In a long article on Bloomberg News, but well worth the read:
How unscrupulous lenders have used an obscure legal document to wreck havoc against small businesses nationwide.
The lenders’ weapon of choice is an arcane legal document called a confession of judgment. Before borrowers get a loan, they have to sign a statement giving up their right to defend themselves if the lender takes them to court. It’s like an arbitration agreement, except the borrower always loses. Armed with a confession, a lender can, without proof, accuse borrowers of not paying and legally seize their assets before they know what’s happened. Not surprisingly, some lenders have abused this power. In dozens of interviews and court pleadings, borrowers describe lenders who’ve forged documents, lied about how much they were owed, or fabricated defaults out of thin air.
By seizing their bank deposits, Yellowstone had managed to collect its money ahead of schedule(60k on a 38k loan) and tack on $9,990 in extra legal fees, payable to a law firm in which it owns a stake. In about three months, the company and its affiliates almost doubled their money. At that rate of return, one dollar could be turned into 10 in less than a year.
Everyone else involved in the collection process got a slice, too. SunTrust got a $100 processing fee. Barbarovich’s office(NYC Marshal) got approximately $2,700, with about $120 of that passed along to the city. The Orange County Clerk’s office got $41 for its rubber stamps. The New York state court system got $184.
Cash-advance companies have secured more than 25,000 judgments in New York since 2012 worth an estimated $1.5 billion.
It sure explains why my small business gets a ton of loan/cash advance offers.
It should be noted that these letters have been prohibited in some states for over 50 years, and banned nationwide for consumers since 1984. (but even when banned by a state, they pursue it in a state where they are legal.)
Related Stories
In a followup to an article discussed previously here on SoylentNews:
Bloomberg has a three-part series on the use of an obscure legal document that unscrupulous lenders are using against small businesses.
- In Part 1 - I Hereby Confess Judgement, (the part discussed earlier on SoylentNews,) they go into detail on what the predatory lenders are doing to small businesses using a document known as a "Confession of Judgement" to extract court wins from small businesses without a trial.
- In Part 2 - The $1.7 Million Man, they go into how a debt collector became NYC's top earning official.
- In Part 3 - Rubber Stamp Justice, the article describes how the courts are involved, and what some of them are doing to prevent this abuse.
After the story was released on Bloomberg, the New York State Attorney General's office opened a formal investigation last month.
(Score: 0) by Anonymous Coward on Wednesday November 21 2018, @02:22PM
...in the Federation?
(Score: 3, Troll) by VLM on Wednesday November 21 2018, @02:25PM (5 children)
Isn't it antisemitic to complain about perfectly legal bankers?
(Score: 2) by DannyB on Wednesday November 21 2018, @02:29PM
That's banksters not bankers / wankers, etc.
The lower I set my standards the more accomplishments I have.
(Score: 3, Insightful) by crafoo on Wednesday November 21 2018, @02:57PM
What ever you do, don't look into who owns the vast majority of "check cashing" services. Somewhat tangential to this particular scam. I must admit, owning part of the law firm and exploiting a particular legal loophole to smash small businesses with fees and false claims is even more brazen that I expect.
But you know, financial parasitic behavior on the engine of our economy .. I mean it essentially written into the doctrine. If you reach out and a snake bites you, well, it was just being a snake.
(Score: 4, Insightful) by DeathMonkey on Wednesday November 21 2018, @06:53PM (2 children)
Isn't it antisemitic to complain about perfectly legal bankers?
No, but implying the problem is cause by the Jews is.
(Score: -1, Troll) by Anonymous Coward on Wednesday November 21 2018, @10:46PM (1 child)
When you know perfectly well that today's jews aren't even jews. They are fakers who adopted judaism but jews are a race and not a religion and one cannot change their race. In fact, the murderous jews and bankers you hear so often about (or not) are worshipers of Satan. Accept it or don't but the facts remain. Israelis and their exported bankers are khazars who come from khazaria, not israel. Historical facts cannot be changed.
