“What is a dismissal with prejudice in a debt collection lawsuit?”


“What is a dismissal with prejudice in a debt collection lawsuit?”

"What is a dismissal with prejudice in a debt collection lawsuit?"A case ends in either a judgment (for defendant or plaintiff) or it is dismissed.

If it is dismissed, it is either WITH or it is WITHOUT prejudice.

We think of “prejudice” as a bad thing but if you have been sued it is a wonderful thing.

It means that the lawsuit is truly over.

You cannot be sued again for the same thing by the Plaintiff — the one who sued you.

But if the dismissal is without prejudice, then this means you normally can be sued again.

OK, well why is a lawsuit dismissed without prejudice?

Normally the Plaintiff — the debt collector or debt buyer — will drop the case without prejudice in order to sue you again.

The thought process goes like this:

  • The debt collector had no proof it owned the debt
  • You the defendant answered the lawsuit instead of defaulting by not answering the lawsuit
  • Now the case is set for trial
  • This means the debt buyer must prove its case
  • The debt buyer knows it cannot prove its case
  • The debt buyer hopes when it sues you again you will default so it will win without having to prove its case — remember it cannot prove its case so this is a problem
  • So the debt buyer will tell you it will “drop the case” by dismissing without prejudice and it hopes you will agree to this

It is very rare for any of our cases to be dismissed without prejudice.

When our clients have been sued we want to grab a hold of the debt collector and not let go until the case is over.

Being in court is favorable to our clients when we are dealing with debt buyers such as Midland Funding, Portfolio Recovery, LVNV Funding, Cavalry SPV, etc. who either cannot or will not prove they own the debt.

Why is a lawsuit dismissed with prejudice?

Two possibilities.

Either you settled with the debt collector and that was part of the deal (as it should be) or the debt buyer realized it was going to lose the case anyway and just decided to drop it.

Either one is good.

It means you can never be sued again for this debt and the debt collector can never again bother you over the debt.

If this was not part of a settlement it may allow you to sue the debt buyer if it brought a bogus lawsuit against you or committed false credit reporting or other violations of the Fair Debt Collection Practices Act (FDCPA).

If my lawsuit was dismissed with prejudice, what does this mean for me?

You won the lawsuit — now if this was part of a settlement it is still a victory but you may have had to pay money or give up your claims against the debt collector to make this happen.

The case is over so this is a major relief.

If the collection lawsuit was dismissed with prejudice but it is still on my credit report or I am still being collected on this debt, what should I do?

Normally the account must come off of your credit report if it is being reported by the company that sued you and lost.

For example, Midland Funding sued you and is credit reporting.

It agrees to a dismissal with prejudice.

Normally it must remove the credit reporting of its alleged debt (I say “alleged” as I’ve never seen Midland Funding prove it actually owns any debt it has ever sued on involving one of my clients).

Bottom line:

Dismissal with prejudice is a great thing for you and you should explore your options to get this type of dismissal.

Maybe you should pay the debt collector.

Although, I rarely think this is a good idea when sued by a debt buyer.

Or maybe you should fight the case.

You have five options:

  • Fight the case on your own
  • Settle the case on your own
  • Hire a lawyer to fight the case
  • Hire a lawyer to settle the case
  • File bankruptcy

No one option is always right.

Instead you should explore all 5 to see which are legitimate options for you in your unique circumstance.

Contact Us.

If you have any questions, or you want to discuss your 5 options, feel free to contact us.

We represent consumers all over Alabama.

You can reach us by phone at 1-205-879-2447. 

Or, you can fill out a contact form and we will get in touch with you soon.

Thanks for reading, and have a great day!

-John G. Watts


49 Comments

  1. Donna Smith says:

    First I wanted to say thank you of offering information through your site. It is great to see a site in layman’s terms these days.
    Last Saturday I received 2 summons from a process server. I am being sued by Midland Funding LLC. for 2 different GE Moneybank accounts and I had 14 days to answer. To my knowledge these may be accounts and at least 10 years old. I have no memory of the card numbers that they gave me the last 4 digits of in the paperwork. So I am not even sure they were mine to begin with. This is the 1st time I have ever heard from Midland Funding and I was shocked to get these summons. One summons is for 1500 plus court cost and the other is for 1000 plus court cost. Both summons complaints are:
    Count One- Breach of contract
    Count Two- Account Stated
    This past Thursday I went in person to the City Clerk and filed my answer. I checked that I deny that I am responsible at all. And since I checked that, it request that I explain and also list my place of employment/contact information . So this is what I wrote and attached:

    Case Numbers ………..
    I deny owing Midland Funding LLC. any money.
    I have never heard of this company or the debt they are referring to.
    I pray this Honorable Court seeks from Midland Funding LLC:
    – all proof of the debt
    – all proof that the debt is in the statue of limitations
    – all proof that they have the rights to collect this debt
    – all proof that the amount they are seeking for this debt is legitimate

