If Everybody Defended, What Would Happen to the Debt Collectors?

What would Happen if Everybody Defended Debt Lawsuits?

To get a copy of this article in pdf format, click here: what would happen

Sometimes people ask me what would happen if everybody defended against the debt collectors. Would they fix things and be able to move back to business as usual without a second’s pause? Would the courts let it happen? And what would happen?

A Matter of Scale

To answer this question, consider the scale – first we’ll talk about the national scale, but then we’ll
bring it down to one member’s recent experience, an experience I had many, many times while I was representing people in this type of case.

On the national scale, it isn’t clear exactly how many of these suits are being brought. But there is over a trillion dollars of consumer debt out there, and a lot of it is “troubled.” And that doesn’t even count duplicates or old debt. We’re talking about a gigantic business here. You can see that by the fact that on any given day in St. Louis County – in the middle of Middle America – there are several thousand debt cases pending. That’s one small county in a mid-sized state.

How it actually works

You know that debt collectors buy huge amounts of debt at a time for small amounts of money. They ship them out for collection. The collectors either bug you for the money or just bring suit – they can do either one. They file – I’m guessing here – over a million suits per year, maybe many millions.

They file them in every magistrate court, small claims court, district court… all over the country.

In St. Louis County (which doesn’t include the city), there are ten courts that receive the bulk of these
cases, and it is not unusual to see 400 cases set for one hour of one day in ONE court. I’ve been there on days where there were 800 cases set for hearing. In one court, at the same hour.

One Member’s Experience

Now to discuss a member’s recent experience. He said there were 400 cases in the court his case was set in. He sat there for an hour while ALL of them “went away.”

In other words, the people being sued all either gave up to the lawyer (out in the hall, so the plaintiff related that the case had been “settled”) or the judge, or by default. Of the 400 cases set that day, ONLY ONE person chose to defend. That was our member.

What if People Defended?

Now consider that court again. It handled almost 400 cases in a little over an hour – and then it went
on to other business. What if all 400 people had said “No” and opted to defend themselves?

That would mean that the court would have to set 400 hearings and listen to the arguments one at a time. If they went to trial, it would have to set 400 cases and spend, at a minimum, two hours on each one – a hundred long days.

In ONE HOUR, the court would find itself half a year behind schedule.

Or consider the ten lawyers who handled those cases. Suppose that, instead of giving up, everybody
engaged in debt defense. They asked for discovery, haggled over objections, demanded real proof
of their supposed debts.  In one hour, those ten lawyers would be a full year behind schedule. Instead of collecting $500,000 in judgments in an hour and shuffling those off to the machine to collect, they’d have to work a year for whatever judgments they got.

And they wouldn’t get nearly as many, either. Do you think they could keep doing that?

The System Would Simply Collapse

All over the country, the debt collection business would bog down and come to a screeching halt – the courts would have a backlog of cases two and a half years long after just one week.

I don’t think anyone knows what would happen after that.

If people being sued by debt collectors could just realize it, they’d see that they own the system. It all depends on everybody giving up. Stop giving up, and the debt business collapses. Every defense increases the burden on the system.

Your Legal Leg Up

Your Legal Leg Up is a website and business dedicated to helping people defend themselves from debt lawsuits without having to hire a lawyer. As you can see below, we have a number of products as well as memberships that should help you wherever you are in the process. In addition to that, our website is a resource for all. Many of the articles and materials are reserved for members, but many are available to everyone.

Finding Resources

Our website is both a business and a public resource, and you can use it to find information on a wide variety of debt law-related topics. While many of our resources are restricted to members, of course, many more are free to the public. Please feel free to use it. Every page has a site search button in both the header and footer. It’s a little magnifying glass icon that looks like this:

Click on the magnifying glass icon, and a small window opens. Put in a key word – a word you think relates to what you’re looking for – and enter. You will get a page of results.

Conditional Acceptance and Other Bad Ideas when you’re Sued for Debt

What’s an Admission, and What’s an Answer When you’re Sued for Debt?

For a copy of this article in pdf format, please click here: Conditional Acceptance

Conditional Acceptance Is a Bad Idea in Debt Defense

One of my Youtube viewers told me about some trouble she’d gotten into with something she called “conditional acceptance.” The idea sounded like something she’d gotten off the internet, of course, and it sounded farfetched, but I thought that was all.

I should have known it was another scam going around.

A Little Background

As far as I know, it started with a lawsuit – a petition and summons were served on a woman we’ll call “Ms. Smith.” Instead of answering the petition or denying the allegations, Ms. Smith filed a “conditional acceptance” with the court.  Here’s what she said.

I, Ms. Smith, a living woman, conditionally accept the offer of [Law firm] and [lawyer], upon proof of claim that Law firm and Lawyer bring forth the original contract agreement between Ms. Smith and [original creditor] and contract between original creditor, Law firm, and lawyer, with all parties signed contracts and testify under oath.  If these contracts are not presented to said court, then I, Ms. Smith, a living woman, consider Law firm and Lawyer’s claim against me, Ms. Smith, the living woman, to be a false claim and subject to liability on the part of Law firm and Lawyer.  Please produce and or bring forth the bond for sending me a false claim.

Legal Effect of Conditional Response to a Lawsuit

Legally, Ms. Smith’s “conditional acceptance” was just noise. If you get served with a petition, you must either file an Answer that denies liability or some sort of motion. Failing that, the case will be ripe for either a default (if you don’t answer) or a judgment on the pleadings (if you don’t deny). A lawsuit is not an “offer” that can be accepted, it’s the invocation of legal process, a process that will end in judgment.

