Civil Action 10

http://rcxloan.com/Civil_Action_Motion_10.htm

“A good name is more desirable than great riches; to be esteemed is better than silver or gold.” - Proverb 22:1

Praises & Thanks be unto The Lord My God for the wisdom, knowledge and understanding on legal matter because I received countless feedbacks from folks facing foreclosure and bankruptcy around the United States as follows:

Comments: "I have been inundated with TILA questions. So I went out hunting to see if anyone had already written about it in terms that a lay person might be able to understand. What I found is shown below. I believe it to be generally correct and the citations are good citations of law. See this site for the entire write-up. It should give most lay people an idea on how to handle this and it will be valuable to your lawyer if he/she is not totally familiar with the TILA context at the following link:" http://rcxloan.com/Civil_Action_BK_Motion_14.htm. Statement made by Attorney at Law, Neil F. Garfield, M.B.A., J.D.

A STORY TO THINK ABOUT
“Once upon a time in the Ancient Roman Empire, 27 BC, there were two men living in Jerusalem. One was named Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust, a rich man whose land was worth close to $700 billion in today‘s money; the other, Mr. Augustin, a farmer whose land was worth $300,000. One day, Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust asked Mr. Augustin to give him his land, that he may have it for a vegetable garden. But, Mr. Augustin said to Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust, “The Lord forbid me that I should give to you the inheritance of my fathers”.

When Jezebel, the wife of Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust, heard what Mr. Augustin said to him. She said, don‘t worry love, I will take care of the matter? Arise, eat bread, and let your heart be joyful; I will give you Mr. Augustin‘s land. So, Jezebel wrote letters in Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust’s name and seal them with his seal and sent letters to the elders and to the nobles who were living in Jerusalem. Now she wrote in the letters, saying, proclaim a ‘relief of stay trial’ in the absence of Mr. Augustin. Then, issued a decree that Mr. Augustin’s land is now Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust.

So the men of Jerusalem, the elders and the nobles did as Jezebel had sent word to them, just as it was written in the letters which she had sent them. Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust take possession of Mr. Augustin’s land which he had refused to give. The sad part is that Mr. Augustin was forced off his land illegally and fraudulently. Mr. Augustin left with nothing and forced to seek refuge from Jerusalem to a land called ‘Fairfax, Virginia’ to start from scratch. Whereas, Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust became more wealthy with the unwarranted possession of his and hold more than $700 billion of assets as a result.

Questions? Why was Mr. Augustin absent in the relief of stay trial? Why did the elders and the nobles just do as Jezebel asked them? Let us all fast forward in 2008, what do you think the elders and the nobles should have done differently?”

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United States Bankruptcy Court - District of Massachusetts

Pierre Richard Augustin, PRO SE )
Debtor, )
)
v. ) C.A. No. 05-46957
) Chapter 7
DANVERSBANK, ET AL., )
)

DEBTOR’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO CHASE MOTION’S TO OBJECT TO THE AMENDMENT OF DEBTOR’S SCHEDULES B & C & MOTION TO AMEND SCHEDULES (11 USC 554) TO CLASSIFY CHASE Home Finance & COMMONWEALTH DEBT AS UNSECURED CREDITOR PER TILA & REGULATION Z WITH SUPPORTING AUTHORITY


1. Emancipation Redress
In America, no one is considered to be above the law. The United States Constitution is considered the supreme law of the land both because of its content and because its authority is derived from the people. However, first and foremost, debtor meditates and relies on the divine guidance of the almighty to provide him with wisdom to dissect and to comprehend the meaning of the law of the land.

Debtor strongly believes in the transparency of the judicial system in the United States of America to uphold the law in the search of Justice. For, it is the only forum whereby an average ‘Joe’ citizen like himself who never had any infraction with the law, was left with the only viable option of bankruptcy and TILA rescission to protect his property rights as a defense to foreclosure without money, status and political connection in seeking the emancipation and the redress from the violation of the law by powerful corporations with unlimited budget represented by the most savvy lawyers on just about equal term.

