Through the Fire #77 - Retired Teacher and Author - Tommy Kilpatrick

Tommy Kilpatrick wrote a book and was so successful that he was contracted with an infomercial company. For six months, Kilpatrick lived on his three credit cards to be available for radio interviews to promote the book, in anticipation of making the promised $100,000 a month. One of the other authors contracted with the same company got in trouble with misleading information, so all new authors contracts were cancelled and Kilpatrick was left holding the bag of $85,000 of credit card debt. 

Kilpatrick was at first stunned, then depressed about his situation. One morning he woke up thinking about his father being a CPA and how he studied in college to become a CPA.  It dawned on Kilpatrick that a bank-issued credit card is not truly a credit card. There is no real debt to the bank. However, there are true credit cards issued by private businesses that provide goods and services to their credit card holders. The bank never loaned Kilpatrick any currency because he had never signed a promissory note. Therefore there was no loan.

Kilpatrick decided to take a bold move and directly sued the three banks, separately, in federal court, by himself. Did Kilpatrick win? Define winning? Jury trial and a verdict against the banks? No. The judge threw out all three cases. So Kilpatrick lost? No. All the debt was eliminated from his credit report, it showed no derogatory items, no 1099-C, which declares to the IRS that Kilpatrick received an $85,000 loan and didn’t pay it back. Kilpatrick in his pleading laid out the entire case that the bank had no invoice to prove a debt. The bank, in violation of Federal Reserve Bank rules, failed to obtain a promissory note required before any bank will issue a loan. Kilpatrick also was able to cite case law, where the supreme court determined that fraud undoes all contracts. Kilpatrick and the bank had no contractual agreement. The bank knew it would lose the case.

As of the third quarter of 2024, the total credit card debt in the United States was $1.17 trillion, according to Ramp. This represents a $24 billion increase from the previous quarter. 

Average American household has about $9,000 of bank-issued alleged credit card debt.

You have no outstanding unpaid bank invoice for goods and services. There was no extension of credit and no invoice, therefore there is no debt.

According to the Federal Reserve's "Modern Money Mechanics"  Page 6  "Of course, they [banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. 

What they [banks] do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts."

In simple terms, you must sign a promissory note to pay the bank in dollars, and in return the bank opens up a free checking account and puts numbers representing dollars in your account. 

If you didn't sign a promissory note, then there was no loan. You have no debt.

Get your free book and free 15 minute consultation with Tommy:

https://www.diy-debtrelief.com/

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