Their seems to be a great deal of misinformation on this topic. The question being do banks have insurance to cover themselves against loss in case of a payment default by a consumer, and is
debt dispute valid way of handling a debt crises? Perhaps the best way to approach this question in a credible manner, one that takes the answer beyond the realm of opinion, is to look at actual court cases and study the legal track record , if one exists, on this topic. So, to keep this outside of my opinion, that is exactly the approach that was taken when researching the answer to this question. Here is the actual question that we are attempting to answer. We know that a bank cannot carry defaulted debts on its books forever. The reason being that defaulted debts, or debts where the odds are negligible that a bank would ever recover money loaned on a credit card or other unsecured debt, would badly skew the picture on the health of the bank or lending institution. So, banks are bound by a simple rule. When a debt reaches a default age of 180 days, the bank must remove it from its books as an asset and charge it off.

Here is the Documentation:
Fact #1.  In June 2000, the U.S. Comptroller of the Currency issued an Order on its Web Page to All Banks.  (See 8 Pages)  They MUST Write Off All Unsecured Consumer Debts that are More Than 180 Days In The Arrears.  So, here we have the first proof.

As an aside, I thought I would throw in this piece of legal information from Appellate court cases:
. Their are 2 Pages of Appellate Court Cases proving that Banks/Lenders cannot Foreclose on Any Debt Without First Presenting the Original Promise To Pay/Credit Card Agreement.  A Copy Of An Original Is Not The Original Promise To Pay/Credit Card Agreement As Required By Law.

Here is our first piece of Documentation on the actual Default Insurance. It is found in a case called Jenkins Vs Heinz, 25 f 3rd, 536, 1994. This is an Appellate Division ruling overturning a lower court ruling in which the bank was holder of a car loan after a repossession and was seeking to recover 4,137.00 from the defendant which they said was money it had to spend to maintain vehicle insurance that the defendant had allowed to lapse. The insurance they were looking to be reimbursed for was not car liability insurance, etc, but rather insurance against a payment default which is exactly what happened. Note: Insurance against a payment default. I realize that a car is a secured debt, however, the principle is the same.

For easy reading I have chosen to end this article here. However, if you would like to know more
about our debt dispute program, please do feel free to call at 877-766-2465.


Yours Truly

Steven Ciantro
Consumer Advocate
American Debt Enders

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