the world. It is not suficent to have nuclear weapons, now the citizen must go nuclear as well to show they too are insane.

    Submitted by Charles Hugh Smith from Of Two Minds

    Our Fragile “Hothouse” Economy

    Financialization has led to a “hothouse” global economy where the slightest disruption in central bank/Central State intervention will cause the sickly flowers to wilt and expire.

    Of the three great financial truths that have been left unspoken for the past four years out of sheer dread, lest their mere mention collapse our economy, let’s start with the most obvious: if the Federal Reserve and Federal government ever crimped the dripline of “easing” and bailouts, America’s financial sector would promptly roll over and expire.

    Does this strike you as a robust, flexible, transparent system? Of course not. Rather, it is a “hothouse” financial sector, one that needs constant injections and a carefully controlled environment just to keep it alive.

    And since the U.S. economy has been fully financialized, it is now dependent on financial machinations and skimming for its “growth,” profits and the debt expansion that fuels everything else, including the metastasizing Savior State, a gargantuan aggregation of an unaccountable National Security State with crony-capitalist cartels and a dependency-inducing Welfare State.

    Without the debt conjured into existence by the Fed, Treasury and the financial sector, even the mighty multi-tenacled Savior State would quickly starve.

    As a result of our dependence on financialization and exponential debt, our entire economy has become a weak, sickly “hothouse” economy which can only survive in a narrow band of temperature, debt injections and opaque manipulations of data and what’s left of the nation’s shriveled markets.

    Once exposed to Nature, i.e. “wild” transparent markets that are allowed to discover the price of all assets naturally, then both the nation’s financial sector and its economy would implode.

    The second great financial truth is that the financial sector has long been detached from the real economy. The real economy is for chumps; the “no-risk” skimming of monetary legerdemaine is the raison d’etre of the entire financial sector, a point brilliantly made in this “must read” essay posted on Zero Hedge: MF Global Shines A Light On Monetarism’s Incapacity To Enhance The Real Economy. Granted, some of the financialization schemes described are not that easy to grasp, but here’s the primary point:

    That is why this system has to change at some point. It is exactly designed to be misleading, and the reason is so very simple. In any fractional system there will be a desire to amplify that fraction to the maximum degree. But in doing so, participants recognize that the process of maximization entails creating negative human emotions and perceptions since history is not really that kind to this manner of fractionalization. So the system has institutionalized, abetted by the very regulators that are supposed to cap fractions and leverage, these methodologies of hiding just how much financial entities have engaged in maximizing themselves under the cover of mathematical precision.

    The Panic of 2008 was supposed to correct these excesses and remedy the fact that risks have not been accurately priced for decades. Yet the system has resisted every effort, simply settling for redefining the appearance of safety yet again. Somewhere in that mathematical pursuit of maximum fractions, the very goal of finance changed, as if traditional banking was no longer sufficient to support the pursuit’s ever-growing ambitions. So the financial economy has broken away from the real economy, using the ironic cover story of enhancing price discovery to the process of intermediation.

    The fact that money is disconnected from the real economy never enters the consciousness of monetarists since money is always the answer. But make no mistake, the primary reasons for this global malaise are that money has lost its productive capacity and its proper place as a tool within the system.
    The third great unspoken truth is that the conventional Status Quo– the financial punditry, the Cargo Cult of Keynesianism, the incestuous academic community, the PhDs in the Fed and Treasury, the politico lackeys, the self-serving think-tanks of both empty ideologies (“which is better, Bud or Bud Light?”), not to mention the lobbyists, revolving door toadies and all the other hangers-on in New York and Washington– have no Plan B and certainly no Plan C. In other words, they are utterly clueless about what to do when their abject and total failure becomes unavoidably obvious.

    It is of course a crisis of self-service; nobody dares put their own status, wealth, power and perks at risk by thinking independently, much less speaking All That Cannot Be Spoken Lest This Sucker Implode.

