Do Your Materials Work for Cases against Original Creditors?
Yes. When I represented clients in these cases, there used to be a more significant difference between original creditors and junk debt buyers. We’ve written a lot about the differences between original creditors and debt buyers. They boil down into two things: you are more likely to have a counterclaim against a “debt collector” (which all debt buyers used to be considered); and debt buyers are less likely to have the documents they need to beat you. These differences are still there, but they are less important now than they used to be.
We will discuss both defense and possible counterclaims.
Defense
The main reason our materials work against both original creditors and others is practical. That is, it is because of the way law is actually practiced and the way people dispose of lawsuits. As we have often pointed out, parties settle cases only because they think a particular settlement offer is the best overall result they can obtain. It has nothing to do with what might be good, or nice, or anything else, for the other side. As a practical matter, you look for what is best for you and don’t try to help the other side, right?
Debt lawyers consider three things in this analysis: the risk of losing, the price of winning, and the chance of collection. These three things are very different.
Risk of Losing
The risk of losing is the chance that you will lose. It’s obviously never quite zero, but the people suing you pretty much ignore this risk – they think they will win, and the few times they don’t, don’t hurt. At the beginning of a lawsuit, therefore, this risk might as well be zero in the minds of the debt collectors. Our materials are designed to help you see whether they have any weaknesses, and if so, to build on them to create doubt in their minds. For pro se defendants, that’s pretty much all you will ever accomplish.
Price of Winning
The price of winning is very different. That is MUCH more of a consideration for the people suing you. Given (they think) that they will win, what will it cost to get the thing to trial and get the judgment? At the beginning of the case, the people suing you also ignore this issue because most people don’t put up much or any fight. The debt collectors expect their judgment easily and quickly – probably by default without any work at all.
And they get it most of the time. Our materials help you change their perception of this factor. Everything you do will cost them money, and the more you have done, the more they expect you to do. In other words, as you defend, the pile of costs grows, and the pile of expected costs grows even more. Whether they are debt buyers or original creditors, this radically changes the equation in their heads. It raises the likelihood that they will lose money whether they win the case or not. Frankly, this is why most of them settle for a reasonable amount.
Chance of Collection
The other factor is the chance of collection: given that they will win, can they get money from you. Debt collectors and original creditors both understand that most people want to pay their bills, and the reason some don’t is that they have money problems. They know they can’t get money from you if you don’t have it, and they think you probably don’t have it.
This factor is very much a part of their thinking at all stages of the case, and it’s why most debt collectors will probably give you a discount on the case before you do anything – if you ask. It won’t be much of a discount, but it will be more if you offer a lump sum (eliminating the risk of collecting the rest) than if you offer payments. Does that make sense?
Factors Work Together
Notice how these factors work together. If you don’t give the other side information about your assets, and you do conduct discovery, you (slightly, in their minds) increase their chances of losing and drastically increase the costs of suit. You also delay the judgment they had expected to get quickly – and that reduces their chances of collection if they win.
The two most important factors, cost and delay, are the same for original creditors and debt collectors. Risk of losing goes up more for debt collectors than original creditors, but this factor is never important for either debt collectors or original creditors.
Thus our materials help you drive the value of the case down in the same way for both groups. If the other side regards your case as less valuable, it is more likely to offer you an actually good settlement, or to walk away from the litigation eventually. But what if it doesn’t? How do our materials work then?
Remember that law is a contest with very specific rules. It has always been our belief that either debt collectors or original creditors COULD win their case against you. To do so, however, they have to get the stuff they need and follow through with it, and these are expensive to do.
When we started Your Legal Leg Up, we knew that debt collectors almost never had what they needed to win if the case went to trial, and we were satisfied that they could not get it in a cost-effective and timely way. But we believed original creditors did have the necessary evidence or could easily get it. We have discovered that this is not true.
We are unaware of any reason why this is so. From our perspective, it would seem to be a simple process to retain the necessary records and do what is necessary to “authenticate” them as evidence (make them admissible in court). Nevertheless it is an observable fact that they often do not obtain or use appropriate evidence, and therefore there must be some reason for it. Perhaps it is the same for original creditors as it is for debt collectors – either they don’t think it’s worth it given the collection risk, or they are set up in a way where getting the information would clog up their systems and increase costs in general. In any event, you can find out if they have the evidence and the will to use them correctly by doing only one thing: fighting their case and conducting discovery. We believe there’s a good chance you will win if you do this.