It appears that the court in Ms. Smith’s case took some middle ground and seems to have entered judgment for some reason that is still not clear to me.

I have hopes that whatever was done will come undone. If the court granted a judgment on the pleadings, I suspect this shouldn’t have been done without a notice and opportunity to be heard for Ms. Smith. Otherwise the whole thing should be treated as a default and subject to a motion to vacate, which should be granted in my opinion. What is clear from the pleadings is that Ms. Smith thought she was effectively denying liability. She wasn’t, but it was an honest mistake the court should allow to be undone.

But courts don’t always do what they should do by a long shot.

What is “Conditional Acceptance?”

In my research, I’ve run across some of the conditional acceptance “gurus” who think the way to defend yourself in court is by starting every sentence with a conditional acceptance – i.e., starting every sentence with the words, “I conditionally accept your offer to…” They actually called it a “mantra.”

One of the endorsement videos involved a woman who had been arrested for some sort of disturbance, it wasn’t clear what. The video showed her telling the judge she “conditionally accepted” his various offers, most of which were of course not offers but instructions. Then the video broke to a scene outside of court where the woman said she’d gotten off with paying a fine and court costs – jail time had been suspended. The Youtuber asked if she’d recommend the conditional acceptance training to others, and she said “yes.”

And that’s about as good as it gets.

What Law Is

Law is not magic, and lawyers and judges are neither magicians nor subject to magic. The law is a set of requirements that apply to people within the jurisdiction. Judges are supposed to apply those laws consistently over a host of circumstances, many of which were never foreseen. And lawyers are supposed to help their clients figure out what judges will do – or try to persuade judges to allow what their clients already did do.

All of law is really just an elaboration of those ideas. And of course applying that process to the vast number of laws and people that exist in our country.

Using “Magic Words” Only Hurts you

What do you think you’re doing by reciting a formula as a mantra? Legally, you aren’t doing anything good for yourself – you aren’t doing much of anything at all. But this is not to say you aren’t hurting your case, because you are.

The hardest challenge a pro se litigant faces is getting the judge to take what she says seriously, to listen to it and apply the law correctly rather than, as they all too often do, habitually.

You want the debt collector to have to prove its case, and you want the judge to see that it can’t. That means you need the judge to pay attention to you. When you start every sentence with a formulaic mantra, do you think the judge will listen to you? Would you listen to someone acting like that towards you?

The judge will not listen to you if you start every sentence with a phrase you think will have some magical effect. The judge will think you’re an idiot and do what the debt collector asks him or her to do.

Contract Law

I have spent considerable time looking for some basis in legal reality for the conditional acceptance notion. It is apparently some illegitimate offspring of contract law, but there is simply not enough there to refute in legal terms. Psychologically, it would seem to draw from some idea that you can get an advantage by not straightforwardly denying or rejecting something, but instead by modifying it with a “conditional acceptance.”

In law, you get no such advantage, and in court you will be crushed if you attempt to use the phrase to get one.

Your Legal Leg Up

Your Legal Leg Up is a website and business dedicated to helping people defend themselves from debt lawsuits without having to hire a lawyer. As you can see below, we have a number of products as well as memberships that should help you wherever you are in the process. In addition to that, our website is a resource for all. Many of the articles and materials are reserved for members, but many are available to everyone.

Finding Resources

Our website is both a business and a public resource, and you can use it to find information on a wide variety of debt law-related topics. While many of our resources are restricted to members, of course, many more are free to the public. Please feel free to use it. Every page has a site search button in both the header and footer. It’s a little magnifying glass icon that looks like this:

Click on the magnifying glass icon, and a small window opens. Put in a key word – a word you think relates to what you’re looking for – and enter. You will get a page of results.

Memberships

We have quite a few products that will help you with specific issues (you can find them by clicking on the “products” button in the top menu of every page on the site), but most people should consider starting with a membership.

Members get discounts on all products as well as unlimited opportunities to join our regularly scheduled teleconferences. This gives invaluable real-time assistance, answers to questions, help with strategies, and encouragement. You also get the Litigation Manual for free with membership. Find out about memberships by clicking the “About Memberships” link in the menu at the top of any page on the site.

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Why It’s Hard to Find a Good Debt Lawyer you can Afford

Why it’s so Hard to Find a Good Debt Lawyer you Can Afford

For a copy of this article in pdf form, click here: hiring debt lawyers

What Lawyers Need to Charge for Debt Defense Work

In this article we talk about what lawyers need to get in debt cases and why you probably can do better by defending yourself.

I hear lots of different numbers from members who have tried to get a lawyer to represent them in debt cases – there’s no telling exactly what number you’ll hear if you talk to a lawyer regarding your specific case. Probably big. That isn’t necessarily wrong or a rip off in any way – it just reflects some underlying financial realities.

Law is a Business

Most debt lawyers who represent defendants are in it for ideological reasons – this is a type of law where the lawyers choose sides and pretty much stay on them. And as you should know, it pays much, much better to be on the side of big rich corporations than it does to represent the people they’re after. There may be some firms that have managed to automate and mechanize the defense process to such an extent that they can do a good job and make a bundle, but I haven’t seen or heard of them.

As far as I’ve ever seen, representing debt defendants is a very tough business. How does that translate into daily reality?

