During the 2016 presidential campaign, negative ads and rhetoric from the Clinton campaign highlighted that
President Trumpâ€™s companies often delay payment and renegotiate the prices for services already performed. Numerous people
gave statements about how they ended up taking less than the amount set by contract.
How is it that any business can drag payment and renegotiate contracted pricing and not face lawsuits? Not one
person who Trump dragged said they sued. There were no lawsuitâ€™s because Trump was following a little-known federal law. Companies
use it all the time.
You can use this law too. While it can be used as a renegotiating tool, it can also be used to buy 30 to 120 days
to pay a bill you intend to pay in full or to delay payment until you file for bankruptcy. The best part of this law is that it
prevents the account from being reported to the credit bureaus as delinquent, sent to collections, or closed.
This technique comes from the Fair Credit Billing Act (FCBA). It applies to accounts where you have "credit which is
payable by agreement in more than four installments or for which the payment of a finance charge may be required, whether in connection
with loans, sales of property or services, or otherwise."
So, why does this work? The FCBA, 161(d), provides that "a creditor operating an open end consumer credit plan may not,
prior to the sending of the written explanation or clarification... restrict or close an account with respect to which the obligator has
indicated...that he believes such an account to contain a billing error solely because of the obligator's failure to pay the amount indicated
to be in error." Additionally, under 162 (a), "a creditor or his agent may not directly or indirectly threaten to report to any person
adversely" on the obligator's failure to pay the amount indicated by the Notice of Billing Error. This means that, essentially,
if the initial contract is negotiated properly, it leaves the door open for you to legally delay payments later on.
We detail this law and explain how you can utilize it on page 148 of
Winning the Credit Score Game.
This is just one of the many plays we lay out in our complete credit repair manual. If you'd like to take your understanding
of how to build credit to the next level, I highly recommend this book.