Counterclaims
The other side of debt defense is using a counterclaim to take control of the lawsuit. We do still regard this as an important thing, if you can do it. That’s because if you can hold the debt collector in the suit with a counterclaim, you can make them dismiss the case “with prejudice,” which prevents anyone else from suing you on the debt. It will also help you repair your credit if you destroy the claim against you.
You will probably never have a good counterclaim against an original creditor, whereas you might get one against a debt collector. Some claims do exist – notably defamation or, for extreme acts, something called the “tort of outrageous infliction of emotional distress,” but the courts have historically been amazingly tolerant of original creditors. Much less so of debt collectors.
But again, as a practical matter, these things have turned out to be less important than they might have been. If you win the suit against another party (without prejudice), they are unlikely ever to sue you again even if they could. And if they sell the debt, the person buying the claim would have little chance against you in court. It also appears to be true that after dropping a suit against you the other side would have less energy and desire to prevent you from credit repair. It isn’t that they like you or couldn’t make trouble, it’s just that they have no financial interest in doing so. This appears to cause a lot of them to take no steps to prevent your efforts to remove their credit references.
Most people being sued by debt collectors just want the suit to go away and are not interested in trying to make the other side pay. This reduces the importance of the other side’s status as debt collector or not.
Conclusion
Therefore all things considered, our materials are about equally effective against debt collectors and original creditors. If the matter goes all the way to trial, you might have a somewhat larger chance of losing to an original creditor, but fighting intelligently will give you your best chance of preventing that from happening. The actual court processes are the same in either case, so you will be prepared to fight.
Should I Buy Your Motion for Summary Judgment Pack?
When Do you Need the Motion for Summary Judgment Pack?
If the other side has filed a motion for summary judgment against you and you want to defend only, you should get the Motion for Summary Judgment Defense Pack.
If the other side has filed a motion for summary judgment against you, and you want to defend and also file a motion for summary judgment against them on the same case, you should get the Motion for Summary Judgment Omni Pack.
And if you either want to file a motion for summary judgment against them (without their having filed one against you) you should get the Motion for Summary Judgment (Offense) Pack.
What is a Motion for Summary Judgment?
A motion for summary judgment is an “evidentiary” motion. That is, unlike a motion to dismiss, a motion for summary judgment seeks to determine a set of facts that are “uncontested” or not in dispute and asks the court to rule on how the law applies to them. What makes a judgment “summary” is that it is decided without a trial. A “motion” is the request to the court to issue the judgment.
Either party can file a motion for summary judgment. If the other side files one first, you put your response to theirs, and your own motion together and call it a “cross-motion.” Thus “cross-motion” really only refers to timing. Substantively, you will either be filing a motion for summary judgment against them, defending against their motion for summary judgment, or both.
Establish “Uncontested” Facts
Because disputes in the evidence are supposed to be resolved at trial, motions for summary judgment are supposed to be determined based only on “uncontested” facts. But “uncontested” and “facts” are terms of art, as you will see in the materials. A fact is not established because you say it is so in the motion. A fact can only be established by evidence properly presented to the court. Likewise, a fact is not “contested” simply because you don’t like it or you say it isn’t so – it’s only contested by the admission of evidence that shows it isn’t so.
Illustration
Let’s make up an example to clarify how these things work. Suppose the debt collector is filing a motion for summary judgment that says you owe $1,000 on an old credit card. They put in an old statement showing you supposedly owe the money and an affidavit by one of their robo-signers that says the statement is “accurate” and that you haven’t paid the bill.
Their Case
That is pretty much exactly what the debt collectors do every time. Their evidence that you owe and haven’t paid is the credit card statement and the affidavit. They’ll say it’s “uncontested,” so what do you do?
Your Defense
You will object to the affidavit and credit card statement for legally powerful reasons (as shown by the summary judgment pack) and you will, if you can, add an affidavit of your own that says, roughly, “I don’t owe them, never owed them, didn’t get a statement, and never had an account with the bank they say this came from.”
Your effective objection SHOULD be enough, because it is up to them to present actual, admissible, evidence in support of their “uncontested facts.” But if you can add an affidavit of your own, the effect is much more powerful. Then you are both attacking their evidence and introducing contradictory evidence of your own.
