Sample Deposition Questions 2

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Sample Deposition One

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Deposing a Business Records Keeper

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Econ 101 or What Happens when the Bills Come Due

I believe it is a fundamental, unchanging law: there are no free lunches in life or nature. What gets bought must be paid for, eventually, by someone.Members at Your Legal Leg Up know very well that that law applies to daily personal purchasing decisions, and many have paid very steep prices indeed. But it also applies at the national and international level, and politicians who have long ignored the fact are soon going to be reminded of it.

As one economist puts it, in order for one person to get something for nothing, someone else must get nothing for something. So what happens to our current government debt of 21 trillion dollars (more or less, and growing rapidly) in a world of debt jubilee? Eventually it must be paid, right?

This is part of a series of articles on Occupy Wall Street, Debt Jubilee, and our future. Click on the links for the previous articles, but this article should stand on its own, also.

Debts Used to be Paid in Gold

Up until the 1930s, debts all the world round were settled, ultimately, in gold. A “dollar” was a fixed amount of gold, and for over a hundred years there had been essentially NO inflation. There had been occasional “runs” on banks that got overextended, and banks (and people with savings in them) got wiped out from time to time, and there had been occasional booms and busts. The Federal Reserve was put in to deal with those problems, and so it did. Thirteen years after its founding in 1914 the Great Depression began, and we’ve been on a boom and bust cycle ever since then.

But I digress.

Private Debts were Paid in Gold until the 1930s

The point is that Gold was first removed from actual circulation within the United State by Franklin Roosevelt and made illegal for persons to own. At the same time, the dollar was devalued (against gold on an international basis) by about thirty percent. International debts were still settled in gold until 1971.

So what does “settled in gold” even mean? When a businessperson in the U.S. buys a Japanese widget, he pays either dollars or yen. That is, either he sells dollars to buy yen, or the Japanese business ultimately does so. In any event, some dollars are transferred to Japan. Of course this happens in a gazillion ways and times throughout any given year, but in the final analysis one side is holding more of the other side’s currency. Mostly, that is allowed to persist, but at some point the side holding more of the other side’s currency may want to settle up in something else. Until 1971 foreigners could trade dollars for gold.

Dollar Window is Closed

Then there was the Vietnam war along with various U.S. policies that cost more than the government was taking in. That caused the dollar’s actual value to go down, but the official dollar value in gold stayed the same. That meant that gold was too “cheap,” and the French (in particular) decided to trade large amounts of dollars for gold. In 1971, the U.S. dollar was cut free of any specific relationship to gold and the government stopped giving foreigners gold for dollars.

At that point, the U.S. deficit was a few billion dollars and causing a lot of anxiety. Since then it has grown to 21 trillion (and adding, at current rates, another trillion or more per year) and causing very little anxiety. People on Social Security are hoping to get paid, and yet there are fewer and fewer workers to support them, so they are being paid out of taxes (or, realistically, government debt). The deficit is going to grow, inevitably.

Still No Free Lunches

What happens when the law against free lunches kicks in, finally? What happens when those trillions have to be paid? And what happens if, along the way, a lot of student loan and other debts are also wiped out by legislative act?

Right now, the dollar’s value is established by the free market (which isn’t to say it isn’t extremely manipulated). It’s worth what people all over the world say it’s worth without reference to any fixed point (gold, historically). When the law against free lunches kicks in, people will decide they would rather have things than dollars. They’ll say the dollar is worth less as they try to recuperate some of the resources they’ve been sending over in exchange for U.S. debt, in other words. This process has happened many times to various other countries. It is happening right now to Venezuela, whose inflation rate was, unofficially, approximately 1 million percent in 2018. It’s happening in Turkey right now. It happened in Germany, where one U.S. dollar was ultimately worth 4 trillion German marks in 1921.

Current Deficit is 21 Trillion Dollars and Growing

You can buy a lot of stuff for $21,000,000,000,000.00. If people try to buy stuff with that much money it’s going to cause prices to zoom higher. Many factors have held that result in check for the time being, but it will not last. If history is any guide, the change will be sudden and happen with incredible, bewildering speed. When adding straws to camel backs, one never knows which one will be the one that is too much. All that is certain is that currently over a trillion straws are being added every year. I think the one too much will happen within the next decade or two.

