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The UCC is NOT a Defense to Debt Collectors

Uniform Commercial Code (U.C.C.) and Debt Law – Fact and Fiction

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The Uniform Commercial Code (UCC) offers no special protection from debt collection or debt collectors, and trying to use it that way will quickly lead to a judgment against defendants. Avoid this scam.


There is an extremely vocal group of people who think that the U.C.C. offers special protections from debt collectors. They choose snippets of the text of the U.C.C. and highlight them in numerous videos on Youtube and in their other promotions, and they attack anyone who contradicts them. Like the (very similar) Strawman theory, however, the U.C.C. is a slender reed to support your hopes of avoiding or defeating creditors and debt collectors.

In fact, it does essentially nothing to help debt defendants. We’ll discuss the U.C.C. and then tell you what you should be doing instead of tripping over strawmen.

What is the Uniform Commercial Code?

The U.C.C. is just a model of commercial legislation for state governments to use in designing their own commercial laws. In itself, it has no legal force whatsoever, but all the states have adopted some parts of it, so most of the provisions of the UCC are incorporated into various state laws. Oddly enough, perhaps, the “Uniform” Commercial Code is NOT uniform – its drafters could not agree on every provision, and so there are competing provisions which are not the same, and thus state laws can vary on important parts of the commercial code.

Because of the federalized times we live in, and because most people confine their legal affairs to just one state, our daily lives rarely expose us to different state laws and their consequences. Still, state laws can differ both from state to state and from state to federal, and they often overlap in ways familiar to most lawyers (but out of the site of non-lawyers). The U.C.C. was designed to smooth out the way the laws overlap.

It all sounds non-controversial now, but at the time it was a big step towards protecting and encouraging interstate commerce, and in fact the U.C.C. was under construction at about the time the interstate highway system was developed.

How the UCC was Created

The U.C.C. was created by two nongovernmental legal organizations: The National Conference of Commissioners on Uniform State Laws, and the American Law Institute.  The document, standing alone, has no legal authority or power at all.

This is not saying the UCC is not significant – just that it is a document created by a bunch of academics that has no independent force or impact on anybody. So why is the UCC a big deal? It’s a big deal because all the states have adopted some portions of it. The UCC was designed to help legislators bring order to what was there, not force them to have the same laws. Remember, legislatures make laws, not think tanks.

The parts of the U.C.C. that have become law in your state will be reflected in your state laws, and you should look for the law in your state laws and not the U.C.C. itself. When people say “the U.C.C. does this or that,” or “requires this or that,” they’re showing you they do not understand the law. Don’t look to these people to tell you how to beat the debt collectors. Likewise, since the portions of the UCC that were adopted are just part of your state law they do NOT trump other laws and have no special, magical power.

The UCC Was Created to Serve Businesses, not Consumers

The main concerns of the drafters of the U.C.C. were the rights and abilities of businesses in relation to each other. The drafters believed that a set of laws that made businesses more predictable and reduced conflict would benefit everyone, but their concern was with business, not consumer, protection. A mere glance at the document will prove the point – it defines “bills of lading” and discusses where legal responsibility and risk shift from party to party in commercial transactions and things like that rather than the issues that concern consumers. Where the issues do have an impact on consumers, there are usually laws that override the U.C.C. and specify consumer rights.

There is almost no discussion of debt at all in the U.C.C. or in the state laws enacting it. Debt, and most particularly consumer debt, has primarily been addressed by a series of federal laws like, for example, the Truth in Lending Act and state laws based on these federal laws.

You CAN beat the debt collectors in many cases, and without even having to hire a lawyer – but your solutions will most often be in consumer protection laws like the Fair Debt Collection Practices Act or Fair Credit Reporting Act, or in the normal rules of the court.

We help you do that.

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.

Products Related to this Article

We have no products related to this article because you the article addresses your fundamental approach to debt defense. You would probably find our memberships useful, however, and we have materials designed to address specific situations as they arise.