Warning
Merely claiming in the Response to their Motion that you don’t owe the money would not keep their evidence from being “uncontested.” Understand? You must present evidence and attack the validity of their evidence.
Cross-Motions for Summary Judgment
Now (because of the nature of debt cases), if they can’t win a motion for summary judgment against you, you should almost always be able to win a cross-motion for summary judgment against them. That is, they have the burden of proof on their claim. If they can carry that burden, they will win the case. If they can’t, then they should lose (the whole case) – if you show it and file a cross-motion. Therefore, if they file a motion for summary judgment against you, you will almost always want to get the “Omni” MSJ pack. Filing a cross-motion does involve significantly more work, but if you can do so you might save yourself a lot of trouble later.
Your Motion for Summary Judgment
Suppose they don’t file a motion for summary judgment, but you have gone through discovery and found that the only things they have in support of their claims are an affidavit and the old statement used in the above example? As a matter of fact, that is typical. In that case you should consider filing your own Motion for Summary Judgment.
Motions for summary judgment require significant effort and require you to find out and follow various procedures rigorously.
So they are work.
Why You Should Do It
But if you win, you can cut short the process of the lawsuit and avoid trial. And even if you lose your motion for summary judgment you will be educating the judge to the issues and changing the way the judge and other side look at you. Therefore, we suggest you do it – if you have time after finding out through the discovery process that they don’t have what they need.
At a minimum, working your way through a motion for summary judgment will sharpen you tremendously on the law and facts of the case, and it will very likely result in winning one way or the other. Thus we recommend it if you can do it.
Motions for summary judgment are designed for situations where you can show certain decisive facts.
The Motion for Summary Judgment Pack is NOT…
The MSJ pack is not another way to get what you need to defend the lawsuit. It is material aimed at a specific procedural motion and moment in time. Defending yourself requires a commitment to a process. It could include motions to dismiss, answering the petition, filing a counterclaim, conducting discovery, moving to compel discovery, and various pretrial maneuvers. It rarely requires all of these things, but our Litigation Membership is what you need to prepare for the fight.
We would suggest that you might not ever need the motion for summary judgment pack, but even if you do need that, you will also want the litigation membership. The membership is the glue that holds all the parts of the lawsuit together.
Should I Buy Your Motion to Dismiss Pack?
Short Answer: Only if you need to file a motion to dismiss.
Long Answer – As follows:
When Should One Purchase our Motion to Dismiss Pack?
A lot of people buy our Motion to Dismiss Pack on the theory that they want the case against them to go away. It isn’t as simple as that. The motion to dismiss pack is applicable to situations where (1) you have filed a counterclaim and the debt collector moves to dismiss it, or (2) you have some legal basis for arguing that even if everything the petition against you is considered true the debt collector does not have a right to collect from you.
The first of these possibilities – that you are defending against a motion to dismiss – is obvious. If they want to dismiss, you will probably want to defend against that. Your motion to dismiss their claim is more of the question.
Purpose of Motion to Dismiss
A motion to dismiss is a way to “test the adequacy of the petition.” It is NOT a way to test whether the debt collector has evidence to support its lawsuit. Motions to dismiss are therefore appropriate, most generally, when you have a challenge to the company’s right to sue you in a specific court or in general, or when you have a challenge to the court’s power over you. There are also what are known as “equitable” considerations we will discuss.
The Debt Collector’s Right to Sue You
The main way this comes up is in jurisdictions where they have passed regulations on debt collectors which the collector has not followed. Most typically this is an issue of registering or not. Several states require debt collectors to register in some way before pursuing debt – and debt collectors often ignore those regulations. If yours did, a motion to dismiss on that basis would be a good idea.
Another way the right to sue you comes up – much less frequently – is that the petition fails to allege ownership of the debt. This could happen, for example, where ABC Collectors are suing you on a Citibank credit card. If they allege in the petition that they bought the debt, then you will want to find out what evidence they have, but this is part of the suit and not a motion to dismiss. If they fail to allege why you’re supposed to owe them on a debt apparently owing to Citibank, a motion to dismiss is probably in order.
The Court’s Right to Hear the Case
You may want to challenge the court’s power to hear the case against you. This arises in two ways. First, the suit could be brought somewhere other than the jurisdiction in which you live. You live in X county, and they bring suit in Y county and you never lived there. That would likely deprive the court of jurisdiction over you and constitute a violation of the Fair Debt Collection Practices Act.