(Score: 3, Touché) by DeathMonkey on Thursday November 22 2018, @02:47AM
When you know perfectly well that today's jews aren't even jews. They are fakers who adopted judaism but jews are a race and not a religion and one cannot change their race.
Not according to the dictionary. [merriam-webster.com]
(Score: 3, Insightful) by Anonymous Coward on Wednesday November 21 2018, @02:27PM (14 children)
Don't worry ! The free market will fix it ! The free market fixes everything !
Oh, wait...
(Score: 2) by DannyB on Wednesday November 21 2018, @02:30PM (10 children)
The government will fix it ! The government fixes everything !
(but I think this is already "fixed", using government rules and laws. Won't fix. Working as intended.)
The lower I set my standards the more accomplishments I have.
(Score: 3, Informative) by PiMuNu on Wednesday November 21 2018, @02:41PM (5 children)
Yes, let's privatise the police, that will help.
(Score: 3, Insightful) by DannyB on Wednesday November 21 2018, @02:53PM
Only if we privatize the prisons and education system as well. That way everything works together in synergy.
Education system ensures that there are enough uneducated dolts who will fill the private prisons, but also enough hothead bullies to staff the police departments, as well as the right amount of barely employable morons to pay for the entire system to just barely work while the rich continue to live lives oblivious to the problems of the machine that supports them.
Also privatize the fire department and pay for it with private fire insurance. (Sorry ma'am, according to your private fire insurance policy, we cannot start fighting the fire until at least 1/6 of your home has been destroyed.)
The lower I set my standards the more accomplishments I have.
(Score: 3, Funny) by suburbanitemediocrity on Wednesday November 21 2018, @04:44PM (3 children)
Why don't the people just read the contracts before they sign the papers. Or if they can't read, hire a lawyer to explain it to them?
(Score: 3, Touché) by PiMuNu on Wednesday November 21 2018, @04:57PM (2 children)
> just read the contracts
> FTFSummary "describe lenders who’ve forged documents, lied about how much they were owed, or fabricated defaults out of thin air"
> hire a lawyer to explain it to them?
Mod +1 Funny.
(Score: 1) by anubi on Thursday November 22 2018, @04:32AM (1 child)
If people read the contract, very few would do business.
The contract is by *far* the most common reason I will walk away from a business offer. Lots of dingbats and fine print scream to me that the business that presented this to me is preparing to financially rape me, and I am best advised to terminate the business relationship immediately.
All that fine print hits me like the sound of a rattlesnake.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2) by Thexalon on Thursday November 22 2018, @03:04PM
Any organization who encourages me not to read a contract they want me to sign is pretty well guaranteeing I won't sign it.
The current state of boilerplate legalese, though, is pretty telling: Most contracts you'll see someone place in front of you state in no uncertain terms that you are not allowed to sue them under any circumstances, ever. And yes, that's legal in the US, per Supreme Court cases decide in the last couple of decades. Which means, of course, that the organization who wrote the contract can break the rules any time they want, and you can do nothing about it.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 5, Insightful) by loonycyborg on Wednesday November 21 2018, @03:44PM
Government is simply not doing it job by accepting contracts that rescind a party's right to defend itself in court. The only thing a just court can do about such a clause is to rule that it's unenforceable.
(Score: 5, Insightful) by ikanreed on Wednesday November 21 2018, @03:49PM (2 children)
Government that respects contracts as always fair is bad. Period.
You can't have real freedom and market freedom at the same time.
(Score: 2) by driverless on Thursday November 22 2018, @10:37AM (1 child)
Oh I don't know, you could use the contracts against the abusers. For example if the borrowers being screwed took out contracts on the people running these scams, the problem would solve itself over time. And being run from New York, it probably wouldn't be too hard to do.
(Score: 2) by ikanreed on Saturday November 24 2018, @05:25AM
You know, violence for petty revenge is never a problem, people are always sensible about who use violence against in order to specifically adjust for the giant holes you could drive a truck through in your ideology.