    I am not employed. I am a widowed, single parent to a minor child. Our only income is Social Security Survivor Benefits in the amount of $1,107.00 monthly. I have no property, no vehicles, and no assets. I have no telephone and must be contacted by U.S. Mail or in person at my address.
    I signed/ dated it, put my address, and a copy of my income letter.
    I realize, my financial situation does not matter to the court and I probably should not have sent that information. But I wanted them to be aware that I have no way to pay them this money they are suing me for.
    Now I am waiting for my card with the court date. I cannot afford a lawyer to fight this suit. But I do intend to do my best to represent myself. I would greatly appreciate any information you can offer me. I am trying to prepare what all I need to take with me to court. And I am also trying to research information to see if I can sue them back for wasting my time with this suit, providing I win of course. Thank you in advance 🙂

    • John Watts says:

      Donna,

      Thank you for the kind words about our site — glad to know it helps!

      Sounds like you have done a great job on these.

      You should get a trial date probably in February — contact my office and let Carolyn know you posted on our website and wanted to set up a call with me. Our number is 205-879-2447. I’ll be glad to give you some general thoughts about how to improve your chances of being successful at trial.

      Hopefully you will have both cases set on the same day and can knock them out all at one time.

      Sorry for your difficult situation but sounds like you are making the best of it which is what we all need to do when we face challenges…..

      Give us a call — 205-879-2447 and ask for Carolyn and explain your situation and she will set us up a call or meeting.

      Thanks!

      John Watts

      • Donna Smith says:

        Thank you very much! I will make arrangements this next week to call your office. I did get the 2 court date cards and they are the same time and date in February. I also, received a settlement letter from an attorneys office in Montgomery that says they are representing Midland Funding on one of the case numbers. I will update as I move along with this and hope to encourage everyone else to fight these type suits instead of giving them an easy default judgement like they want..

  2. Donna Smith says:

    I went to court today for the 2 case numbers mentioned above. Both of these cases were dismissed with prejudice.

    There were 29 civil cases filed in this court by Midland Funding today. Me and 3 other people showed up to court. All our cases were dismissed with prejudice, because Midland Funding had NO proof of the debts. We all denied owing Midland Funding in our answer to the summons and requested all proof of the debt.. Sadly, the other 25 cases were default judgments. I encourage you to GO to court if you are being sued by Midland Funding and make them prove their case against you. Thank you again, John Watts for this website. It has helped me tremendously learn my rights and win my case! Happy Happy 🙂

    • John Watts says:

      That’s awesome!!! Great job Donna!

      Now you are halfway there.

      The other part is making sure Midland gets this off of your credit reports and if they showed up with no proof, you may want to look at your rights under the FDCPA (Fair Debt Collection Practices Act) and state law (Malicious Prosecution, etc).

      We have been involved in about 40 of these suits in federal court with Midland — I don’t think they will change their tactics until there is pain. They won 25 out of 29 cases.

      Call my office if you want to chat about your options…..

      205-879-2447

      And again congratulations!

      John Watts

  3. Talmadge Garrison says:

    Went to court today for a debt collection by midland funding …..case was dismissed without prejudice ,….what does that mean for me …amd what do I do now ?

  4. Talmadge Garrison says:

    Thank you

  5. DW says:

    Cavalry SPV I LLC tried suing me on a 3rd party debt collection and the case was dismissed WITH prejudice. Received letter from different law firm again representing them for same debt?

    Do I notify the new law firm and inform them that they already tried suing me on this and that the case was dismissed WITH prejudice and to cease and desist Cavalry’s harassment?

    Thanks!

    • John Watts says:

      DW,

      You should not have been contacted by anyone on this debt. Cavalry knows it lost the case so it is violating the law (Fair Debt Collection Practices Act) if I am understanding what happened.

      Contact my office directly at 205-879-2447 and we can set you up a meeting with either Stan Herring or with me to discuss the next step.

      My suggestion is not to send any letter to the lawfirm until we talk.

      I’ll send a direct email to you also.

      Thanks and sorry you are having to deal with this.

      John Watts

  6. Jeff says:

    I’m being sued by portfolio for a debt of $5000 dollars.I sent my answer to the court.I stated in the answer”I’m contesting the amount this debt collection agency is claiming”.

    Was that a good answer?This my first time being sued.

    Thanks!

    • John Watts says:

      Jeff,

      Being sued by Portfolio Recovery Associates (PRA) can be a scary process. Like any debt buyer suit, the biggest danger is not answering. If you don’t answer, PRA gets a default judgment.

      You answered so that’s great!

      I don’t know where you live so I don’t know the legal rules you are operating under but let’s assume you are in Alabama.