The other, more common, reason for this sort of motion to dismiss has to do with service. Were you served correctly? And this question can be rather complicated. For present purposes, we merely say that a motion to dismiss is the appropriate way to challenge the court’s power over you, and this is a motion you would want to file before taking any other action in the suit. If you think you were not served properly, in other words, you will probably want to file a motion to dismiss.
“Equitable” Circumstances
There are certain gray areas that might be appropriate for a motion to dismiss, and these are called “equitable” considerations.
“Equity” is a historical reference to the way courts used to be in England, but for our purposes they refer to something more like moral rightness. If the debt collector waited too long to bring suit, if it did something to prevent you from making payments, or if you settled the case previously and they still sued you might all be examples of equitable defenses. While they DO involve evidence beyond the pleadings (the normal boundary line for motions to dismiss), you could probably bring these things as motions to dismiss. You would also be wise to plead them as “affirmative defenses” in your answer if you file an answer
What Motions to Dismiss are NOT for
You don’t file a motion to dismiss because you aren’t satisfied with attachments to the debt collector’s petition or don’t think they have the proof. Yes, you’ll attack their case – but later, and in another way. You don’t file a motion to dismiss because you just want the case to go away. And you don’t BUY a motion to dismiss pack here as an inexpensive way to defend the case in general. Our motion to dismiss pack is a specific product aimed at a specific situation. If it doesn’t apply to your situation, you will simply want to get the Gold Debt Litigation Membership and start doing the things you need to do to win the case.
They’re Suing Me and My Spouse
What to Do when Collectors Sue both Spouses
It often happens that a debt collector will sue both spouses – either for the debts of one of them, or if they both signed up for the account or made charges on it. Our materials will obviously help in this case, but the question is what you will want to do.
Can One Spouse Represent Both?
In many states and courts (but not a majority), spouses are permitted actually to speak for one another. That is a change from the normal rule that only lawyers are allowed to represent others, but perhaps it is simply a nod in the direction of reality. If you are NOT permitted to speak for your spouse, he or she will be required to sign all pleadings applying to his or her case and, on rare occasions, appear personally. The shy spouse will rarely need to speak in court under any circumstances, but it could happen occasionally.
Possibly Different Interests, but Mostly Identical
The legal positions of the spouses may not be identical. The debt collector may have no right to sue a non-signing spouse. You would want to know this right away, and it is just a question of your state’s law (and your legal research). If there is no right against a non-signing spouse, you should consider moving to dismiss the claim on that basis as quickly as possible. Sometimes winning that motion would take all the fun out of the case for the debt collector – they may not be able to collect anything at all, win or lose, in that situation (again depending on your state law). Even if that is not so, getting one of the parties off the hook is potentially of tremendous benefit.
And filing a motion to do so has the added benefit of costing the debt collector money and time, which normally has its own benefits.
If you can’t get the shy spouse dismissed from the case, you will have two defendants with nearly identical defenses. But each will have a right to conduct discovery, which is an advantage. And while both must technically speak for themselves, as a practical matter the court will not want to hear identical arguments – you will not need to speak often. This should not be a reason to give up.
Both Spouses Should Stay Involved
I always suggest that both spouses should definitely pay attention to the proceedings, however. The shy spouse will often have valuable things to say, and in any event may – occasionally, be called upon to speak for him or herself. From a relationship point of view, defending together seems to be healthy as well. This is not a good area for either “you got us into it, now you can get us out,” or “I can take care of this, babe…” The stakes are too high for both spouses not to be intelligently involved.
They’re Suing me and my Business, Can and Should I Defend?
We get this question a lot because people borrowing money for their businesses usually have to offer personal guarantees. Then if the loan goes sour, someone sues the owner and the business.
Suing Your Corporation
This issue does not normally arise where the business is either a sole proprietorship or a partnership, because these entities are not treated as “separate persons” in the law. When you’re sued as a partnership or sole proprietorship, you’re just being sued individually.
If you own a corporation, on the other hand, it is a separate person, and only lawyers can represent other persons. That means you can defend yourself, but not the corporation. What should you do? This depends on what you can afford and what is at stake.
Corporation Valuable
If the corporation has assets and is valuable, you probably need to protect it. That means hiring a lawyer to represent it. If you don’t, the debt collector will get a judgment against it by default, and such a judgment could be or become a major nuisance.