You must be living the an-cap dream of owning your own pool filled with the results of constantly jacking yourself off.
(Score: 2) by VLM on Wednesday November 21 2018, @02:47PM (2 children)
Thats kinda the problem, in that loan sharking exists to launder money thru small cash businesses. Tends to be an ethnic gang thing.
"So we're your people and we know where you live and we're gonna leave this $25K of heroin selling cash in your office which you're going to process as cash sales for massage or nail treatments or spa or wtf, and you're going to take out a predatory loan for $10K with our partners and they're gonna F you over to the tune of $24900 or so"
Where it breaks down and hits the news is greedy people gotta greed and theres always some dumbass dealer who gets busted or civil forfeiture-d and his partner is like "F it, lets collect our $25K anyway" even though the dealer only gave the flower shop or nail shop or whatever $15K or so and the small business owner starts whining. Or only one partner in the small business owes $50K in gambling debt and makes a deal, then the other business partner starts complaining.
(Score: 0) by Anonymous Coward on Wednesday November 21 2018, @10:15PM (1 child)
Sounds like the voice of personal experience? Now we now why VLM is a Nazi.
(Score: 0) by Anonymous Coward on Wednesday November 21 2018, @10:51PM
Stop trolling, JIDF warrior.
(Score: 4, Insightful) by Anonymous Coward on Wednesday November 21 2018, @02:44PM (24 children)
Don't go into debt. Its much better to live within your means and grow your business slowly or via investors. It is not natural to live your life in debt to banks.
(Score: 4, Insightful) by DannyB on Wednesday November 21 2018, @02:58PM
Yes! That!
I use high limit "rewards" credit cards to get huge benefits by doing all of my spending through them -- but I don't borrow a single penny on those cards -- ever. If I want to buy something nice, I save up for it.
The same kind of restraint as not drinking alcohol or smoking. Or always having a bottle of hydrocodone in my pocket, but only taking it on occasion when needed.
The same restraint as not punching certain people in the face.The lower I set my standards the more accomplishments I have.
(Score: 2) by DannyB on Wednesday November 21 2018, @03:01PM (5 children)
Despite my post about personal debt, I don't seem to have a problem with the idea that some businesses may take on reasonable amounts of commercial debt. But do so through a trustworthy commercial lender. Maybe have your business lawyer review things.
The lower I set my standards the more accomplishments I have.
(Score: 2) by RS3 on Wednesday November 21 2018, @04:09PM (4 children)
> Maybe have your business lawyer review things.
Generally I agree, but for a very small business, lawyer fees can be as much as the loan they wanted. And there's no guarantee the lawyer will be right- half of them lose in court every day. Well, roughly speaking; just making a point.
The problem, I believe, is in the fundamental structure of our "system". Clueless legislators in Ivory Towers, who are much too heavily influenced by lobby groups, dream up laws which are now far too complex for anyone to understand or untangle. The courts have to uphold them, and the lawmakers keep making new laws.
As I've commented before (and got modded funny), I believe the legislative process needs to become "agile"- learning and correcting as it goes. And when the laws are ridiculous, such as the concept of signing away rights, the legislature needs to force a correction.
We need an absolute law- a constitutional amendment- clearly stating that nobody can ever sign away the right to a court hearing.
(Score: 2) by suburbanitemediocrity on Wednesday November 21 2018, @04:52PM (1 child)
I've started a few businesses and have never paid more than $300 to lawyers. Hiring a lawyer to fill out your business paperwork is 2-3x this IIRC. Having a lawyer to look over a boilerplate contract is not going to cost that much.
(Score: 2) by RS3 on Wednesday November 21 2018, @05:29PM
That's good news. Maybe you live in a good area lawyer-wise. Around me, the rip-off stories abound. I still say that having a lawyer look over the boilerplate is not a guarantee that you'll be okay come court.