Intuitively, debtor recognizes that he is facing lawyers that are well schooled with an in-depth knowledge of the law and various courtroom strategies that he lacks. Although not a lawyer or pretending to be one, debtor’s action is symmetrical to many pro se individual from the early settlers in the state of Massachusetts who could not afford expensive legal representation in the search of fairness, equal protection and justice under the law.

Unequivocally, the paramount reason for debtor’s motion to oppose Chase’s objection and motion to amend schedules rest on the principle of Emancipation and Redress which are intertwined with his property rights as "the guardian of every other right". Thus, debtor arguments are based on the following Rule of Law and others as deemed appropriate:

1) Rule 1009. Amendments of Voluntary Petitions, Lists, Schedules and Statements, (a) General right to amend. A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed. A debtor may amend schedules even after a discharge is granted so long as the case is not yet closed. (In re Michael, 163 F.3d 526, 529 (9th Cir. 1998)).

2) Rule 4003 (c) - Burden of Proof – Because a claimed exemption is presumptively valid, an objecting party must prove the exemption is not proper.

3) Rule 6009 provides Debtor the right to prosecute and defend cases without the need for bankruptcy court approval.

4) 1st Amendment, "Congress shall make no law … abridging … the right of the people … to petition the Government for a redress of grievances."

5) 5th Amendment, “No person shall be … deprived of life, liberty, or property, without due process of law”

6) 7th Amendment, “…The right of trial by jury shall be preserved.”

7) 14th Amendment, “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

8) Natural Rights, “Weakness allures the ruffian, but arms, like laws, discourage and keep the invader and plunderer in awe, and preserve order in the world as well as property. Horrid mischief would ensue were the law-abiding citizens deprived of the use of them, and the weak will become a prey to the strong.” — Thomas Paine

9) Common Law, In Beard v. U.S.(158 U.S. 550, 1895), the Court approved the common law rule that a person "may repel force by force" in self-defense, and concluded that when attacked, a person "was entitled to stand his ground and meet any attack made upon him with a deadly weapon, in such a way and with such force" as needed to prevent "great bodily injury or death."

10) Pro Se Litigants, “Courts are particularly cautious while inspecting pleading prepared by Debtors who lack counsel and are proceeding pro se. Often inartful, and rarely compose to the standards expected of practicing attorneys, pro se pleadings are viewed with considerable liberality and are held to less stringent standards than those expected of pleadings drafted by lawyers”. (Antonelli v. Shehan, 81 F. 3d 1422, 1427 (7th Cir. 1996)). Also, “parties appearing pro se are allowed greater latitude with respect to reasonableness of their legal theories (Patterson V. Aiker, 111 F.R.D. 354, 358 [N.D. GA 1986]) and according to section D of Rule 11 of the Federal Rule of Civil Procedure.

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2. Debtor’s property was exempted according to 11 U.S.C. §541(1), 11 U.S.C. §522(b)
The facts and circumstances are that Debtor had listed his house as exempt in the bankruptcy filing according to 11 U.S.C. §522(b). Debtor’s property listed as exempt has not been administered by the Trustee. Also, upon a phone conversation held with the office of the trustee on March 14, 2006, debtor was told that the Trustee has nothing to do with his property and to consult an attorney.

The issue is covered by a Rule of law 11 U.S.C. §541(1), 11 U.S.C. §522(b) and based on the Federal Rule of Bankruptcy Procedure of Rule 5009. Closing Chapter 7 Liquidation, which states, If in a chapter 7, chapter 12, or chapter 13 case the trustee has filed a final report and final account and has certified that the estate has been fully administered, and if within 30 days no objection has been filed by the United States trustee or a party in interest, there shall be a presumption that the estate has been fully administered.