Corporation Not Valuable
If the corporation is not particularly valuable and is not going anywhere, you could consider dissolving it if there’s a judgment, so that is less important. The debt collector may try to prove that the corporation is too “thinly capitalized” and is, therefore, just an “alter ego” for you, however. That is something you should take seriously, and again it would suggest hiring a lawyer – at least for advice on what to do about it.
Proving thin capitalization is much more lawyering than most debt collectors are prepared to do, however. They like to use premade forms to establish cases against people who do not defend themselves. Getting the facts to prove thin capitalization is uneconomic for most debt collectors, although of course this doesn’t mean it couldn’t happen in an individual case. Normally it won’t present much risk.
Hiring a Lawyer
If you hire a lawyer to defend the corporation, it is likely that the lawyer could also represent you personally. If you make that choice, which is wise if you have a lawyer well-versed in collection law, then you will simply be putting your fate in the hands of the lawyer. The problem is that most lawyers are NOT well-versed in debt defense, and there is a new financial variable as well, namely that the lawyer must charge for his or her services and recommend a “reasonable” course of action. That likely will lead to a settlement that might not be in your favor.
The Advantages of Self-Representation
The alternative is to let the lawyer represent the corporation while you represent yourself. This leaves you in the case as an involved litigant. As a practical matter, the case against you and the corporation are pretty much identical, and work on one will be work for both. Not all lawyers would willingly be involved in that scenario, but if yours is, you may get the best of both worlds. That is, you can let the lawyer spend “reasonable” amounts of time defending while you spend “unreasonable” amounts of time defending. Or, rather, since the lawyer is charging you $100 per hour or more, if you can work for less than that, time spent could be reasonable for you while unreasonable for the lawyer.
In debt law, unlike most other types of law, self-representation can make very good sense. You will not have the same bias towards settlement the lawyer has, and you will be free to spend more time on the case. This informs your judgment as to the law yet also makes your defense much tougher. We do believe that the risk of inadequate defense (by lawyers) is significant given the financial constraints, and suggest that your remaining knowledgeably involved could be very important.
Self-representation is annoying and time-consuming, and may not be financially efficient, but it would probably increase your chances of success, and there are intangible benefits of winning that are very significant.
Our Materials
Our materials will be of help to you in defending the legal issues involved in the collection. Our resources on legal research will help you with the other issues as well, but we have not addressed the specific issues of corporate law that could come up if your company is being sued. You will find the teleconferences helpful in many ways.
Do Our Materials Work against Original Creditors
Do Your Materials Work for Cases against Original Creditors?
Yes. When I represented clients in these cases, there used to be a more significant difference between original creditors and junk debt buyers. We’ve written a lot about the differences between original creditors and debt buyers. They boil down into two things: you are more likely to have a counterclaim against a “debt collector” (which all debt buyers used to be considered); and debt buyers are less likely to have the documents they need to beat you. These differences are still there, but they are less important now than they used to be.
We will discuss both defense and possible counterclaims.
Defense
The main reason our materials work against both original creditors and others is practical. That is, it is because of the way law is actually practiced and the way people dispose of lawsuits. As we have often pointed out, parties settle cases only because they think a particular settlement offer is the best overall result they can obtain. It has nothing to do with what might be good, or nice, or anything else, for the other side. As a practical matter, you look for what is best for you and don’t try to help the other side, right?
Debt lawyers consider three things in this analysis: the risk of losing, the price of winning, and the chance of collection. These three things are very different.
Risk of Losing
The risk of losing is the chance that you will lose. It’s obviously never quite zero, but the people suing you pretty much ignore this risk – they think they will win, and the few times they don’t, don’t hurt. At the beginning of a lawsuit, therefore, this risk might as well be zero in the minds of the debt collectors. Our materials are designed to help you see whether they have any weaknesses, and if so, to build on them to create doubt in their minds. For pro se defendants, that’s pretty much all you will ever accomplish.
Price of Winning
The price of winning is very different. That is MUCH more of a consideration for the people suing you. Given (they think) that they will win, what will it cost to get the thing to trial and get the judgment? At the beginning of the case, the people suing you also ignore this issue because most people don’t put up much or any fight. The debt collectors expect their judgment easily and quickly – probably by default without any work at all.