All that said, when I was in college one apartment's lease was very long and all unreadable legalese. One of the dozens of clauses stated that by signing this lease I was giving up my right to a writ of replevin. For those who don't know, it's a court order / process for recovering stolen or misappropriated items. The university had a campus student lawyer, who explained to me that people put all kinds of things in contracts which are not necessarily enforceable.
I wish the courts would not honor the "confession of judgment".
(Score: 2) by DannyB on Wednesday November 21 2018, @06:35PM (1 child)
Next best option then would be a commercial loan from a bank you've done business with, even personal business with, for a long time. If you have any real bank with such a relationship.
The lower I set my standards the more accomplishments I have.
(Score: 0) by Anonymous Coward on Thursday November 22 2018, @08:58AM
Yea! going into debt is awesome if you do it just right!
(Score: 5, Insightful) by JoeMerchant on Wednesday November 21 2018, @03:01PM (14 children)
From some positions, debt makes sense. The "American Dream" of home ownership is a fairly good use of debt. Buy a house that costs 2-3x your annual income, then spend the next 15-20 years paying it off with 20% of your income.
High interest, high fee credit card debt to fill that home with junk that you don't even use? There should be an hour of education every school day from age 7 to 17 explaining the negative impacts of impulse spending and hoarding - most of the teachers will be hypocrites, but that's o.k., even if they're too old to change their ways they can still relate the short term elation and long term misery that consumerism has brought to their lives.
🌻🌻 [google.com]
(Score: 1, Insightful) by Anonymous Coward on Wednesday November 21 2018, @04:12PM (11 children)
I disagree. That's the bank buying a home and letting you live in it for a bit cheaper than rent.
(Score: 2) by PiMuNu on Wednesday November 21 2018, @05:03PM (1 child)
> bit cheaper than rent.
In the UK, buy-to-let means that the rental market always follows the mortgage market. If mortgages get cheaper than rent, people invest in housing and mortgages end up costing the same as rent. Risk is perceived to be very small, and there is return on the housing investment (house prices always go up in UK (haha) ).
(Score: 0) by Anonymous Coward on Thursday November 22 2018, @02:13AM
Risk is typically underestimated by an order of magnitude or two. On the other hand, this schema drives the prices up which makes it unrealistic for a risk adverse person to buy ever.
Personally, I bought my house 12 years ago using honest to god 20% down fixed interest as a good citizen is supposed to. Did not miss a single payment since then. I sill have negative value and can not move because of this which depresses my income tremendously.
(Score: 1) by DECbot on Wednesday November 21 2018, @06:33PM (5 children)
That's still a better deal. If you make all your payments, the bank removes the lien against your house and it is yours completely--ignoring government property confiscation laws and such. The point is, the bank and the rest of the corporate sector has no right to your property and the state usually has no interest in the property if you keep paying your property tax. If you happen to move and sell your home before you pay off the loan, you still get to keep everything the buyer agreed to pay after you pay off your agent/broker, sales tax, and bank. That's a good deal if you home appreciates value (which has been the common trend over the past century with a few years of home value depreciation as an exception).
Renting, on the other hand, you throw all of that money to a person or corporation and after 20 years, you still have to keep paying. By the way, the rent just went up again. A fixed rate loan, the mortgage payment stays the same over 20 years, just the taxes and home insurance rates changes.
cats~$ sudo chown -R us /home/base
(Score: 2) by legont on Thursday November 22 2018, @02:22AM (3 children)
This is a myth. To be successful, one has to pick up a lucky location, which it is way easier to do on financial market where wrong choices could be sold in seconds and right choices diversified.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by RandomFactor on Thursday November 22 2018, @02:35PM (2 children)
By 'lucky location' you mean one in a good school district?
.
As long as there is a next generation, there will be good demand for homes near schools that give good results.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 2) by legont on Thursday November 22 2018, @05:57PM (1 child)
No. Once upon a time I was offered a free (like in free beer) rent in Manhattan with an option to buy. This apartment is valued at $2+ millions now. Since the total US real estate value is just slightly up, there must be places that went total bust (and we all know some of them). This kind of lucky.