Daily Realities

First, an established lawyer needs to bill about $150 – $200 per hour. I know that seems like a lot,
and it is a lot, but you don’t just get a lawyer for that money – you get an office and a staff. Or to put it slightly differently, the lawyer has to hire those people and pay for those things out of what she charges you.

When a lawyer takes a case, and “appears” on your behalf in court, it often isn’t easy to “withdraw” from it later if, for example, you don’t pay your bills or if the case goes in unexpected or disastrous ways.

That means the lawyer, as a practical matter, has to charge you up front at least enough to make the case pay, taking his best guess where that case may go. And then hope for the best regarding whatever else you may come to owe. Hence a high retainer – often particularly high in debt cases because… let’s face it… you’re being sued because someone says you didn’t pay your bills.

Uncertainty

Then there’s the uncertainty regarding how much time the case will take – good lawyers often have lots to do, and lots of choices. Taking one case can mean NOT taking another one. A debt case, with relatively low amounts at stake, can be low on the totem pole of priorities.

The Duty to Make Fees Reasonable

The amount at stake – no matter how much you think your case is big – is small for most lawyers, and that raises an ethical issue. Lawyers are supposed to keep their fees somewhat in line with the results obtained.

Does saving you from a $25,000 debt justify a $10,000 bill? Maybe – although if you could afford the $10,000 you probably wouldn’t be being sued. What about a $7,500 debt though? How much fee is justified there?

The average lawyer is caught between a rock and a hard spot in debt cases, because doing a good job takes time. If it’s a big debt, it might allow more time, but getting the fee could get tough. If it’s a small debt, it won’t justify the fee.

And then there’s the learning curve. Most lawyers don’t know debt law, and they don’t know how much they don’t know. The good ones know it could take some time to catch up, but how do they charge you for that? That’s easy to do in a corporate merger involving millions of dollars, not so easy in a debt case where you’re sweating bullets over ten thousand in possible liability.

The bad ones don’t worry about catching up. But you’ll obviously pay for it one way or another, right?

Leverage

We just came out with a product – the First Response Kit – that includes an Answer and a first set of discovery – interrogatories, requests for documents, and requests for admissions. That took about ten hours to create.

Your Lawyer Works One Case at a Time

A lawyer working on your case would probably charge, or want to charge, around $1,500 – $2,000 for doing that. Or would have to do a less thorough job. And that’s just one small example of the way the business works. Every time someone has to show up for your case or do any work on it, someone has to pay.

Or Maybe a Little More

If the lawyer can take a large number of cases, he or she can achieve some economy of scale – that is, can divide the cost of showing up among all the clients who need it on a given day. But it’s tough, and very rare, for anyone to manage this.

The Debt Collector’s Lawyer Works a Hundred Cases at a Time

The lawyer suing you shows up on a hundred cases at a time. That’s because he filed those suits, and it doesn’t matter whether the people being sued want to show up or not – they’re in the case because he put them there. The debt defense lawyer, on the other hand, is representing only voluntary clients. When I was practicing law, I’d send people letters suggesting, more or less, that they hire me. I got a 3–5% call-back rate. That is, only 3-5% of the people I sent letters to even discussed the suit with me.

A union-paid lawyer I knew offered all union employees being sued for debt free representation. And under his circumstances, he could tell them he’d get them off every time. He got a 1% return on his letters.

That meant the debt collector’s lawyer could work 100 times more efficiently at the early stage of a lawsuit.  As the suit wore on, some of that advantage went away, but they never lost it all. And that advantage translated into every document created, every argument made, and every appearance at court throughout the lawsuit.

And that’s why it’s so hard for you to get a good debt lawyer at a price you can afford. Your lawyer is always fighting against a lawyer who can charge less to do more for his or her clients.

There Is a Happy Ending

As uneven as the process is in terms of hiring a lawyer, there is another way. You can represent yourself.

Sure, you have challenges, from scheduling for hearings to learning a bunch of new stuff. But you don’t have to make $200 per hour or worry about cutting corners to justify what you charge. You get the full value of your work, and it is often worth much more than $200 per hour.

And when you make the other side work, you know you’re making them worry because someone is paying their lawyer that $200 per hour.

Of course you want to do a good job, but because the case is worth the full value to you, you can take the time to do a good job. If the time comes when you decide it isn’t worth fighting anymore, you can stop. You’ll lose the case if you do, mind you, but it’s your choice, while a lawyer representing you wouldn’t have that choice and thus must charge you to prepare for the possibility of being stuck in a case.

All you need is a little help doing some of the new stuff that you don’t understand, and you can get that help from us.

Your Legal Leg Up

Your Legal Leg Up is a website and business dedicated to helping people defend themselves from debt lawsuits without having to hire a lawyer. As you can see below, we have a number of products as well as memberships that should help you wherever you are in the process. In addition to that, our website is a resource for all. Many of the articles and materials are reserved for members, but many are available to everyone.

Finding Resources

Our website is both a business and a public resource, and you can use it to find information on a wide variety of debt law-related topics. While many of our resources are restricted to members, of course, many more are free to the public. Please feel free to use it. Every page has a site search button in both the header and footer. It’s a little magnifying glass icon that looks like this:

Click on the magnifying glass icon, and a small window opens. Put in a key word – a word you think relates to what you’re looking for – and enter. You will get a page of results.

Don’t be a “Verification Sucker” – When You’re Not in Kansas Anymore

When a debt collector sues you as the first thing you hear from it (they can do that), this does not give you a right to dispute and require verification. Your rights are through the legal process, and you must answer the petition or you will be defaulted. Sometimes debt collectors use people’s confusion over their rights and do things which suggest you could dispute the debt. This video discusses your rights.

