‘These are strategies to defraud lenders, and waste court resources, nothing less,’ Justice Kenneth Nielsen stated.
An Alberta judge is warning against money-for-nothing debt elimination schemes, stating they have become a serious waste of the court’s time and a liability both financially and legally to those who pursue them.
Such schemes are typically marketed online by individuals who often claim to be “agents” or “human rights defenders” who have learned of secret legal processes that will clear debts.
Nielsen wrote that in reality, those schemes rely on well-known and long-debunked pseudolaw arguments that do little for any of the parties involved, save for lining the pockets of those pitching such concepts.
“These schemes and their promoters harm legitimate lenders by inflicting litigation expense and delaying collection. Courts are injured because their resources are wasted by attempts to deploy long-debunked strategies that inevitably fail,” he stated.
He lists purveyors of such strategies as including “minister” Edward Belanger who pitches religious immunity from paying debts, arguing that “God’s law” is supreme over any court.
They also include Romana Didulo, the self-described queen of the kingdom of Canada, who claims that her followers can rid themselves of debt via promissory notes to pay at a later time of their choosing.
“Unfortunately, this court now encounters individuals who rely on these meaningless declarations by Ms. Didulo as a purported basis to avoid foreclosures and other debt enforcement steps,” Nielsen stated, adding, “that does not work.”
“These individuals inevitably face worst-case outcomes, usually losing their homes.”
Those who invoke such strategies, Nielsen notes, often rely on three main arguments.
First, they allege that the borrower rejects they have any debts unless the lender provides a “wet ink” signed loan document as proof.
“If this purported rule of contract law were, in fact, true, then no contract formed by electronic means would ever be enforceable,” Neilsen stated.
“Anyone who claims they do not need to pay back a debt on this basis is not acting honestly.”
Second, that an affidavit from a chartered accountant must be produced verifying the debt was not sold, apparently to head off the possibility of paying the wrong creditor.
Nielsen wrote such a scenario is unlikely and creditors collecting debt that is not owed to them is already illegal.
“There is a legal remedy for the strange hypothetical of a lender attempting to assert a debt it no longer owns.”
They finally often assert that a private lender will buy out the debt, though Nielsen wrote these individuals are often fictitious and would lack the power to unilaterally change a contract in any case.
His ruling imposes a security deposit of as much as $25,000 on three individuals using such strategies to cut down their debt, arguing it forces them to “put their money where their mouth is” should they wish to continue with those already-rejected arguments.