As per your school hypothesis, many of my friends home-school their children. Economically speaking, they prefer to pay their wives as opposed to the government. Internet makes it easier by day. I believe the trend will continue and there will be almost no good brick and mortar schools in the future.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by RandomFactor on Thursday November 22 2018, @06:31PM
Hmm, fair enough, I'll concede that over time, school districts will matter less and less and other factors will increase in relative predictive value.
Average home retention (US, circa 2016) is ~10 years. I wouldn't expect school districts to be off the table in that period of time even though they are quite possibly weakening as a factor.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 0) by Anonymous Coward on Thursday November 22 2018, @02:25AM
Not necessarily. When you buy, you are on the hook for all of the maintenance. When you rent, a landlord takes care of it.
Your property value is tied to the local economy.
Houses are expensive and complicated to buy and sell. They make moving harder.
https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ [jlcollinsnh.com]
(Score: 1) by nitehawk214 on Wednesday November 21 2018, @06:54PM
But its still better than living in someone else's shithole. I will not live in an apartment again, fuck that shit. And, if I am going to live in a house, why not build up my own equity instead of paying rent to someone else in perpetuity?
Also, you are wrong. Maybe you don't own the house outright, but you have a lot more rights than if you were a renter on someone else's property.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 2) by RandomFactor on Thursday November 22 2018, @02:31PM (1 child)
Yet still the best investment many (most?) people ever make.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 2) by legont on Thursday November 22 2018, @06:02PM
I suspect it is a survival bias. You see people who invested and still around and don't see folks who went bust and moved away.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by Runaway1956 on Wednesday November 21 2018, @06:32PM (1 child)
Yes, definitely. Some things are so important to life, that they are justifiably financed. But, those things should be counted on the fingers of one hand. Home, transportation, family, health - I can't think of a #5. It would have to be business related. In some cases, education might qualify, but we see where we've arrived with that kind of thinking. Grads who will work the rest of their lives to pay off a debt they never should have incurred.
(Score: 3, Interesting) by JoeMerchant on Wednesday November 21 2018, @07:22PM
A loan is a bridge, to get you from your present cash-strapped state to a better state in the future where you are better off for having made a short term bad deal to get some money when you needed it with very good reason.
I can imagine a case of a 60 year old man/couple with relatively high income wanting to take a loan to finance a vacation or boat or other life experience that they might become too old to enjoy by the time they've saved enough to pay for it outright.
I can't possibly imagine a case where a high-end cell-phone or furniture suite could possibly justify the cost of financing it (vs the option of getting something of equivalent function for 1/4th the price or less...)
Of course, leveraged business is the ultimate loan consumer - especially when a corporation takes the risk of the business not working out and forfeiting their assets to the creditors. Then you get things like vacation cabin and yacht financing that blur the lines between business and personal use... it's a messy world out there, lots of grey near the 50% value.
🌻🌻 [google.com]
(Score: 4, Insightful) by crafoo on Wednesday November 21 2018, @03:04PM (1 child)
Well, according to economists and bankers, debt is there to finance large pulses in growth, capital acquisitions, and in general propel the economy forward by taking up the slack in monetary flow. Of course what it really is is predation on small businesses. It's also a straight % parasite on economic growth. The banks' goal is to own everything in name and essentially lease it to you via usury fees. When your cash flow breaks down for a year or two the take it all and move on.
(Score: 2) by legont on Thursday November 22 2018, @06:05PM
And when banks go bust, the government in one form or another assumes bank's assets. Welcome to socialism.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by looorg on Wednesday November 21 2018, @02:53PM (16 children)
This seems beyond stupid, so you sign away your rights to defend yourself in court and/or contest any claim they make and then they can just make shit up and you can't do fuck all about it? Who would be desperate or stupid enough to sign something like that, ok so quite a few people apparently. Still it seems odd that this would/should be legal.
