If you are sued by an original creditor such as a merchant or service provider in small claims court don’t just ignore it. It costs nothing to file an answer. Add a counterclaim against the plaintiff to your answer if you are unhappy with their product, service, price or otherwise contest the merits of the claim. If you don’t respond you will be defaulted for the full amount. These judgments don’t show up on credit reports anymore but you can still be forced to pay. Most small claims courts have mandatory arbitration so you are likely to get some kind of concession just by showing up. It is always wise to reach out to the claimant and try to settle early. Realistically most small claims have gone beyond the possibility of amicable settlement by the time they are filed.
Damages to Credit
Creditors can be sued if they report your credit history inaccurately. Credit reporting agencies can be sued if they refuse to correct information after being provided proof of inaccuracy.. The damages awarded in these cases is limited only by the wronged parties ability to prove his losses by proof deemed acceptable to the courts. Proving damages in these types of cases is difficult and costly. Testimony of expert witnesses is frequently required.
Credit reporting agencies can also be sued under the FCRA for up to $1000.00 if they reinsert a deleted item from your credit report without notifying yo in writing within 5 business days. If they fail to respond to your written dispute within 30 days they can be sued for up to $1000.00 but a 15 day extension may be granted if they receive information from the creditor within the first 30 days.
State Credit Repair Lawsuits Resources
Each State has its own laws concerning consumer rights and protections. It would be wise to contact your State attorney general to see what kind of information they have available in the area of your State’s own consumer rights. Don’t rely on hearsay or old information. Consumer laws are frequently amended by local legislatures. Court decisions can change laws and create or extinguish legal rights and enforcement policies at any time. Most attorneys who concentrate in consumer law are glad to talk to potential clients for free if they call with questions. Younger attorneys may be hungry for cases in this area to gain experience and exposure.
Federal Credit Laws
Now let’s consider enforcement of the network of federal laws regarding credit repair and debt collectors as well as credit reporting agencies. These federal laws do not apply to disputes between original creditors and debtors. Lawyers who represent themselves are said by other lawyers “to have a fool for a client.” Even trained lawyers find it unwise to represent themselves alone in court as what is called a “pro se” plaintiff. How much more must this be true for those without legal education, training and experience?
You will frequently see references to offenders who violate federal laws regulating credit repair and/or debt collecting being subject to $1000.00 fines plus attorney fees. If you have solid evidence of some substantial violation of the law by a debt collector you should check your local bar association or online for a lawyer who will handle such consumer cases. Many lawyers simply do not find it worthwhile to pursue an isolated small dollar legal complaint. If a lawyer concentrates in consumer law he will have the advantage of his prior experience to rely on. He will also have what is called “economies of scale” in his favor in that he may be able to schedule several cases on the same court docket for a single morning. Less well known is the fact that credit repair lawsuits settlements of $4500.00-$5000.00 are common but the amount over the $1000.00 limit is included as a lawyer’s fee. The consumer nets only the $1000.00 limit. Check the website of the National Association of Consumer Advocates (NACA.net). Member lawyers specialize in consumer issues. Many are experts in the field of fair credit reporting.
Being Your Own Lawyer
Do not believe those who advocate pursuing these matters on your own. It is a rare case where the plaintiff would not have been better off dollar wise to have spent the time he will spend representing himself on the case at working overtime or at a side job if he has one. Legal victories seldom bring the kind of satisfaction that people think they do. Very few people have the kind of background and temperament to benefit from being their own lawyer.. You will spend many sleepless nights. You will never feel as alone as you do on the morning of court. True many courts lean over backwards for pro se plaintiffs who need help. Sometimes you may “get the business” from small minded court personnel. Rude treatment of pro se plaintiffs by opposing lawyers in credit repair lawsuits is not uncommon. You may win a settlement if you are deemed a nuisance to be gotten rid of. If you really want to try your own case go ahead.