    But it is also a monumental lack of imagination; the lackeys and toadies cannot imagine any other Beast other than the one whose teat they have sucked all their lives. They live in mortal fear not of being ignorant or lacking in imagination–those deficiencies are too obvious to contest–but of the truth of the system’s increasing weakness and vulnerability being openly revealed.

    America’s (and the world’s) financial sector is a fragile, sickly hybrid which will shrivel and expire the moment it is placed in the real, dynamic world. And because the global economy has become dependent on the slouching beast of financialization, it too is fragile and sickly, sensitive to the slightest perturbations and exquisitely vulnerable to any disruption of the constant life support offered by central banks and Central States.

    It is neither capitalism nor socialism, but a twisted hybrid of the worst traits of each.

    I happened to catch a brief interview on DW TV (German TV, with English announcers and subtitles) of one of the few ECB (European Central Bank) officials with the integrity to resign in protest at the ECB’s blatant interventions in the bond market (buying Italian bonds to prop up a market that would implode the second ECB support vanished) and the central bank’s slippage toward money-printing as the answer to every problem.

    This gentleman said that the ECB had to monitor the global economy 24 hours a day lest some tiny policy mistake bring the entire shaky edifice down.

    Does that strike you as a description of a robust, adaptable, capitalist system based on transparancy and price discovery of assets? Of course not; it describes a hothouse economy, always on the ragged edge of collapse if its central bank and Central State minders make the tiniest error in its care.

    For four precious years we have been force-fed nothing but lies, obfuscation, misdirection, fear-mongering, spin, sins of omission, misinformation, propaganda, false rumors and false hopes. The hothouse is slowly falling apart, and the sickly global financial sector is wilting. The financial media is heralding every “save” and every “rescue” with ever-shriller enthusiasm, lest a contagion of truth spread through the hothouse like a chill wind.

    But we can be sure of one thing: those who know better have already sold, and it is now the job of the politico lackeys and the toadies of the Mainstream Media to convince the bagholders to hold on and not sell, because “everything’s been rescued.” Distilled to its essence, that is their one and only job: to convince you not to sell. That keeps the bid up for their Masters to sell into.

    If history is any guide, the final collapse will be triggered by an apparently “controllable” event, something like the bankruptcy of MF Global. All eyes are on Greece’s referendum, apparently scheduled for December 4 or 5; but regardless of the vote, does a “yes” or “no” change that nation’s fundamental insolvency? No, it doesn’t.

    Does the passage of some toothless law in Italy magically render that nation solvent? No, no, a thousand time no; none of these public-relations tricks can change the fact that all these nations are insolvent, the banks are insolvent, and even France and Germany are staggering under unprecedented burdens of debt.

    The smart money sold in May, 2010, and the disbelievers among the Power Elite sold in May 2011, or perhaps August. Now those below the smart money (but still above the dumb money) are sniffing the fetid hothouse air, where the rank, sweaty desperation of the minders is now everpresent.

    So the apparatchiks and foot soldiers have been ordered to keep the dumb money from selling, until their “betters” can sell into a rumor-juiced bid. This explains the sudden jump in the S&P 500 on every rumor of rescue, as if an over-indebted and leveraged-26-to-1 financial system can be rescued with “belt-tightening” and ECB intervention with taxpayer money.

    The entire euro “project” was a scam that enabled a vast new scale of financialization. Now that the “project” is falling apart, the bagholders who bought into the shuck-and-jive are nervous and fearful; has it all really been “saved”?

    No, it hasn’t; it cannot be saved. The only “solution” available is to sell: sell now, while there is still a bid. Sell fast, sell hard, sell everything denominated in euros. That is precisely what the Status Quo fears the most: an awakening continent of bagholders and debt-serfs.

    Anyone thinking the euro (and eurozone) can’t possibly go down until after the Greek referendum may well find their confidence in the Status Quo’s “rescue” has been sorely misplaced.

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