You would be amazed how often people ask me whether they should “just send a verification letter” to the company or law firm when they get served with a debt lawsuit. Or as one person put it, “now that I’ve called the court to tell them I object, should I just send a verification letter? Or was that enough?”

No. It wasn’t enough – it wasn’t even anything at all.

Dispute and Verification

Click here for a copy of this article in pdf form: Don’t be Verification Sucker

Let’s take a quick step back here and review some facts and some rights.

When a debt collector first contacts you regarding a debt it is attempting to collect, it is required by law to provide you certain information. If the contact is not in writing, it must send you a notice in writing. If the contact is in writing, that contact must contain a notice. That notice must inform you of the debt collector’s identity, the nature and amount of the debt in question, and your right to dispute the debt and require verification. People often refer to this notice as the “verification letter,” although more properly it’s a notice of the right to dispute the debt. If you dispute, they must verify the debt before attempting to collect again, and you have thirty days to dispute the debt.

If they don’t want to attempt to collect again, they don’t need to dispute. It’s a law supposed to prevent continued attempts to collect on an unverified debt.

A Lawsuit is NOT a First Contact

If you’ve never heard from a debt collector, can they sue you for a past due debt? And if they do, must they give you notice of your right to dispute? Yes. And no. They can sue you without first bugging you for money. If they do sue you, the lawsuit is NOT a contact that triggers your right to dispute and verification. That’s what the Fair Debt Collection Practices Act (FDCPA) says, and the reason for that is simple: you’re in the court system and play by court rules once a lawsuit gets filed.

You Must Answer

And the court rules are that once you get served with a lawsuit you must file an Answer (or other “responsive filing” – a motion to dismiss, for example) or you will be in default. Put another way, if you don’t respond in court with an Answer denying liability or a motion to change or get rid of the lawsuit, you will lose. The lawsuit changes the rules, and you “aren’t in Kansas anymore.” [That’s what Dorothy says in the Wizard of Oz when all the weird things start happening.]

Don’t be a Verification Sucker

The debt lawyers know the rules very well, and one would like to think that it’s only an “excess of caution” that causes them sometimes to print the FDCPA language on their lawsuit. But given the fact that so many people have sent dispute letters instead of answers, and the fact that the debt collectors KNOW this, that might be naïve.

What I’m here to tell you is that whether or not such language is on your lawsuit, YOU MUST ANSWER THE SUIT or face a default judgment. Don’t be a sucker – file an Answer or other responsive document within the time allowed by the rules of civil procedure. You must defend yourself in court – you’re not in Kansas anymore, and the FDCPA no longer applies.

A Little Window, Maybe

Litigation does not technically rule out the FDCPA entirely, just the “first contact” rule. It may be that the debt collector’s attachment of the notice to a lawsuit is itself a violation of the FDCPA, as it may be an attempt to sucker you into seeking verification instead of answering the lawsuit. It might be an unfair attempt to get a default judgment. I have argued as much before. That might give you a counterclaim to their lawsuit.

And if you have sought verification rather than answering, and they got a default judgment, you should certainly consider moving to vacate that judgment either on the basis of that deception or your own confusion. The courts favor judgments on the merits rather than technicalities, so there’s a very good chance such a motion to vacate, if filed in time, would work.

But these are not exceptions to the rule that you must respond to the lawsuit in court. If you get sued, the FDCPA no longer applies in that way. You must respond or they will get a default judgment against you, and the next you will hear about it will be when they garnish your wages or bank accounts. Don’t let that happen.

Disputing and demanding verification would be much easier, no doubt, but it doesn’t work at this point.

Don’t look for the “easy” way. Look for the RIGHT way.

 

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Library of Glossary Videos

Library of Glossary Videos

The videos on this page are part of our glossary and our efforts to make the public more aware of it. You will find a brief description of the videos and a link to the page on which they occur.
Click here for the Glossary.

Glossary: Introduction Video

Glossary: Assignment

Glossary: Business Records Exception Video

Glossary: Charge-offs

Glossary: Dismiss, Dismissal

Glossary: Evidence – What Makes Something Evidence

Glossary: Small Claims Courts

Glossary: Statues of Limitations

 

The Best Defense is a Good Offense

Debt Law and Motions for Summary Judgment

Get a copy of this article in PDF format: Sometimes the Best Defense is a Good Offense article

If you’re being sued for debt, your case is going to head for a show-down on a couple of main issues. These will probably involve some billing records or some record-keepers wanting to testify. And these are primarily “legal” issues – that is, the facts may be clear and undisputed, and the judge might be able to make the important decisions in the case. When a judge does that by motion and before trial, it’s called a “summary judgment,” and the parties ask for that by filing a “motion for summary judgment.” You will want to consider trying this.

Before we get deeply into motions for summary judgment, let’s discuss the way cases develop, go away, or are decided. It’s really just one process after the case is filed and you’ve answered.

The Way Debt Cases Develop

First, the parties conduct discovery which aims to find out what facts are, indeed, uncontested, which ones are disputed, and what evidence there is in support of them. What this really means is, discovery looks for what you can prove about your case or their case. In debt law, you either want to prove it was all a horrible mistake (if that’s what’s going on) or that the debt collector cannot prove its case. Since most debt cases come from what were at one time legitimate debts, most debt defense boils down to an attack on the debt collector’s case. And you will have an excellent chance of winning.