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 and the Three Weaknesses Report for free with membership. Find out about memberships by clicking the “About Memberships” link in the menu at the top of the page.

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What you will not receive is any marketing from other people – or much from us, either. Our goal is to make the site more useful to members and visitors, not to swamp anyone with sales materials. The information we send will have links to information or products that we think may be helpful.

No Magic – Sometimes a Rain Dance is Just a Dance Part 1


Sometimes a Rain Dance is Just a Dance – – and it Rains (Pt. 1)

Have you seen some of those sites by people who have been sued by debt collectors? They start out saying something like “I was sued by a debt collector and won. Let me show you how I did it…”

Everybody’s an expert. And capitalizing on a person who is being harassed by debt collectors’ natural distrust and dislike of lawyers, this new expert is going to show you a way to defeat the debt collectors. Just like he or she did. You’ll learn from someone just like you – someone you can trust.

There is a problem.

As you know if you have spent much time on my site, sometimes debt collectors drop lawsuits simply because you file an answer. Sometimes a debt collector will stop harassing you because you seek verification of the debt. Sometimes they’ll drop a suit because you request discovery – sometimes they’ll drop the suit because you show up the first day. Sometimes they don’t even show up. I hear stories like that all the time. And for you, as a defendant who has been harassed by a debt collector, the relief is wonderful.

But it doesn’t make you an expert. It makes you “lucky.”


I put “lucky” in quotation marks because in almost all the scenarios above, you had to take some action to trigger the dismissal by the debt collector. Just by taking some action – good or bad, right or wrong – you are, as they say, putting yourself “on the side of the angels” – you’re helping to make your own luck. And if you get lucky and win you deserve it, in my opinion.

But there are right things and wrong things you could do at every stage of a lawsuit. If you do the right thing, your chances of winning go up. If you filed something that wasn’t the right thing but still happened to win, for every 100 people who follow in your footsteps, 98 of them will lose and wonder why. And the reason is, that without understanding the debt collectors and debt law, anything you do is just a dance – it happened to rain for that guy in Texas that one time, but it still wasn’t a rain dance. You do that dance and you’re going to get burned.

That make sense? The more you know, the better the chance you will do the right things that make it more likely the debt collectors will walk away or that you will still win even if they do not walk away. This is where YourLegalLegUp, with a long history of helping a lot of people in widely different situations win a lot of cases brings something to the table most sites do not. The value of experience, practice and knowledge.

In the next part of this article we will look at the steps of litigation – how each one presents you an opportunity to get lucky – and the better you do them, the more likely you are to get lucky. Sometimes a Rain Dance is Just a Dance (Pt. 2)

No Magic – Sometimes a Rain Dance is Just a Dance Part 2

Sometimes it just rains.

This is the second part of this article. Click here for the first part. In the first part we talked about how people sometimes get lucky in defending themselves from debt lawsuits, but that doesn’t make them “good” – it makes them lucky. The question is, how can you increase your chances of being lucky, too. Should you do what worked once for somebody? or do what has repeatedly worked for a lot of people in a lot of ways over time? The answer is obvious. The rest of this article talks about how you can be lucky, too.

How Debt Lawsuits begin

A debt lawsuit starts with a “petition” – although it is sometimes called a “complaint,” and there may be other names for it, too: it’s the statement that you supposedly owe the debt collector money, some legal reasons why the court should order you to pay, and a “request for relief” (also known as the “wherefore clause”). The debt collector files this petition with the court and needs no permission to do so. When they file it, the also get a summons.

Some courts let the debt collectors issue the summons, too, although technically it comes from the court. The debt lawyer, as an _ of the court, writes it up, a clerk stamps it (or they may come pre-stamped), and the power of the court – over the case and over you – has been invoked. The summons tells you when to be at court and what to expect (“default judgment for the amount sued upon”) if you fail to show up. In all courts of which I am aware, proper service of the summons, which can happen in several ways, is necessary for the court to have jurisdiction over you.