The havoc caused by currency destruction is almost unbelievable. Historically, it has meant the destruction of the middle class and all economic security. It has devastated the poor and led to widespread starvation and disease, and it has led to oppressive government and foreign wars. Without going into further details, I hope that the millennials will try to prevent it from happening. That’s going to mean some very tough choices.

As an aside to the reader, although I think the value of the dollar may, at the point foreseen, be among the least of your problems, it would probably be smart to try to keep it from being a problem at all. You should consider buying things of actual value no with whatever money you can afford. Talking about gold, silver, land, food… I’m not saying hoard cans of food like a survivalist. I’m saying it makes sense to recognize what seems to be coming our way and take rational steps to prepare where possible. There seems to be no telling when things will hit the fan, but that they will hit the fan is guaranteed by the law against free lunches.

Jubilee for Student Debt

There is a movement – in its very early stages – for a debt jubilee. You may not have heard of it, but it has some people very worried. And I think there’s a good chance it will come to pass. Soon.

This is the second of a series of articles on a continuing political phenomenon important to people with debt. The first article is “Occupy Wall Street.”  The second article is Econ 101 or What Happens when the Bills Come Due.

What is a “Jubilee”?

A jubilee is the mass forgiveness of debt – a governmentally imposed wiping of the slate clean from all debt of any specific, or all, types of debt. You might think it could never happen here in the United States, but it has, historically, happened several times in various places. Never was it more appropriate than for student debt, in my opinion. Of course, other kinds of debt could also get thrown into the pot when things get going. Is it good? Is it likely? And if it happens, what will be the probable consequences?

Any talk of student loan jubilee should begin with what has happened in the past forty years. During that time, student loans have become not just popular, but essential for almost all students entering college or other formal, advanced education in the United States. In some countries in Europe, for example, schooling is free, but here it is expensive – very expensive. And it has been getting more so at a rate far exceeding the rate of inflation for the past forty years. This is because student loans, which had a noble publicly discussed purpose (making education available to all) had the unintended consequence of making education unaffordable to all. By relieving the price competition, it has allowed schools to increase tuition at a tremendous rate.

The schools and the banks have become filthy rich from the system. Student graduation rates have fallen, and average length of college has increased. And a whole generation of students have entered adult life with a crushing burden of debt.

Because of “special government protections,” bankruptcy is almost never any help to people with student debt. They declare bankruptcy and still end up paying everything they have for student loans that, all too often, were completely useless to them. Whatever you think of Trump’s tax cuts for the super-rich in 2017, the amount would have been enough to rid people of their student debt burdens, so it can be done. It’s just a question of who gets the money: the super rich 1%? Or the poverty stricken 99%?

This question is soon going to be coming to the fore.

Social Security is a Huge Issue

There’s another factor at play. The baby boomers – people born from roughly 1950 – 1965 – have plundered the resources of the past and future. They’ve given themselves tax cuts and embarked upon expensive wars while decimating the interest rates that allowed old people to live on their savings. And while guzzling the resources that could have given the young a start in life. Now they’re beginning to retire, assuming that Social Security will keep them in the comfort to which they are accustomed, for the rest of their long lives. When boomers started paying into Social Security, there were many workers per retiree, now there are less than half as many workers per retiree. Social Security is paid out of current tax revenues, so what that means is that the “surplus” people like to talk about for Social Security is an illusion – that surplus is made up of government bonds which are paid (or rolled forward to be paid later) out of current taxes. The millennials will be paying for the boomers’ retirement, if they choose to do so.

By election time in 2020, the baby boomers will no longer be the largest voting group in the country. Millennials will become the largest voting block, and they will be gaining electoral power for many years after that. It is going to occur to them that the boomers have pillaged their futures. It will occur to someone that the time is ripe for a jubilee to set thing straight. That person will find a passionate following of people who have never felt called-upon to vote. Politicians have pandered to the boomers for many years. They’ve ignored the millennials, and the millennials have ignored them.

That could change very suddenly. I think it will. Some people are in fact already talking about it.

What it Means

The change in electoral power and the likely shift in governmental focus could be huge. One could hope that the millennials will strive to set some priorities that the boomers never managed. In that scenario, student loans would be eliminated and free education installed (perhaps). Social Security would be managed in some way take care of the old without overburdening the young, and peace and harmony could descend forever and ever amen. Something has to change for that to happen, though. Either the super-rich will have to pay much more or the military, for example, will have to take much less. It could happen, but these are both deeply entrenched special interests with a lot of money and power.