In your discovery, you will probe for what evidence they have and how they plan to get it “into evidence,” i.e., into the court’s consideration at trial. (Incidentally, our Discovery Pack is designed to help you do this.)

As facts emerge, and as work happens and becomes necessary, the debt collector might decide to drop the case. In fact that often happens, and of course it often doesn’t, too. Sometimes the debt collector will try to shorten things up by motion for summary judgment, but more usually they just want to get to trial as quickly as possible. If they do either one of these things before you have conducted your discovery, there’s a good chance you will be snowed under. Thus you should do your discovery quickly.

You want to aim for the motion for summary judgment right from the time you file your answer. If it doesn’t work, well, you’re halfway to being ready for trial anyway, and you will have started talking to the judge about the issues that matter.

Now to talk more specifically about motions for summary judgment.

Motions for Summary Judgment

A “motion” is just the formal way you ask the court to issue a ruling of some sort. A motion for summary judgment is asking the court to find that all the necessary facts for a ruling in your favor have been established, and to grant you a judgment as to them. It’s possible to get a summary judgment about some parts of a case but not others (a “partial summary judgment” in legalese).  To end the case, you have to get a judgment on all of the claims.

What to Do

If you are being sued, you need to begin with the ending in mind. That is, right from the beginning you should think long and hard about what it takes to win your case. In debt law, the first big challenge most defendants face is to answer the petition – just to take that first step in defending yourself. If you’ve managed that, congratulations. Just by doing that you’ve given yourself a better chance to win than approximately 90% of the other people being sued. And in some cases, to be sure, that’s all you need – the debt collector may walk away right now. But in most cases they won’t.

So your next specific step is to start discovery – the sooner the better. And you should start discovery with the firm goal of finding and proving the things you need to win. We have a product that can help with that, but this video is about the next step following discovery: the motion for summary judgment.

In a way, it’s simple, although this is one time you should never confuse “simple” with “easy.” If they’re alleging a breach of contract, for example, you will discover that they must prove the existence of a valid contract, its breach (failure to pay as agreed), and damages. The burden of proof is on the debt collector as to each of these things, and they have to show it using admissible evidence.

In your discovery, you should have narrowed down exactly what they have to offer as proof. In the case of a debt collector this is usually documents created by some other person, usually the original creditor. And they may have documents or testimony by some of their own employees as well. This material is generally intended to try either to fool the court into believing the other evidence is admissible, or to pull it within the rules of evidence.

Your job will be to look at each bit of evidence and show why it cannot do what the debt collectors want it to do.

Filing a Motion for Summary Judgment

Of course this isn’t very easy, and there are significant procedural requirements, but going through this process increases your chances of winning dramatically in three important ways. First, if you can show your right to a summary judgment, you should win the motion and get the case kicked out. Before that happens, though, you will be putting the plaintiff to the expense and effort of responding, and if they think they will lose (and often even if they think they will win), they’d rather just drop the case than keep going. And finally, even if the court does not rule, or rules against you, you will have learned a tremendous amount about the law and begun the process of teaching the judge what he or she needs to know, improving your chances of winning at trial a lot.

There’s every reason to do it. You just need the energy and courage to try. We can help.

Product Information

Because much of this article involves taking action and creating legal document, we include an addendum of the products we have that can help. First, if you are at the beginning stages of your case and needing to answer (or otherwise respond to) the petition, our First Response Kit is designed to help with that. If you have already answered and need to start (or restart) conducting discovery, our Discovery Pack will help. The Discovery Pack is included within the First Response Kit, so don’t get both. If you are trying to force the debt collector to respond to your discovery, you may want our Motion to Compel Pack.

If they’re filing a motion for summary judgment and you are not ready to file a motion for summary judgment yourself, our Motion for Summary Judgment Defense Pack could help. But if you want to respond to theirs and file one of your own, you will want our Cross-Motion  for Summary Judgment Pack. And if they haven’t file a motion for summary judgment but you want to, that would be our Motion for Summary Judgment Offense Pack. Don’t get more than one of the MSJ packs.

Memberships

Members get discounts on all products as well as unlimited opportunities to join our regularly scheduled teleconferences. This gives invaluable real-time assistance, answers to questions, help with strategies, and encouragement. You also get the Litigation Manual for free with membership. Find out about memberships by clicking the “About Memberships” link in the menu at the top of the page.

Sign Up for More Information

You can sign up for free information from us by clicking here and following the instructions.

If you sign up, you will receive a series of videos and articles over the next few days designed to help you get a grip on debt litigation. Then we will occasionally send you information on new materials we have added to the site. This is rarely products and almost always new publicly available articles. You will not receive sales messages regarding other products, nor will we sell your information to any third party.

Accept for Value

Magic Words that Solve every Financial or Debt Problem? Don’t Buy it.

Get a copy of this article in PDF form here: A4V article

PL 73-10

Acceptance for Value

You may have heard of one of the magic-word fads going around lately, the “Accept for Value” response to bills. As you will see, it supposedly invokes certain very specific formulae to accomplish something that would seem to be impossible to anyone using common sense. As with most of the “magic word” fads, this one will get you in big trouble if you try it. Don’t.

A4V Sellers

I have had a chance to look at several accept for value videos and sites. They’re a little cagey, and it isn’t clear whether there is one main source and theory or whether there may be variations with slight differences. Often enough, of course, one person comes up with an idea, and then a lot of people copy it, adding bells and whistles both as sales gimmicks and also to differentiate themselves from the competition. That appears to be the case with the accept for value “movement.”