Analysis – The fact helps to prove the rule since April 17, 2006, the Trustee filed a Trustee’s Report of No Distribution states as follows: “…has received no property nor paid any money on account of the estate except exempt property, and diligent inquiry having been made, trustee states that there is no nonexempt property available for distribution to creditors. Pursuant to FRB 5009, trustee certifies that the estate is fully administered and requests that the report be approved and the trustee discharged from any further duties. (Entered: 04/17/2006 at the United States Bankruptcy Court, District of Massachusetts)”. Also, the usual ground for abandonment is that the property is of no value to the estate. No actual hearing is required as long as the trustee gives proper notice, provided no party in interest makes a timely request for a hearing. Once the property is abandoned, title reverts to the debtor.

Conclusion - From the analysis, debtor comes to the Conclusion that the rules of law mentioned above are in order and the rules do apply to the facts and circumstances. Hence, Chase’s motion to object should be denied.

3. Debtor’s has standing . . .
The facts and circumstances to be addressed in this section will demonstrate standing under Article III of the U.S. Constitution based on the following three proven elements: (1) Debtor did suffer an injury of fact since (a) Allied fraudulently manipulated the facts on the mortgage application by (b) approving the mortgage on Debtor’s wife name despite her holding a temporary, seasonal and on call part-time employment that resulted in the stripping of Debtor’s equity, (2) the causal connection of Allied fraudulent mortgage resulted in the civil conspiracy of amongst Allied, New Century now Chase Home Finance via assignment, Attorney Samuel Reef and Commonwealth in benefiting from the refinance transactions while the Debtor’s debt liability surpassed his asset that contributed to Debtor’s financial dilemma.

The issue is covered based on the Rule 6009. Prosecution and Defense of Proceedings by Trustee or Debtor in Possession. With or without court approval, the trustee or debtor in possession may prosecute or may enter an appearance and defend any pending action or proceeding by or against the debtor, or commence and prosecute any action or proceeding on behalf of the estate before any tribunal (emphasis added). It is based on the principle of equitable tolling which is a doctrine that allows Debtor to sue after the statutory time limit has expired if they have been prevented from suing due to inequitable circumstances since Debtor lacks years of legal experience to fully grasp legal issues and set overall legal litigation strategies.

Analysis – The Supreme Court of the United States has stated, “In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues.” Warth v. Seldin, 422 U.S. 490, 498 (1975). As stated there, “The Judicial Power shall extend to all Cases . . . [and] to Controversies . . .” The requirement that a Debtor have standing to sue is a limit on the role of the judiciary and the law of Article III standing is built on the idea of separation of powers. (Allen v. Wright, 468 U.S. 737, 752 (1984)). Federal courts may exercise power only “in the last resort, and as a necessity.” Id. at 752. Debtor has additional capacity and standing as prescribed by rule 6009 of the Federal Rule of Bankruptcy Proceeding which states that ‘with or without court approval, debtor …may initiate any action …before any tribunal’. Also, Debtor cannot find any ‘specific negative averment’ made by Chase when raising the objection of standing as stated in that rule.

Bankruptcy rules state that (a) After notice and a hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate. The exception to that rule reflects Debtor’s situation as stated: (c) Unless the court orders otherwise, any property scheduled under section 521(1) of this title not otherwise administered at the time of the closing of a case is abandoned to the debtor and administered for purposes of section 350 of this title. On April 17, 2006, the Trustee filed a Report of No Distribution. Also, if the Trustee does not timely object to a claim of exemption, the property will be deemed exempt, even if there is no basis for the exemption. (Taylor v. Freeland & Kronz, 503 U.S. 638, 643-45 (1992)). (see docket # 94). The rule 6009 as stated above does not requires Debtor to have court approval necessarily to bring what Debtor consider as a natural right. If motion to object is granted, Chase will ultimately retaliate against Debtor’s exempted property rights since Debtor equal protection under the law would be practically nonexistent, the rule of law would be made a mockery and that justice will not be served.