An alternative scenario is less attractive but more likely. In that scenario, student debt is eliminated and there’s a lot of talk about cutting back on money to retirees and the military and of taxing the super-rich. What actually happens is more of what has been happening, though – the deficit balloons. The money is paid in depreciated dollars, and the debt is pushed down the line for the future to pay.

Eventually, that isn’t going to keep working.

Motions in Limine

Motions in Limine are pre-trial motions that serve a specific purpose. That is, they are motions designed to preview issues regarding whether certain evidence will be allowed (“admissible”) for the trial and under what circumstances it would or will be admitted. Typically, a court’s final pretrial order will set the time limit and schedule for motions in limine, but even if it doesn’t, you may want to file one.

Remember, they are filed in contemplation of trial – they are not a motion to file in some more general sense. If there is a motion for summary judgment, for example, you don’t file a motion in limine – you oppose the motion and object to the evidence in that motion. You would make all the same arguments, perhaps, but in a different context.

Remember that a court may, or may not, rule on a motion in limine before trial. The idea is to present the objection in a systematic way under conditions that allow the judge to think about it outside of the heat of the moment. It often happens that you’ll present a motion in limine and the judge won’t rule on it because the context of the trial isn’t clear until things start happening in trial. No matter. Make your best argument in the motion and argument and be prepared for whatever the judge does. Pay close attention to what the judge thinks matters regarding whether the evidence will be admitted, and be prepared to argue at trial that those conditions haven’t happened (so the evidence shouldn’t be admitted).

Finally, remember that any ruling by the judge before trial is not necessarily binding at trial. Thus, even if you lose your motion to exclude in limine, you will want to object at trial and take another shot at it. You’d be surprised how often the judge will change his mind. And that means you also have to be prepared for the other side to do the same – and you must remember that in order to preserve your rights you probably have to make your objections again at trial. So think of the motion in limine as a sort of warm up.

 

Service Call Scam Warning

Tech support scams, which get people to pay for fake computer help or steal their personal information, are convincing. You might already know the signs of a tech support scam, but do your friends and family? Here’s what they need to know now:

  • Companies like Microsoft don’t call and ask for access to your computer. If you get a call like that, it’s a scam.
  • Real companies also won’t ask for your account passwords. Only scammers do.
  • Tech support scammers try to convince you they’re legitimate. They’ll pretend to know about a problem on your computer. They’ll ask you to open normal files that look alarming to make you think you need help.
  • If you do need computer help, go directly to a person, business, or website you know you can trust. General online searches are risky because they might pull up another scam.

If people you know were already scammed, here’s what to tell them:

  • If you paid with a credit or debit card, call your credit card company or bank immediately and tell them what happened.
  • If you paid with a gift card, contact the gift card company (iTunes, Amazon, etc.) ASAP to see if the funds are still on the card and can be frozen before it’s too late.
  • A tech support scammer who has access to your computer can install malware. Update your computer’s security software, scan your computer, and delete anything it identifies as a problem. Restart your computer to be sure the changes take effect. Going forward, download security updates as soon as they are available. Most operating systems have a setting to download and install security updates automatically. Use it. And install updates for your other software, including apps.
  • If the scammer got your password for a financial account, or a site like Amazon, change the password immediately. Contact the company directly to make sure nobody has broken into your account.

Report your experience to ftc.gov/complaint. You’re not alone, and reporting these scams helps law enforcement go after the people behind tech support scams.

The Beginning of a Debt Lawsuit

Start of Suit

There are some issues more likely to come up early in the case than at other times. For help with this sort of issue, take a look at the videos and articles below.

Debt Collector Dirty Trick–to Trick You into Defaulting  Video. Sometimes, for various reasons, a debt collector will tell you “not to worry” about answering the petition. This video tells you how to handle that.

Debt Law Is the Law of the Jungle!  Article. Don’t be fooled. If you’re being sued, you’re in a contest, and they’re trying to eat you up.

The Importance of Early Discovery  Article. If you’re being sued for debt, it will help you to get “off the blocks” quickly and begin the process of discovery. This article explains why that’s so important.

Is Defending Yourself Hard?  Article. How hard is it to defend yourself? This article goes a little more in depth than the video on that question.

Is Defending Yourself Hard?  Video. Basically the same as the article–if you prefer to learn in video.