Now let’s consider enforcement of the network of federal laws regarding credit repair and debt collectors as well as credit reporting agencies. These federal laws do not apply to disputes between original creditors and debtors. Lawyers who represent themselves are said by other lawyers “to have a fool for a client.” Even trained lawyers find it unwise to represent themselves alone in court as what is called a “pro se” plaintiff. How much more must this be true for those without legal education, training and experience?
Choosing Legal help
You will frequently see references to offenders who violate federal laws regulating credit repair and/or debt collecting being subject to $1000.00 fines plus attorney fees. If you have solid evidence of some substantial violation of the law by a debt collector you should check your local bar association or online for a lawyer who will handle such consumer cases. Many lawyers simply do not find it worthwhile to pursue an isolated small dollar legal complaint. If a lawyer concentrates in consumer law he will have the advantage of his prior experience to rely on. He will also have what is called “economies of scale” in his favor in that he may be able to schedule several cases on the same court docket for a single morning. Less well known is the fact that settlements of $4500.00-$5000.00 are common but the amount over the $1000.00 limit is included as a lawyer’s fee. The consumer nets only the $1000.00 limit. Check the website of the National Association of Consumer Advocates (NACA.net). Member lawyers specialize in consumer issues. Many are experts in the field of fair credit reporting.
Do not believe those who advocate pursuing these matters on your own. It is a rare case where the plaintiff would not have been better off dollar wise to have spent the time he will spend representing himself on the case at working overtime on his regular job or at a side job if he has one. Legal victories seldom bring the kind of satisfaction that people think they do. Very few people have the kind of background and temperament to benefit from being their own lawyer.. You will spend many sleepless nights. You will never feel as alone as you do on the morning of court. True many courts lean over backwards for “pro se” plaintiffs who need help. Sometimes you may “get the business” from small minded court personnel. Rude treatment of pro se plaintiffs by opposing lawyers is not uncommon. You may win a settlement if you are deemed a nuisance to be gotten rid of. If you really want to try your own case go ahead.
Important Federal Credit Laws
- Credit Card Accountability Responsibility and Disclosure Act (CARD Act). Federal law passed in 2010 to implement protections against abusive practices towards consumers by credit card companies.
- Credit Repair Organizations Act (CROA). Federal law designed to curb abusive practices by companies claiming to fix credit problems. Places limits on practices such as up front fees and outrageous guarantees of success at raising client’s credit scores.
- Equal Credit Opportunity Act (ECOA). Federal law that prohibits lenders from denying mortgages on the basis of the buyer’s race, color, religion, national origin, age, sex or marital status, or receipt of income from public assistance programs.
- Fair Credit Billing Act (FCBA). Governs creditor’s obligations regarding billing procedures.
- Fair Credit Reporting Act (FCRA). Federal consumer protection law that regulates the disclosure of information on consumer credit reports by credit reporting agencies while establishing procedures for correcting mistakes on credit reports. Requires collectors to investigate claims of inaccurate information regarding the amount claimed. Unverifiable negative entries must be removed. Amount claimed must be actually owed and be reported fairly and accurately. “Re-aging” of accounts by reporting the date of last activity instead of the date of first delinquency is forbidden.
- Fair and Accurate Credit Transactions Act (FACTA). Amends and adds to Fair Credit Reporting Act in some areas including additional protections regarding identity theft and accuracy of credit reports. Provides consumer right to a free credit report every year.
- Fair Debt Collection Practices Act (FDCPA). Federal law prohibiting unfair and abusive debt collection practices. The judge must judge the debt collector’s behavior by the standard of “the least sophisticated debtor”. Court looks at the “totality of the circumstances” regarding untrue, undignified or disrespectful language, repetitive calls and revelations to third parties. Forbids threatening legal actions such as garnishing wages, putting a lien on your house and misrepresenting the amount owed. Collectors cannot call after 9 PM or before 8 AM. They cannot call a third party such as friends relatives or neighbors for information or threaten arrest. Cease and desist letter from consumer ends calls. No calls at work if forbidden to do so by consumer. Pursuing of collection of unvalidated debts and failure to report a disputed debt to the credit bureaus are forbidden.