Conclusion - From the analysis, Debtor comes to the Conclusion that in the absence of denying Chase’s motion to object, Debtor reaches the conclusion that his constitutional rights and rule 6009 of FRBP would be violated. Hence, Chase motion to object should be denied.

4. Chase’s time to object had run out (See Docket # 94) and/or Res Judicata
The facts and circumstances are that an untimely filed objection such as Chase’s must be dismissed even if the Trustee (or creditors for that matter) serves an objection upon the debtor, and even if the debtor initially conceals the asset (which is not the situation of debtor in this case). (In re Boyd, 43 C.B.C.2d 875, 243 B.R. 756 (N.D. Cal. 2000)).

Chase objection is untimely due to the fact that debtor had listed his property as exempt from the estate and neither the trustee nor any of the creditors had objected during the 30 days time period, thus, the property no longer belongs to the estate and the debtor may use it as his own as described below (#1,#2,#3)(Gamble v. Brown (In re Gamble) 168 F.3d 442 (11th Cir. 1999)):

#1) On July 3, 2006, debtor filed a motion to amend schedule B & C which was allowed with “No Objection” by the bankruptcy court (See Docket # 94). Debtor cited his civil suit, case#: 06-10368, as an asset in Schedule B and exempted it in Schedule C. In page 2 (See Exhibit 1) of Debtor’s civil complaint, he stated that TILA was in of the Jurisdiction of all the claims against the creditors or defendants in that civil action. At #6 of page 14 (See Exhibit 2) of civil complaint, Debtor explicitly stated that the New Century Mortgage Note which is now assigned to Chase is in violation of TILA and Regulation Z claims. In page 17 of the civil complaint, Debtor did mention rescission and statutory damages (See Exhibit 3). In retrospect, Debtor states that there was absolutely no creditors objection to the motion to amend schedules and the motion was allowed by the bankruptcy court uncontested. Also, no creditors ever filed an appeal within the 10 days limit or beyond. Hence, the order entered by Judge Rosenthal (See docket #94) on July 19, 2006 was deemed final and unappealable.

Analysis of the above facts – Chase or any other creditors should not be allowed to relitigate claims which has been the subject of a previous final order and the Federal res judicata rule should apply. (Possehl v. Ossino, 28 Mass. App. Ct. 918 (1989), (FDIC v. Shearson-American Express Inc., 996 F.2d 493 (1st Cir. 1993)). The doctrine of res judicata clearly prohibit Chase from relief to a final judgment that could have been objected by Chase in July 3, 2006. (See, In re McIntyre, 328 B.R. 356 (Bankr. D. Mass. 2005). Res Judicata are applicable based on 3 factors: 1) a final judgment on the merits of an earlier suit, 2) sufficient identicality between the causes of action in the earlier action and 3) sufficient identicality between the parties, (In re Iannochino, 242 F.3d 36 (1st Cir. 2001)). Hence, 1) Existence of Final Judgment: Final judgment was issued on July 19, 2006 by Judge Rosenthal which was not appealed timely per Bankruptcy rule 8002 that resulted as being final and unappealable, 2) Identicality of Issues: Rescission and Recoupment claims are an integral part of TILA and Regulation Z. Debtor simply reiterates the same fact cited on July 3, 2006 in its motion to amend schedules on September 21, 2006 which are identical to his civil pleading and added new claims for housing issues and other related matter, 3) Identicality of Parties: Chase, Commonwealth and Debtor are parties in Debtor’s chapter 7 bankruptcy.

#2) Debtor stated the following in the 3rd Paragraph of page 2 of that Motion to amend schedules of July 3, 2006 as follows: “the paramount reason for Debtor’s amendment of schedules is in good faith based on a discovery while conducting legal research on Sunday, July 2, 2006 at around 6 p.m. Thus, debtor’s amendment is analogous to the Equitable tolling which is a principle of tort law stating that a statute of limitations shall not bar a claim in cases where the Debtor, despite use of due diligence, could not or did not discover the injury until after the expiration of the limitations period. Likewise, despite debtor’s due diligence, Debtor was not aware of the fact that he had to amend his schedules to include a claim based on his action at the Massachusetts Federal Court for violations of debtor’s constitutional and federal rights in relation to his property”.