Defend Yourself, Protect What’s Yours  Video. You have an excellent chance to win if you defend yourself. This video tells you why and gets you started.

Pro Se Defense  Video. Some pros and cons about defending yourself in court when you’re sued for debt.

Settling with the Debt Collector  Article. Settlement can be either victory, defeat or compromise. Before you settle at any point in the suit, you should read this article.

What if I Really Owe the Money?  Video. What if you owe the money? Should you just pay it? or fight? This video tells you why you must defend yourself or run the risk of paying twice. And if you fight, you may not have to pay at all.

What’s Your Case Worth to a Debt Collector?  Article. How Does a Debt Collector Decide How Much Your Case Is Worth?

What to Expect the First Day  Article. If you’re being sued, you probably need to go to court even if you answer the petition. Here’s what to expect when you get there.

Why Don’t the Debt Collectors Just Give Up?  Video. If your defending yourself makes suing you so unprofitable, why don’t they just give up when you file your answer?

Stating Attorney Fees in Petition – Probably FDCPA Violation

It used to be common for debt collectors to name a specific amount of attorney’s fees in their Petition when suing on a debt. In other words, there will be an amount stated (specified) as reasonable attorney’s fees and sought as part of the debt in the “wherefore” clause of the Petition. The question is, does this violate the Fair Debt Collection Practices Act (FDCPA)? The answer seems to be “yes” if the petition sues for a specific amount for attorney’s fees. If the company represents that you agreed to any specific amount of fees it is probably a violation of the FDCPA if the contract on which they’re suing provides for “reasonable attorney’s fees.”

That’s because you theoretically agreed to “reasonable” fees (as eventually determined by the court) rather than some liquidated amount.

As a result of some of the “blowback” in the form of counterclaims, many lawsuits never ask for attorney’s fees at all. But if yours does, and they ask for a specific amount, it could violate the FDCPA. Of note is how stringently the courts sometimes read the FDCPA in favor of consumers.

Common in Contracts

Many credit agreements include a section allowing the creditor to collect its “reasonable attorney’s fees” in the event of a default, and on the face of it this is perfectly reasonable. If a consumer fails to make payments, someone is going to have to pay an attorney – the reasonable fees section puts that burden on the person allegedly causing the problems. Like most laws, it’s tough on people without much money, but if someone has to pay (and someone always has to pay the lawyers), then it makes sense that the person breaking the agreement should do it. Or at least that is one reasonable type of agreement.

How it Shows up in the Petition

The way this often plays out, though, is that, after default and sale of the debt (obviously, the right to collect is what is being sold) to a debt collector, the debt collector will often bring suit for a specific amount. The petition will allege the right to attorney’s fees and then, in the “wherefore clause” will state something like this:

Wherefore, plaintiff requests $1,000 as the principle sum owed, plus interest at a rate of 29% from January 3, 2007 ($775 as of the date of filing), plus $450 reasonable attorney fees, plus costs and interest dating from the date of judgment.

I am using round numbers to suggest an attorney’s fee of 25% of the amount sought, and that is not an unusual amount sought as attorney’s fees.

The debt collector will often back up this request for fees with an affidavit stating that the amount named was “its attorney’s fees expended” or simply that the amount is for “fees as provided by contract,” or the like.

Violation of the FDCPA

This language violates the FDCPA because it wrongly suggests that the consumer agreed to a specific amount as an attorney’s fee – and that almost never happens (in the case we’re looking at, the right was to “reasonable attorney’s fees”). Where the right is to “reasonable attorney’s fees,” a debt collector violates the FDCPA by liquidating that amount (turning it into a specific dollar amount) and seeking that amount as if that was what had been agreed. The case you will want to use and to know if you have this situation is Stolicker v. Muller, Case No. cv-00733-RHB Document 61, Filed 09/09/2005, Bell, J, U.S.D.C. W.MI)(granting summary judgment to the consumers in a class action lawsuit on this issue). Note that the court found that seeking attorney’s fees in this way – by including a liquidated amount in the wherefore clause “altered the contract she signed with [the original creditor]… and violated the FDCPA. It specifically violated Section 1692e(2)(A),(B) (a false representation of the character or amount of a debt or the false representation of the …compensation which may be lawfully received); 1692e(10) (using a false representation to collect or attempt to collect a debt) and 1692f(1) (collecting any amount unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”