Let me first state that in 16 years of public appearances, presentations at CLE seminars for litigators and bankruptcy lawyers, thousands of articles published in 26 countries, and thousands of cases litigated in court, there has been only icy silence from Wall Street as to my criticism of the financial system, the political system, and the judicial system as to how they treated the 2008 crash.
No one has said I am wrong despite appearances in which the banking industry was represented on the same stage. But plenty of judges have ruled for the homeowner because I was right in my basic premise: debts are assets and if the claimant does not own it they do not own a claim — nor does the court have any authority or jurisdiction to hear the claim.
I recently received a “disagreement” from a blog reader reflecting a false sense of futility based upon ignorance of the basic premises of our society. Here is what I replied:
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Your argument is philosophical. It is not a legal argument, nor an argument that would be sustained by the Financial Accounting Standards Board, the AICPA or the SEC.
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You can disagree with the philosophy of our laws, rules, regulations, customs, and practices, but you cannot successfully disagree with their existence. I do not speak of what should be the law. I speak of what the law is.
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All debts are assets. In any case, where you prove that they are not assets, then you have disproved the debt. The debt is either owned by the person making a claim against you or to someone else. If the person making a claim has no record of the debt as an asset, then they can plead a case, but they can’t prove it. There is a huge difference between saying something and proving something.
- Legally, debts arise when a party receives consideration (unless it is a gift and you can prove it was a gift). It doesn’t matter whether or not anything is in writing. The debt is a legal concept that exists as soon as the consideration is received.
- All debts are enforceable unless statutes are passed and signed into law that restricts the enforcement of debts. The general rule, though, is that debts are enforceable. Certain types of debts must be in writing to be enforceable, but that does not restrict the injured party from suing under unjust enrichment.
- Under Federal and State constitutions, due process restricts the types of cases that can be heard by a court.
- Only matters in a controversy involving a present injury or imminent injury can be heard.
- The general rule is that a court will only hear cases where the injury is alleged and only grant relief to cover the injury.
- But pleading practices allow certain allegations to be implied. So, in our example, if you plead that you are the “holder” of a note, then it is presumed that you are injured by nonpayment.
- Legally and procedurally, all business entities (corporations etc.) must appear in court through counsel. When the attorney files a pleading in court, it is on behalf of a client whom he or she represents.
- The basic rule is that all people who are sued have a right to challenge the claim against them and to perform investigations and discovery to corroborate or rebut the truth of the matters asserted against them.
- So if the injury is alleged or implied, the respondent/defendant may ask for corroboration of the existence of such an injury beyond the mere announcement, implication, or allegation.
- That brings us to double-entry bookkeeping, which has been used since its first use in the 1300s in Venice, Italy. https://en.wikipedia.org/wiki/Double-entry_bookkeeping
- The basic premise is that all businesses either maintain a general ledger of all transactions or one can be constructed from receipts and other information.
- If a person or business claims to own something, the thing must exist, and the thing must have been acquired by the claimant.
- Next, transactions are recorded through compliance with the rules of double-entry bookkeeping. This premise is derived from the fact that every transaction has two aspects — something coming in and something going out.
- The basic rule is that if I acquire a loan, my assets will increase to the extent of the amount I paid for it.
- The amount I paid for it would be a reduction in assets, namely “cash.”
- Hence, the cash payment and the asset value increase are reflected either in the general ledger, if there is one, or in the transaction documents and receipts, or both.
- All actual or potential records of an asset, liability, income, or expense are reflected on the ledger. And all ledgers must have backup receipts and other documents, or they won’t survive an audit.
- In the case of a loan, the new payee is me since I paid for it, but the borrower need not pay me until he receives direct notice from the original payee to start paying me as the new owner.
- That is what prevents double liability for the same debt. Debts do not increase because there are new owners. They only increase if the borrower has received more money or more money has been paid for his/her benefit pursuant to a loan agreement.
*So for practitioners, this means you are searching for (a) entries on the ledger and (b) the backup receipts and documentation. You also want the contact information of a live human being with personal knowledge who knows whether the company named as the claimant is, in fact, making a claim — or, as I have repeatedly said and revealed — that a claim is being asserted using the name of the claimant without any expectation that the remedy sought will inure to the benefit of the named claimant.
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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
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