#3) Debtor stated on the 2nd paragraph of page 4 of the motion filed on July 3, 2006 as follows: “Debtor would like to amend Schedule B and C to include his claim at the U.S. District Court of Massachusetts that was authorized technically on April 3, 2006 after the Federal District court has screened the complaint in accordance to 28 USC § 1915 to determine if debtor’s action lacks an arguable basis either in law or in a fact, Neitzke v. Willliams, 490 U.S. 319, 325 (1989), or if the action fails to state a claim on which relief may be granted. Thus, debtor assumed that he had met the subject matter jurisdiction since his filing was not dismissed and he received the summons from the Federal District Court” that were served on the defendants.

Why is Chase’s objection must be dismissed?
The filing of Bankruptcy tolls or extends the rescission time as Debtor had filed for bankruptcy on September 26, 2005 and obtained a discharge on September 26, 2006. Also, the principle of equitable tolling does apply to TILA 3 years period of rescission since despite due diligence, Debtor could not have reasonably discovered the concealed fact of TILA & Regulation Z violations until September 17, 2006 at about 5 a.m. in reading the Truth-in-Lending book by the National Consumer Law Center whereby Debtor timely filed the schedules to reflect his better understanding of the TILA Act and Regulation Z violations.

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Effect of TILA Rescission on Security Interest
TIL rescission does not only cancel a security interest in Debtor’s property but it also cancels any liability for the Debtor to pay finance and other charges, including accrued interest, points, broker fees, closing costs and that DanversBank, Ameriquest Mortgage, New Century Mortgage, Chase & Commowealth must refund to Debtor all finance charges, fees & monthly statement already paid. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Since the TILA strict liability and 20 days strict rule for DanversBank, Ameriquest Mortgage, New Century Mortgage, Chase & Commowealth to fulfill their responsibilities, DanversBank, Ameriquest Mortgage, New Century Mortgage, Chase & Commowealth are in violation of TILA/Regulation Z and have NO STANDING to object to debtor’s rescission right. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

DanversBank, Ameriquest Mortgage, New Century Mortgage, Chase & Commowealth are obligated to return all the monies received from Debtor including all past monthly payment made by Debtor since May 2002, (Pulphus v. Sullivan, 2003 WL 1964333, at *17 (N.D. Apr. 28, 2003) (citing lender’s duty to return consumer’s money as reason for allowing rescission of refinanced loan); McIntosh v. Irwing Union Bank & Trust Co., 215 F.R.D. 26 (D. Mass. 2003) (citing borrower’s right to be reimbursed for prepayment penalty as reason for allowing rescission of paid-off loan). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The issue is covered by a Rule of law under Federal and Massachusetts Law on Predatory Lending, TILA, HOEPA and others law. It is also covered by section 522 (l) on ‘Timely Objection’; which is analogous to Chase & Commonwealth position whereas, if the chapter 7 Trustee’s (creditors) failure to object to exemption within the time provided in Rule 4003, it precludes Trustee (or creditors) from later attacking exemptions regardless of whether debtor has a colorable basis for claiming the exemptions. (Taylor v. Freeland & Kronz, 503 U.S. 638, 112 S. Ct. 1644, 118 L. Ed.2d 280, 26C.B.C.2d 487 (1992)). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Analysis - The facts above help to prove that the Debtor alleged unequivocally that DanversBank, Ameriquest Mortgage, New Century Mortgage, Chase & Commowealth have violated Federal and Massachusetts Law on Predatory Lending, TILA, HOEPA and others law. A debtor may amend schedules even after a discharge is granted so long as the case is not yet closed. (In re Michael, 163 F.3d 526, 529 (9th Cir. 1998)). Debtor could not have reasonably discovered the concealed fact of TILA violations until September 17, 2006 (See Exhibit 4) at about 5 a.m. in reading the Truth-in-Lending book by the National Consumer Law Center whereby Debtor timely filed the schedules to reflect his better understanding of the TILA Act and Regulation Z to invoque the right of rescission. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