What the debt collectors know is that somewhere between 80 and 95% of people who are served will not show up in court. If you do show up, and the other side does not – you should immediately ask the case be dismissed, and many courts (perhaps most) will grant that motion. That would be lucky – but only if you were there and knew enough to request the court to dismiss the case, as absent the request the courts will often simply continue (postpone) the case until the next court date.

Assuming the other side actually appears for court as scheduled, your next step is either to move to dismiss the case or answer the petition. Check your rules to see what the rules of pleading are, and if the plaintiff’s case does not comply – and they almost never do in Pennsylvania, for example – you might file a motion to dismiss or its equivalent (Preliminary Objections in PA). Often enough they don’t comply in whatever jurisdiction you may be in, and a motion to dismiss can be a quick way out of the lawsuit. Or you file an Answer. Whichever action you take, the debt collector might choose to walk away from the suit at this point: as I have often pointed out, there are a lot easier people to chase than those who file bothersome Motions to Dismiss or Answers.


Often the debt collector will not walk away at this point, so the next thing you must do is both serve discovery on it and answer discovery if they serve it on you. It is important for anybody to serve discovery on the other side first, but especially for pro se debt defendants: you would never believe the games the debt lawyers play – you want to see those games in action before you start responding to their discovery.

Sometimes the mere service of discovery drives the debt collectors away, but most often, of course, it does not. You will receive vague and unresponsive “answers” like “pursuant to national banking regulation, credit card applications need not be retained beyond a period of two years” (What does that say, anyway?) or “Plaintiff is conducting a search for records and will make them available to defendant as they come into Plaintiff’s possession.” It is the task of the pro se defendant to push past these objections and vague statements to discover what, if anything the debt collector has, and to force it to admit it has nothing more. This, of course, is the reason for a motion to compel. If you do that appropriately, the chance of the debt collector dropping the case is actually pretty good.

Not Bad Faith or Frivolous

Performing legal actions with no reason other than to increase the cost and effort the other side must undertake in order to win its case is “bad faith” in litigation. An action with no reasonable basis in law or fact is “frivolous.” Both of these sorts of forbidden actions and motives can create significant problems for a person caught doing them. None of the actions listed above, however, come anywhere close to these forbidden zones: they all accomplish purposes for which the discovery and pleading rules were designed. The motions seek to weed out unwinnable claims, and the discovery probes the other side to find out what, if anything, they have in support of their claims. Following this broad pattern, you are not only increasing the chances that they will walk away at any point leading up to trial, but you also increasing your chances of winning if the matter does go to trial.

Good Luck

Lawyers are constantly performing a balancing act, always deciding whether it is potentially more profitable to act in one way rather than another. This is not because lawyers are greedy – although many of them are, of course – but is in fact part of their ethical responsibility to act in ways which promote their clients’ interests. These interests are virtually always financial, and thus as you continue to defend yourself with skill, you raise the issue more and more insistently that the lawyer would be better off pursuing other claims. When your skill has actually pushed the lawyer to take the step of cutting you loose, you are “lucky,” and the debt collector drops its suit. If you have a pending counterclaim at this point, you can force it to do so “with prejudice.”

Wishful Thinking – Dreaded Enemy of People in Debt

There is a tendency among being drowning in debt to wish for a magic bullet or some other sudden, easy remedy. Or otherwise to take no action and hope the debt goes away. This path could lead to financial destruction.I am now not paying credit cards as I am swamped with debt, and the minimum payments are killing me. I have been told the banks only gave me debt, not money, and are guilty of conversion by selling my personal information. I have been told the banks are committing fraud, coercion, unjust enrichment and violation of FCRA section 619. Do I owe anybody any money?

Magical Thinking Does Not Solve Debt

I get variations on this type of question fairly frequently. Someone has told the person contacting me that either there is no debt because the person only applied for a credit card but did not sign a contract, or, more esoterically, that there is no longer any money in the U.S. and thus there can be no debt. That argument has its academic basis in the fact that the United States left the gold standard and has allowed the Federal Reserve to issue “currency” in the form of “Federal Reserve Notes.” But it has its true basis in wishful or magical thinking. It would be so nice to wave a wand or speak some powerful words that would make the debt collectors go away.