(Score: 3, Touché) by JoeMerchant on Wednesday November 21 2018, @03:06PM (7 children)
Who reads contracts? Of that 3% who do read them, what percentage understands what they're reading?
Of course, you: small business owner in need of a loan, you are the perfect candidate to engage legal counsel to protect your interests and inform you that the only loans available to you are from unscrupulous predatory firms working the edges of the legal system to effectively steal your assets from you when they know you have no means to fight back. Oh, wait, what are you going to pay this lawyer with, and why would they give you advice/protection when they know you can't pay them? That's right, survival of the fittest, and you: owner of a small business in need of a loan are on your way to retraining. Repeat after me: "do you want fries with that?"
🌻🌻 [google.com]
(Score: 2) by suburbanitemediocrity on Wednesday November 21 2018, @04:57PM
Lawyers. They're very good and worth it in my experience.
(Score: 3, Insightful) by All Your Lawn Are Belong To Us on Wednesday November 21 2018, @07:00PM (5 children)
In a business? If you sign a contract without having read it you still deserve to be held to its terms. If you read the contract but do not understand what the contract is saying.... you still deserve to be held to its terms.
Maybe I'm above average but the examples here [lawinsider.com] all seem either very clear or would make me Google "Confess Judgement" or similar to land me at Wikipedia's page on the subject. [wikipedia.org] Or Investopedia's page - very similar.
And if you're seeking a business loan then you are seeking enough cash to have an attorney review the terms. The smart attorney might perform such work on invoice since the successful completion of the loan does indeed mean the client will have the loan proceeds to said attorney with (and indeed the lawyer could advise the client of precisely that.) Of course... the smart business owner already has used a lawyer already before you get to the "I need a loan" stage that he or she can call upon for such work. If you are borrowing on the equivalent of a payday loan.... you still deserve to be held to its terms as a penalty for using tomorrow's capital to fix today's problems.
This sig for rent.
(Score: 3, Insightful) by JoeMerchant on Wednesday November 21 2018, @07:13PM (4 children)
What you say all makes sense for you, and me.
When I picture the small business owners I know, talking net business valuations less than $300K, more than half of them just aren't that sharp. Do they deserve to lose their business as a result? One could argue that maybe they do, but I find myself coming down in favor of consumer protection type laws, even though these are businesses and not consumers.
When would a "Confess Judgement" ever be a part of a conscionable contract?
🌻🌻 [google.com]
(Score: 3, Insightful) by looorg on Wednesday November 21 2018, @07:32PM (1 child)
Very much this, is there even a single example of when this would be a good idea for both involved parties? It really does seem like an utterly stupid law. I'm wondering if it really ever made any sense, even back in colonial times.
(Score: 0) by Anonymous Coward on Thursday November 22 2018, @05:17AM
IAAL and posted the comment here [soylentnews.org]. We use confessions of judgments in business contracts, but only for high-risk businesses or for low-value liquidated damages. In the former, it allows us to beat a business to bankruptcy, as filing an action before they formally declare makes us a much higher priority, especially if in federal court. For the latter, it allows us to recover damages in cases where it would otherwise be financially unwise to do so. One thing to note in our state, there is court oversight of those, as they have to be filed in court, notice has to be given after execution, a satisfaction has to be filed, a method of defending satisfaction must be stipulated, collection costs are limited to the amount of the debt, and the penalty for abuse is treble damages, including all actual and consequential damages. Plus all the protections normally applied to contracts apply, and can be brought up by the opposing party on appeal.