When the debtor acted promptly to amend schedules after learning of the cause of action and there was no prejudice to creditors except the economic loss that occurs whenever property is claimed as exempt, in an analogous case, the lower courts erred in denying the debtor the right to amend. (Kaelin v. Bassett (In re Kaelin), 308 F.3d 885 (8th Cir. 2002)). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Conclusion - From the analysis, Debtor comes to the Conclusion that the rule of law does apply to the fact. Absent a showing of bad faith, the court may not deny leave to amend a schedule. Bad faith does not exist if there is no evidence to hide the asset. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Debtor simply sought bankruptcy and TILA protection to protect his property rights as part of his ongoing effort to conduct legal research. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection. Hence, Chase motion to object to amendment of schedule should be denied.

5. Debtor’s Notice of Rescission has reduced Ameriquest, Chase & Commonwealth as unsecured creditors
The facts and circumstances that Debtor filed a copy of the notice of rescission as a defense to foreclosure (see docket #100) in the bankruptcy court notifying the attorneys representing DanversBank, Ameriquest Mortgage, New Century Mortgage, Chase & Commowealth as well as having certified receipt return of proof of delivery to the Chases/Lawyers including Ameriquest Mortgage are proof of notification according to the Official Staff Commentary, 226.2(a)(22)-2 as authorizing service on attorney. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Upon serving the notice of rescission, the TILA statute and Regulation Z state that by operation of the law, the security interest automatically becomes void and the debtor is relieved of any obligation to pay any finance or other charge (15 U.S.C. § 1635(b), Reg. Z §§ 226.15(d)(1), 226.23(d)(1)). (In re Moore, 117 B.R. 135 (Bankr. E.D. Pa. 1990) (security interest eliminated upon effective rescission, reducing creditor to status of unsecured creditor). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The issue is covered by a Rule of law of the Truth-in-Lending which empower Debtor to exercise his right in writing by notifying creditors of his cancellation by mail and filed at the bankruptcy court on September 21, 2006 (see docket #100) to rescind the mortgage loan transactions per (Reg. Z §§ 226.15(a)(2), 226.23(a)(2), Official Staff Commentary § 226.23(a)(2)-1) and 15 U.S.C. § 1635(b). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

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This action is also based on Massachusetts TILA law, which has a statute of limitations of 4 years. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The filing of Bankruptcy tolls or extends the rescission time as Debtor had filed for bankruptcy on September 26, 2005 and obtained a discharge on September 26, 2006. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The principle of equitable tolling does apply to TILA 3 years period of rescission since despite due diligence, Debtor could not have reasonably discovered the concealed fact of TILA violations in-depth and explicitly until September 17, 2006 at about 5 a.m. in reading the Truth-in-Lending book by the National Consumer Law Center and timely filed the amendment of schedules on September 21, 2006. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The equitable tolling principles are to be read into every federal statute of limitations unless Congress expressly provides to the contrary in clear and ambiguous language, (See Rotella v. Wood, 528 U.S. 549, 560-61, 120 S. Ct. 1075, 145 L. Ed. 2d 1047 (2000)). Since TILA does not evidence a contrary Congressional intent, its statute of limitations must be read to be subject to equitable tolling, particularly since the act is to be construed liberally in favor of consumers. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

In an analogous case, the District Court reversed the Bankruptcy court holding that section 108(b) guards against the expiration of the underlying right by extending the period to exercise the right of rescission, as long as the right had not expired when the bankruptcy case has not been fully administered. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Analysis – The fact helps to prove the statute and regulation specify that the security interest, promissory note or lien arising by operation of law on the property becomes automatically void. (15 U.S.C. § 1635(b); Reg. Z §§ 226.15(d)(1), 226.23(d)(1)). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