And they get it most of the time. Our materials help you change their perception of this factor. Everything you do will cost them money, and the more you have done, the more they expect you to do. In other words, as you defend, the pile of costs grows, and the pile of expected costs grows even more. Whether they are debt buyers or original creditors, this radically changes the equation in their heads. It raises the likelihood that they will lose money whether they win the case or not. Frankly, this is why most of them settle for a reasonable amount.
Chance of Collection
The other factor is the chance of collection: given that they will win, can they get money from you. Debt collectors and original creditors both understand that most people want to pay their bills, and the reason some don’t is that they have money problems. They know they can’t get money from you if you don’t have it, and they think you probably don’t have it.
This factor is very much a part of their thinking at all stages of the case, and it’s why most debt collectors will probably give you a discount on the case before you do anything – if you ask. It won’t be much of a discount, but it will be more if you offer a lump sum (eliminating the risk of collecting the rest) than if you offer payments. Does that make sense?
Factors Work Together
Notice how these factors work together. If you don’t give the other side information about your assets, and you do conduct discovery, you (slightly, in their minds) increase their chances of losing and drastically increase the costs of suit. You also delay the judgment they had expected to get quickly – and that reduces their chances of collection if they win.
The two most important factors, cost and delay, are the same for original creditors and debt collectors. Risk of losing goes up more for debt collectors than original creditors, but this factor is never important for either debt collectors or original creditors.
Thus our materials help you drive the value of the case down in the same way for both groups. If the other side regards your case as less valuable, it is more likely to offer you an actually good settlement, or to walk away from the litigation eventually. But what if it doesn’t? How do our materials work then?
Remember that law is a contest with very specific rules. It has always been our belief that either debt collectors or original creditors COULD win their case against you. To do so, however, they have to get the stuff they need and follow through with it, and these are expensive to do.
When we started Your Legal Leg Up, we knew that debt collectors almost never had what they needed to win if the case went to trial, and we were satisfied that they could not get it in a cost-effective and timely way. But we believed original creditors did have the necessary evidence or could easily get it. We have discovered that this is not true.
We are unaware of any reason why this is so. From our perspective, it would seem to be a simple process to retain the necessary records and do what is necessary to “authenticate” them as evidence (make them admissible in court). Nevertheless it is an observable fact that they often do not obtain or use appropriate evidence, and therefore there must be some reason for it. Perhaps it is the same for original creditors as it is for debt collectors – either they don’t think it’s worth it given the collection risk, or they are set up in a way where getting the information would clog up their systems and increase costs in general. In any event, you can find out if they have the evidence and the will to use them correctly by doing only one thing: fighting their case and conducting discovery. We believe there’s a good chance you will win if you do this.
Counterclaims
The other side of debt defense is using a counterclaim to take control of the lawsuit. We do still regard this as an important thing, if you can do it. That’s because if you can hold the debt collector in the suit with a counterclaim, you can make them dismiss the case “with prejudice,” which prevents anyone else from suing you on the debt. It will also help you repair your credit if you destroy the claim against you.
You will probably never have a good counterclaim against an original creditor, whereas you might get one against a debt collector. Some claims do exist – notably defamation or, for extreme acts, something called the “tort of outrageous infliction of emotional distress,” but the courts have historically been amazingly tolerant of original creditors. Much less so of debt collectors.
But again, as a practical matter, these things have turned out to be less important than they might have been. If you win the suit against another party (without prejudice), they are unlikely ever to sue you again even if they could. And if they sell the debt, the person buying the claim would have little chance against you in court. It also appears to be true that after dropping a suit against you the other side would have less energy and desire to prevent you from credit repair. It isn’t that they like you or couldn’t make trouble, it’s just that they have no financial interest in doing so. This appears to cause a lot of them to take no steps to prevent your efforts to remove their credit references.
Most people being sued by debt collectors just want the suit to go away and are not interested in trying to make the other side pay. This reduces the importance of the other side’s status as debt collector or not.
Conclusion
Therefore all things considered, our materials are about equally effective against debt collectors and original creditors. If the matter goes all the way to trial, you might have a somewhat larger chance of losing to an original creditor, but fighting intelligently will give you your best chance of preventing that from happening. The actual court processes are the same in either case, so you will be prepared to fight.
Sample Deposition Questions 2
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Sample Deposition One
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Deposing a Business Records Keeper
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Affidavits of Original Creditors and Debt Collectors
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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.