In any event, I’ll discuss them as if they’re one idea – if you encounter something a little different, look for the fundamental similarities and don’t get too hung up on specific words.

The Basic Idea behind “Acceptance for Value”

The idea behind “accepting for value” defies common sense. It appears to be based on a belief that everything is free – or “already paid for,” which is the same thing. Naturally, there’s a conspiracy keeping people from knowing this or from using their free resources, and the advocates of acceptance for value are the only ones who know the trick of how to do it. They say. It involves some special forms and formulas we’ll be discussing.

A Few Words of Commons Sense to Get us Started

Before getting deeply into the mechanics and theory of the “accept for value” idea, consider: if you were creating a law that you wanted to apply to everyone, would you write it in secret code that only a few people could understand?

Of course not. Now, not all laws are crystal clear (in fact, really none of them are), but they are designed to be known or knowable to everyone – because otherwise how could you expect people to obey them? And laws are meant to be obeyed, mostly.  Whenever someone tells you there are “secret laws” or secret forms or language to use to obtain some publically available thing, you should instantly be deeply skeptical. It’s almost always a scam.

If everybody had an account, and the money was already there for everyone to get whatever they wanted, wouldn’t it make sense that politicians would LOVE to tell you about it? Some bad-guy bankers might not want it, since they couldn’t screw you out of money, but most politicians would love to tell you about it.

And if everything is free, why would the bad-guy bankers even want your money? If everything is free, what’s the point of being rich? This theory will only appeal to those who are so desperate they are willing to believe just about anything.

How to Accept for Value

Okay, let’s move on to the way acceptance for value is supposed to be done. To accept something for value, you apparently have to follow a specific formula:

  • On your bill, you write “Accepted for Value, Exempt from Levy.”
  • Then you sign and date it, and write “pay to the order of” your name in all capital letters, and put your Social Security number down twice – once with dashes, and once without.
  • In some variations, apparently you’re supposed to make some reference to the US Treasury or the IRS, a thing they very much do not appreciate, by the way – they’ve put out circulars referring to laws that make it illegal and calling the whole thing fraud.

It’s not clear whether anyone has ever gone to jail for trying the scheme, but it seems pretty risky to make any reference to government entities. Any suggestion that they will be the ones paying would be flirting with trouble for sure.

It would appear that the form used is intended to call to mind the form of a check, with your social security number being the account number. I believe one Youtuber said that was the idea, and that’s consistent with the main theory behind this idea, which is that when anyone is born, the government (or federal reserve, or whatever) creates a bank account in your name.

In some videos, they say to send the bill with the stuff written on it to some government agency, in some they don’t mention this, but regardless, when you do what you’re supposed to do, the debt is discharged. It’s paid by the government!

One Youtuber compared it to playing a game of Monopoly where each player starts off with a certain amount of money as part of the game. It’s automatically created and given to you when you join the game. Your using the magic formula is the way you access your game money.

Real Life is Not a Game of Monopoly

The problem is, this is not a game, and the real world does not work that way. You don’t start off with money, and things are not free.

When I make things for people to use, it takes effort, and I want to get paid for that effort. When you go to work, you want to get paid. Can you imagine the outrage you would feel if, at the end of the week, your boss simply handed you a slip saying that your work had been accepted for value?

A company doing that would soon be out of business.

If you start returning bills with “accepted for value” written on them instead of including payment, you may find yourself out of business as well. This is such basic common sense, and so plainly obvious, that it takes a lot of theory to gloss it over. And the accept for value idea has a lot of theory.

The problem is, the theory doesn’t work.

The “A4V” Theory

It all goes back, they say, to House Joint Resolution 192, June 5, 1933, Public Law 73-10, the law that  “stole the people’s gold” – but made up for it by making everything free. As one person put it, “Your house is already paid for; your car is already paid for. You just don’t know it.”

The Gold Standard

Joint Resolution 192 goes back to the early 1920s and the aftermath of World War I. One thing about war is it is very expensive and tremendously destructive, right? Prior to World War I, most governments in the world were on a gold standard, meaning that if one country bought more stuff from another country, they settled the difference by paying gold.

During World War I, the governments ran out of gold, though, and started paying with their currencies.  These, too, were theoretically backed by gold, and in 1920, if you wanted, you could go to the bank and exchange a dollar bill for a specific fraction of an ounce of gold. At the end of World War I, however, the governments owed large debts to businesses and other governments. They didn’t really want to pay them, of course, because who wants to pay a debt?

What governments can do about that is print more money.

Inflation

If I owe you a dollar but have a good printing press, I can just print up a new dollar to give you. Costs me practically nothing, right?

Well, Germany did that in 1920 in order to pay some of the reparations it owed for World War I, and the value of a German mark went from maybe 2 per dollar to over a billion per dollar and that was just before they stopped counting. It was cheaper to burn paper money than it was to buy logs for heat.

That was pretty extreme, but all the governments of the world, just about, had some lesser variation of the problem, and they were all printing up money as fast as they could go.

The Gold Clauses

Creditors don’t like lending money that is worth a lot and getting back money (in debt repayment) that is worth much less, so they began putting what were called “gold clauses” in their contracts. These attached the amount of money being lent to a more objective standard, the price of gold (for example). So they might say, “in exchange for $25,000, which is currently the equivalent of 50 ounces of gold, borrower agrees to make 100 payments of the equivalent of ½ ounce of gold” (along with other terms, of course). That way, the lender would get back the same value it had lent.