As noted by the Official Staff Commentary, the creditor’s interest in the property is “automatically negated regardless of its status and whether or not it was recorded or perfected.” (Official Staff Commentary §§ 226.15(d)(1)-1, 226.23(d)(1)-1.). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The security interest is void and of no legal effect irrespective of whether the creditor makes any affirmative response to the notice. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Also, strict construction of Regulation Z would dictate that the voiding be considered absolute and not subject to judicial modification. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

This requires canceling documents creating the security interest and filing release or termination statements in the public record. (Official Staff Commentary §§ 226.15(d)(2)-3, 226.23(d)(2)-3.). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Allowing rescission of Ameriquest refinanced loan or loan paid off is also consistent with TIL’s protective attitude toward borrowers’ rescission rights generally and the general requirement that TIL be interpreted liberally for the consumer. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Conclusion - From the analysis, Debtor comes to the Conclusion that both the statute and Regulation Z make it clear that, if the Debtor has the extended right and chooses to exercise it, the security interest and obligation to pay charges are automatically voided. (Cf. Semar v. Platte Valley Fed. Sav. & Loan Ass’n, 791 F.2d 699, 704-05 (9th Cir. 1986) (courts do not have equitable discretion to alter substantive provisions of TILA, so cases on equitable modification are irrelevant). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The statute, section 1635(b) states: “When an obligor exercises his right to cancel…, any security interest given by the obligor… becomes void upon such rescission”. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Also, it is clear from the statutory language that the court’s modification authority extends only to the procedures specified by section 1625(b). The voiding of the security interest is not a procedure, in the sense of a step to be followed or an action to be taken. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

The statute makes no distinction between the right to rescind in three day or extended in three years for federal and four years under Mass. TILA, as neither cases nor statute give courts equitable discretion to alter TILA’s substantive provisions. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Since the rescission process was intended to be self-enforcing, failure to comply with the rescission obligations subjects Ameriquest Mortgage and other Chases to potential liability. Non-compliance is a violation of the act which gives rise to a claim for actual and statutory damages under 15 USC 1640. Therefore, in arguing that the strict TILA and Regulation Z voidance of security be applied, Debtor does in any way waive its right to pursue his right to seek the enforcement of TILA & Regulation Z mandated remedies in his Federal Civil Action (06-10368). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

TIL rescission does not only cancel a security interest in the property but it also cancels any liability for the Debtor to pay finance and other charges, including accrued interest, points, broker fees, closing costs and that the lender must refund to Debtor all finance charges and fees paid. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

It is prematured to determine jurisdiction since Debtor has the option of enforcing the rescission right in federal district, state or bankruptcy court (See S. Rep. No. 368, 96th Cong. 2 Sess. 28 at 32 reprinted in 1980 U.S.C.A.N. 236, 268 (“The bill also makes explicit that a consumer may institute suit under section 130 [15 U.S.C., 1640] to enforce the right of rescission and recover costs and attorney fees in a successful action”). Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

Hence, Chase motion of objection should be denied and Debtor’s motion to amend schedules to reflect both Chase and Commonwealth as an unsecured creditor as prescribed by Regulation Z should be allowed. Thus, since the security interest is automatically voided per TILA and Regulation Z upon rescission, the secured mortgage note is no longer secured and must be classified as unsecured in Debtor’s unsecured schedules of debts as well as be discharged as mandated under Debtor’s chapter 7 bankruptcy protection.

CERTIFICATE OF SERVICE

I hereby certify that a true copy of the above document was delivered in person October 13, 2006 to US Bankruptcy Court, District of Massachusetts and served by United States Postal Mail, postage upon counsel for the creditors and defendants mailed on October 13, 2006.

X ____________________________________ Pierre R. Augustin

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