Fighting is the only way to make them go away.

Contractual Agreement?

To handle the more basic objection first, it is true that a contract is an “agreement” between two parties, but it is not true that the agreement must be signed by both parties. An agreement can be inferred where the parties act as if there is an agreement. For example, if I offer to pay you $100 to walk on your hands across the street, and you do so, then your action has consummated a “unilateral” contract, and I am legally bound to pay you the $100. Likewise, if you apply for a credit card and I accept your application and issue a card to you, and then you use it to make a purchase, your use of the card establishes an obligation to pay back the debt under the contractual terms stated in the application. As far as I know, no modern court has ever held otherwise. Of course, a debt collector might have a difficult time finding the application and proving the terms of the debt-in my opinion a more fruitful line of attack.

Debt collectors often do things which are legally wrong, but these are either defenses or counterclaims you can make against them. Or you can bring suit yourself. The key to remember, though, is that the law is almost never self-enforcing. The mere existence of defenses or claims does not do anything for you-you must assert and prove them in order for them to do you any good.

Gold Is Money

What about the constitutional directive that all money be gold and silver, does this get you off the hook for credit card debt? The argument goes that only “debt” (which Federal Reserve notes signify) has been transferred, rather than money. But the gold and silver provision of the constitution was “written out” of the law by the Supreme Court long ago. That decision was not, in my opinion, a great moment for the Court or the American people, but it has never been revisited. It probably won’t be revisited, either, at least until the U.S. currency is nearing or at the point of collapse. Then Federal Reserve currency won’t seem so central to American commercial life, and a far-seeing Court might, under radical conditions, take a new look at the question.

But even then I suspect that the argument that no money was paid will not fly, and that is because Federal Reserve notes do have at least some “value.” If I offer to pay you 100 clam shells in exchange for something from you, a contract is formed. If I breach it, I would owe you the “value” of the 100 clam shells, normally, or under certain circumstances the shells themselves. Although Federal Reserve notes certainly do not have the value they once had in the market, this has only been to the advantage of people who owe money rather than others. Ironically, about the time anybody would revisit the question of whether federal reserve notes can be used as “money,” they will be approaching worthlessness. Then the biggest disaster a debtor could face would be to have to pay back in something of more enduring value.

Federal Reserve Notes Have Value

A Federal Reserve note is basically an “IOU” by the Federal Reserve, a private institution. The Fed gives currency (these days mostly electronically) to the banks in return for some sort of assets or a promise to pay it back, and that is the way money is created. The banks then lend out the money and it “circulates.” In contract law, debt is normally freely transferable. So not only can federal reserve notes be used as currency, but other forms of “commercial paper” or even private IOUs can also be used to buy things. They aren’t money and won’t necessarily be honored at “face value,” but they can certainly be used to pay debts. This would establish a contract even if it left the value of the obligation uncertain.

No Silver Bullets to Debt

And that leads to the central problem with the various “silver bullet” arguments which try to kill a person’s debt based on technicalities. The judicial system is far more practical than many suppose, and it would not ultimately (after the appeals process-individual judges sometimes do almost anything) make a ruling that would destroy the American commercial system. And this is appropriate in a democracy, since the courts should interpret laws rather than make them. A commercial system which has grown up over many, many years by responding to practical needs and which every legislative action has either taken for granted or actually bolstered, should not be stricken down in an instant by a court opinion.

What to Do

Fortunately, a person being harassed by debt collectors need not hope for such a silver bullet. Most debt collectors have a lot of trouble trying to prove the debts they are trying to collect for much more practical reasons. Often the records no longer exist or cannot be legally introduced as evidence. If you fight back, you can either prove they cannot make their case, or take the fun and profit out of it for them so they drop the case and leave you alone. Tackling just the monster attacking you is probably going to be enough for most people. Watch out for people trying to sell you more.