In a way it was fair, right? To make you pay back the same value as you had borrowed? But the problem was that so many people, and governments, couldn’t do that. So they passed a series of laws forbidding that (called the “gold clause abrogation laws”). Some of the laws prohibited equating debts to amounts of gold and required that they be named only in the local legal tender; other laws made sure that payment could always be made in that legal tender and that nothing else could be required.

You might say it was a huge rip off because it allowed debtors to pay big debts with little value and prevented creditors from protecting themselves.

House Joint Resolution 192 was a gold clause.

Legal Tender

Put another way, it was a “legal tender” law which made all debts payable with bank notes rather than gold, and required that they be denominated in dollars rather than expressed as something else. It also underlined the relatively new legal reality that “federal reserve notes” were legal tender (but that’s a story for a different day).

It was indeed a (good) break for people who owed money, and a very bad break for creditors
who knew about inflation and had taken steps to protect themselves from it.

But it didn’t make anything free for anybody.

The “Accept for Value” Fraud

The story behind the A4V idea is an interesting story about the way government manipulates money and favors one class over another. It’s also an interesting story of the ways the Constitution can develop in ways exactly opposite of the founders intended. But what it isn’t is a story of the government giving away stuff for free to YOU. That’s the fraud the acceptance for value people have added so they can sell it to you. Don’t fall for it, and be assured that no judge ever will.

Using the accepted for value argument will bring you only disaster and loss.

 

Why Defend Yourself from Debt Collectors

Why you Should Defend against Debt Collectors, and Why you Can Do it Yourself

Get a copy of this article in PDF format by clicking here: why defend yourself

When you are sued by a debt collector, you are presented with two questions that often merge into one because of money.

  • Should you defend yourself (at all) from the lawsuit?
  • And if you do defend, do you have to have a lawyer?

A lot of people answer the second question first. They decide they need to have a lawyer in order to get anything done, and then they decide they cannot afford a lawyer, so they fail to defend themselves at all. This is a mistake.

First: Should you defend yourself?

Our answer to this question is absolutely “Yes.”

There is a tendency for people to think that lawsuits (filed against them) are only filed because the lawsuit is “good,” and that the plaintiff will or should win. That isn’t really true of any kind of lawsuit. In most kinds of law, however, the plaintiff’s lawyer will have done some research into the law and facts and will have some confidence that it’s a winner. After all, in most kinds of lawsuit, one expects a defense – the lawyer anticipates spending a considerable amount of time and money on the case before collecting anything significant.

And most plaintiffs are at least somewhat reluctant to start a lawsuit because of time and expense; often they are extremely reluctant, and with good reason.

Debt Law is Different

These things are simply not true of debt cases. In debt cases, a debt purchaser buys hundreds of thousands or millions of dollars of supposed debt and files suit without ever doing ANY research into the validity of the debt at all. When they file suit, very few debt collectors have any idea at all of whether they have a right to the money, and they have little, if any, evidence of the debt. They think they might be able to get some if they have to, but they file suit expecting not to need any evidence at all. And they’re usually right.

They Expect you to Give Up

They design their cases to cause people to give up without fighting. Since most people, in fact, do give up one way or another, the whole debt collection business is based on not spending money or time on a case.  As soon as you do anything at all to defend, you cause the company to diverge from its business model. Of course, they know some people won’t just give up – they know people hate them, after all. So even though you have stepped out of their business model by resisting, you haven’t really challenged them yet. To challenge them, you must make them spend time and money on your case alone. We’ll discuss that below.

What if you Don’t Want to Fight?

Actually, NO ONE really wants to fight. It takes time and involves various uncomfortable feelings, from insecurity to anger, to frustration. You will at some point need to weigh these lifestyle questions, but the appropriate place to start is with the legal questions. And our answer to those is that it makes sense, always, to fight the debt collector.

Regarding the more practical questions, it is also usually true that fighting the debt collector will pay off very well. For example, if they’re suing you for $5,000, it’s a fair bet that they have already damaged your credit, and they are obviously trying to get at least $5,000 from you. If you defend yourself, you can save the $5,000 and repair your credit: what hourly rate would that be if it took you 50 hours of your time? $100/hour.

And the amount at stake is often much more than $5,000, and the time required to defend often much less than 50 hours, but you will have to make your own estimates of these things.

What if you Really Think you Owe the Money?

We get this question a lot because for most people, debt lawsuits are not “lightning from a clear blue sky,” as the saying goes. They know they haven’t been paying some bill, and people have often been bugging them about it. So should you still fight?

Yes, absolutely.

And this is because although you think you owe money, you might not owe the person suing you the money, and you might not owe what they’re suing you for. On top of that, and behind our legal system, is that you only “owe” what they can prove you owe – and most debt collectors cannot prove you owe anything. So even if you think you owe, you should fight to make sure you’re dealing with the right person for the right amount – and that they can prove it.

What if you Want to Settle?

If you hope to settle, you still need to start out by fighting – people only settle lawsuits when they think doing so is the best outcome for them. In other words, they’ll settle if you persuade them that they’ll make more money by settling than by not settling. You do that by fighting – nothing makes them think the case is going to take money to win than by making them spend money. That’s just common sense, right?

Do You Need a Lawyer to Defend You?

The answer to the question of whether to fight or not is almost always “yes.” And if you doubt that, consider how many times corporations simply roll over when people sue them – it almost never, ever happens. You know that, right? But even if you decide you should fight, you have to decide HOW to fight. Do you need a lawyer? or can you do this by yourself?