(Score: 2) by All Your Lawn Are Belong To Us on Monday November 26 2018, @03:50PM (1 child)
Yeah, you make a good point there. My personal history intervenes a little. My father was in business for himself for several decades as a small businessman. He once shared with me that he attended a business seminar as a young and new business owner - this would have been somewhere right around 1960. The number one lesson there was that all failures of a business can be directly traced back to the management of the business. Even if it is strictly that economic conditions won't support the business it is management's responsibility to know that before engaging in it. When the store burned to the ground there was insurance but not enough to rebuild it into what it was. So he shrank operations. Some years later Dad left the day-to-day operations of that business to a relative when we moved several states away because we had to for health reasons, and that relative drank the business into the ground. We (as a family) spent a few years recovering from the impact of that because Dad was still the owner on paper and he acknowledged his responsibility and the business debts the relative incurred. And when he wasn't positive about what something was he paid someone to explain it to him, or he accepted the consequences if he didn't and he was wrong. There was a key juncture where we could have expanded the business in a way such that it might have survived to this day, but he and I didn't take advantage of it. The business then folded when he was disabled and could no longer work, and I had already gone on to other things. So I tend to believe strongly that a personal failure to understand something as a business owner is indeed a business owner's fault.
Sorry about such a long story to have gotten there. Do I expect every small business owner must be that way? No. But does every businessperson get a "do-over" because they didn't understand the terms of the agreement they made? No.
But your other point: I agree that a Confess Judgment should never be part of a conscionable contract without clear legislative authorization to allow them. To me that would mean mandatory phrasing in ways that any reasonable person can follow what it means and not just use a legal term of art that may be overlooked by a non-lawyer. I do think a contract can have stipulations in it which would make a judgment far, far easier to achieve - ones on which a prima facie argument should therefore be allowed. I think those stipulations can lead out with phrasing that, "Should a legal dispute be raised by either parties, both parties are stipulating at the outset of this contract the following facts to be taken as established by any court of law: " and then a recitation that A is lending B money, B realizes that they owe that debt plus all accrued interest to A, a table of exactly how the debt is laid out, and that should there be a default then B recognizes by signing the contract that in court the debt amount at the time of default is established as a matter of fact." That's a little different from a Confess Judgment in that it doesn't just give a blanket agreement that B will acknowledge fault should A raise any matter at law. But it might achieve the same aim - minimal legal expense for a lender to enforce something that should have been very well understood by the borrower before borrowing.
And yep, debt can be tempting to keep something afloat that really should sink. It's a tough call to say what should be expected of a hypothetically reasonable small business owner. But "Understand The Law" is pretty high up there as a priority to me.
This sig for rent.
(Score: 2) by JoeMerchant on Monday November 26 2018, @08:58PM
I've had contracts put in front of me with language that amounted to: "you agree that you won't sue us, you agree that we did nothing wrong, you agree that you will never tell anybody about this contract." and had the verbal explanation that it is "for the protection of both parties..." HA, zero language protecting me, tons of language protecting them, and zero incentive for me to sign it... I bring it up now any chance I get. Same company was recently reamed in the courts for what sounds (from the newspaper articles) like a bit of a raw deal (they didn't really do anything "wrong", but the lawyers made it appear as such...), but, then, after seeing what they tried to get every laid off employee to sign AFTER telling them they're fired? My sympathy is quite limited.
What I feel the world needs is more "open legal advice" - not where you lock in a private room with some guy charging you $300 per hour to feed you the same lines he fed everybody else for $300 per hour before you - but truly open, honest evaluations of things like unconscionable contracts - especially in the realm of non-compete pre-employment agreements, but all over really.
As a stretch of an anecdote, I called the Florida Bar for a low cost referral to a lawyer for a matter with our kids and the schools, the guy waited behind closed door until the credit card machine beeped for his $25 payment, then he invited me in, closed the door, and lied to me for 30 minutes including winners like: "Civil rights laws, those are pretty old, I don't think anybody uses those anymore...." I left infuriated, but within 2 hours had obtained a referral to another lawyer who took up our cause pro-bono, we got what we wanted from the school system and he basically confirmed my layman's assessment of the $25 asshole: if Florida weren't a two party consent recording state somebody should wear a wire and have this guy's license for breakfast.