Remember what we said about “most” lawsuits – the lawyers do back up work and have a pretty good idea they deserve to win. Additionally, they typically expect to, and do, spend quite a bit of time and money to make sure they do win. For these reasons, and others, you might not want to handle a typical lawsuit pro se.

Debt law is not like that at all.

Debt Law is Different

We discuss this question in great detail in a lot of places, and therefore we will only touch on it lightly here, but debt law is not like other forms of litigation. It will almost always come down to a dispute about whether certain records should be allowed as evidence. And of course you need not to admit or do things that will hurt you. You almost certainly will not need witnesses, and they probably won’t have any, either. Thus debt law is relatively simple, and people can defend themselves without a lawyer.

We can help you do that in a lot of ways.

You will find a lot of help on many topics related to debt law on this site by using our search button at the top of the page or in the footer. And you can sign up for free information by going to this link and signing up. Sign up for Free Information.

 

 

 

 

Motions in Limine – to Exclude Evidence

What Pro Se Debt Defendants Need to Know about Motions in Limine

You can get a copy of this article in PDF form by clicking here: motions in limine article

In this article we discuss a sort of motion that we think pro se parties underuse – motions in limine to exclude evidence at trial. They give you a chance to explain how the rule against hearsay prevents documents created out of court from being used as evidence unless there’s an exception. And they give you a chance to show how the plaintiff’s evidence does not meet the exception it’s planning to invoke, the business records exception. On a motion in limine, you can make your arguments before the trial begins, when things are likely to be overlooked in the heat and action of the trial.

What are Motions in Limine?

Motions in Limine are motions filed before trial. “Limine” is Latin for “threshold,” so these motions are usually brought right before trial, when it’s pretty clear what the other side plans to do.

They are usually directed at evidence, but they could also be directed at legal theories or arguments.

Why Use Them?

Like other parts of litigation, they are directed at the legal merits of the case but could have their most powerful impact on negotiations. Thus you bring your motion and attempt to win it for legal reasons, but if you do manage to win it, you will be able to keep the debt collector from putting on the most important parts of its evidence. And if that happens, it may give up without your needing to go to the trial at all.

Thus motions in limine can be very significant turning points. Or they can simplify matters for you at trial if that happens.

There’s another reason for pro se parties to use motions in limine. As a pro se party in a system run by lawyers and judges, it can be hard to get listened to. Judges may or may not mean to pay more attention to lawyers, but they themselves WERE lawyers, their friends are lawyers, and lawyers are the ones they see day in and day out.

They naturally pay more attention to them for just those reasons.

And then there’s the fact that lawyers understand the system and are trained in it. They can do dumb things, of course, but usually they don’t. Judges know that, and they know that pro se parties lack this training, so they naturally take what you say with a grain of salt.

And then there’s the fact that trials move very quickly, and the judge will be watching the clock very carefully. Will everything you say get heard? Not at trial.

You have a much better chance to get heard at a hearing on a motion to exclude. That will give you a chance to make an impression on the judge, explain some of the legal concepts behind the case, and make your arguments regarding evidence at a time when the court is freer to give what you say some thought. And it helps the judge get to know you a little bit and to be reminded of certain rules of evidence.

All of these things are absolutely vital to your chances of success.

What Motions in Limine are NOT

Motions in limine are not motions for summary judgment. That is, you could argue in a motion in limine that the other side should not be able to introduce certain evidence or make certain arguments, but a motion in limine is not the place to ask for a ruling on the entire case in your favor. For that you need a motion for summary judgment, and this comes much earlier in the process.

What Happens after a Motion in Limine?

What you’re hoping for is a ruling on the spot that the debt collector will not be able to use certain evidence or arguments, and that does happen sometimes. More often, perhaps, the court will withhold its ruling until the debt collector tries to use the evidence. The theory behind this is that the court wants to judge from the context of the case whether the evidence is necessary and fair.

In reality, courts should not wait on most of the issues you’re likely to move on. That’s because your arguments will likely be addressed to the legal admissibility and sufficiency of the evidence, and no amount of case context can substitute for presenting the necessary bases for the business records exception, for example. But courts can be reluctant to rule on a motion that destroys one party’s chances of winning before trial.

Timing

While you could bring a motion in limine fairly early in a case, the court will likely not rule on it before the eve of trial. And either the court will order, or your local rules may provide, a date before which motions in limine must be brought.

In other words, there’s going to be a deadline for filing your motion. You need to know that deadline and abide by it. Most typically what happens is the court wants lists of witnesses and exhibits a week or two before trial, followed by a (final) pretrial conference. You would write your motions in limine in time to be heard at that final pretrial conference.

Work on Motion in Limine

In a debt case everything about their case is predictable, even if you don’t know for sure what they’ve got.

Where the person suing you is a debt collector, you know that the debt collector’s case depends on getting some bills that it did not create into evidence. You should know (from discovery) exactly what those bills are and where they came from long before trial. And you also need to know how they plan to get them into evidence. You find these things out through the discovery process.

Rulings on Motions in Limine are not Permanent

Rulings on motions in limine are subject to change. The court could grant your motion before trial and then change its mind, or vice-versa. That means you will still need to object at trial – or be prepared to argue even if you won – in order to protect your rights. And if you lost, you should take another shot at it. Don’t be intimidated – the court will tell you if it is willing to hear your arguments or not.

What makes motions in limine useful is that they give you a chance to make your arguments in the cool light of reason rather than the heat of trial. That might be your best chance to get heard for the pro se.

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