🌻🌻 [google.com]
(Score: 3, Disagree) by loonycyborg on Wednesday November 21 2018, @04:09PM (7 children)
It's a clear violation of right to a fair trial [wikipedia.org]. Any court that enforces things this way is violating it. Right to fair trial is one of unalienable rights, it cannot be overridden by local laws or contracts. Perhaps it works because a company is targeted with the lawsuit and not a person?
(Score: 3, Informative) by Whoever on Wednesday November 21 2018, @05:14PM (2 children)
The US Supreme court has upheld the use of arbitration in contracts. Why would this be different?
(Score: 1, Informative) by Anonymous Coward on Wednesday November 21 2018, @09:10PM (1 child)
Because arbitration clauses don't completely destroy your right to a fair trial. You can still challenge an arbitration in court, it is just much more difficult. Without some sort of obvious defect in the arbitration, your chances are very slim. It is important to note, that bias of the arbitrator or being denied a chance to present evidence or defend yourself are grounds to overturn an arbitration.
A confession of judgment, on the other hand, completely waives your right to defend yourself. There is an example below. The problem with that is you cannot defend yourself at all. Even if they forge documents or perjure themselves, there is no remedy until after you receive notice of execution, which happens AFTER they take your stuff. For that reason, they cannot be used against individuals. Even the states that do allow them against companies and other entities are starting to reign in their use because the abuse is getting too rampant and lenders keep having problems with manufacturing evidence that don't become apparent until years later on appeal.
(Score: 0) by Anonymous Coward on Wednesday November 21 2018, @09:12PM
Darn it, used the wrong homophone. Should be "rein in" not "reign in"
(Score: 2) by Whoever on Wednesday November 21 2018, @05:16PM
You should read the text of the links that you reference:
"In the United States the right to a fair trial is sometimes illusory."
(Score: 2) by jelizondo on Wednesday November 21 2018, @05:25PM (2 children)
Form the quoted Wikipedia item:
The "criminal charge" is what invalidates your position. In civil proceedings, the judge adjudicates according to whatever was agreed on the signed contract, unless any such provision is against the law. Given that the law allows you "to confess" there is no violation of any rights.
And at any rate, from the same Wikipedia link [wikipedia.org]:
(Score: 2) by loonycyborg on Wednesday November 21 2018, @05:47PM (1 child)
The same article says "As a minimum the right to fair trial includes the following fair trial rights in civil and criminal proceedings:", that is it covers both civil and criminal cases. And it appears in the section that details US fair trial handling implying that this applies to US too. And example given in US subsection applies to a criminal case.
(Score: 2) by HiThere on Wednesday November 21 2018, @06:39PM
Since they're saying that in the US the right to a fair trial is somewhat illusory, there's no contradiction when they say that under particular circumstances you can't get a fair trial.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by donkeyhotay on Wednesday November 21 2018, @07:46PM (2 children)
Look, these kinds of practices ought to be illegal.... but maybe...
When someone contacts you and says, "Hey, we'll give you a bunch of money," when no one else out there really wants to do that, you should be very suspicious. In fact, if you're gullible enough to take a deal like that, perhaps you really shouldn't be running a business.
(Score: 1, Interesting) by Anonymous Coward on Wednesday November 21 2018, @09:45PM
Many try to "save a buck" by going with dodgy but (seemingly) cheaper lenders. Even the big org I'm with now is often penny-wise-pound-foolish.
I'm reminded of the Bernie Madoff customers who when interviewed often said something like, "Yes, it seemed dodgy, but I just couldn't resist its existing rate of return."
(Score: -1, Flamebait) by Anonymous Coward on Wednesday November 21 2018, @11:14PM
The only way that can be done is by exposing the khazar jews behind the schemes and teaching people how the parasitic race operates.
(Score: 3, Interesting) by srobert on Thursday November 22 2018, @04:17PM
Many years ago I was the victim of predatory borrowing. You know, "Hey, I just need a little more time. I promise I'll pay you back on payday. OK. I really meant to pay you last week, but something unexpected happened, again. If I could get you to float me another $200 so I can get my car fixed and get to work. I'll give it all back to you next Friday. I promise."