      That is a good answer. Sometimes people also plead (put in their Answer) what are called “affirmative defenses” which are things such as “statute of limitations has expired”, etc.

      But the main thing is to contest the amount sued for and even more than this, dispute that PRA has the right to collect any debt from you.

      I’m assuming you never borrowed any money from PRA or bought anything from PRA.

      So the only way PRA can sue you is to own the debt.

      The only way it can own the debt is to have bought it from a company that owned the debt when it sold it to PRA.

      Here’s an example.

      The debt is a Capital One credit card. Cap One allegedly sells it to Midland Funding, a well known debt buyer. Then Midland Funding sells it to PRA.

      PRA could only buy what Midland Funding owned. So it is not enough for PRA to say “We bought it from Midland so that’s the proof.”

      No.

      What did you buy from Midland? Did Midland really own it?

      When things, including debts, are bought and sold there are contracts involved. So PRA and Midland would have to, in my opinion, show the actual contracts and have the correct proof that these contracts include the debt sued upon.

      The debt buyers hate to show these contracts.

      Main reason is often the contracts say “The seller makes NO representations about the quality or accuracy of any of the information about the accounts sold.”

      Think about that.

      The seller is saying “We aren’t promising you the debt buyer that the accounts are accurate.”

      But yet the debt buyers, like PRA, come into court and act like these contracts are the “Gospel Truth” when that is the furthest thing from the truth.

      Probably a much longer answer than you wanted or needed but hope that helps.

      You may want to read/watch this article/video on the 5 options when sued by a debt buyer — hope you find it useful.

      Best wishes!

      John Watts

  7. Jeff says:

    John,

    I took my answer to the court on the 8/28 and mailed it to PRA on the same day.I haven’t receive any phone calls from them,and I check the court records every morning.Do they normally take this long to respond?I know it’s alone been 11 calendar days,but I thought it would be swift response.

    Thanks!

    • John Watts says:

      Jeff,

      I don’t know the process in Florida but here in Alabama you normally get a trial date notice from the court within a week or two of filing your answer if you are in District Court (less than $10,000) or Small Claims court.

      Even if you don’t hire a lawyer, I would get with one in Florida who does this type of work and ask them to give you an overview of the process in Florida so you know what to expect.

      You may have other collectors you are dealing with that may be violating the law and the lawyer can help you with that as well.

      Best wishes!

      John Watts

  8. Melissa says:

    Hello, John. Here’s my question. I am in California and was sued by Chase Bank. I set up some payments with their collection law firm before it went to trial. Was paying the payments and then the account went to a different law firm who entered a dismissal without prejudice. I called that firm and they told me they were not pursuing the suit and the previous law firm was no longer handling it but they could sue if they wanted to. My question is would the SOL (which is four years in CA.) go back to the original default date on the account or the date which the dismissal was entered or the last day I paid to the previous law firm?? Should I be concerned they may sue me again? Did I get lucky?

    • John Watts says:

      Melissa,

      I’m not sure how CA does the statute of limitations. My suggestion is get with a CA consumer lawyer — every state tends to interpret this type of thing differently.

      I do suggest you pull your credit reports and see what kind of credit reporting you are getting from Chase Bank — that may be helpful to the lawyer you go see.

      Best wishes.

      John

  9. Christine says:

    Hi John,

    We had to do a short sale on our home during the recent recession, and the lender, Wells Fargo, agreed to forgive the amount left on the primary mortgage, but sued us for the balance on the home equity loan (both items were with Wells Fargo.) They passed the home equity piece to a debt collection company in New York, where we resided at the time, and we reached an agreement to make payments. We have been paying the monthly amount faithfully for two years, but we just received a Stipulation of Discontinuance (without predjudice) from the debt collection firm. Why would they send this? Do you think this means they are planning to sue us again, and if they do, how should we respond?

    Thank you! Christine

    • John Watts says:

      Christine,

      I don’t know what the stipulation of discontinuance means — that appears to be a New York court procedure.

      What happened to the home equity suit? Did they get a judgment against you? Was there a settlement agreement that the court approved?

      I’m not sure where you stand at the moment.

      If you now live in Alabama feel free to call us at 205-879-2447 and we can talk about where you are with this debt collection company now and what your options are going forward. I just don’t know from your question if the agency will sue you again or if you are done with them.

      Thanks and feel free to give us a call.

      John Watts

  10. Alan says:

    Thank you for publishing this very helpful web site. I have been answering the various actions of a 3rd-part debt collector on my own and now I have received a Stipulation For Dismissal with prejudice from their lawyer. I am very tempted to sign it but I have some concerns. The terms of the settlement are not specified, nor have they been fully agreed on. So I’m not exactly sure what they think the terms of the settlement are. Also, they have not signed it, so if I sign it, they get to decide if they want to use it or not. Should I sign it?

    • John Watts says:

      Alan — thanks for kind comments!

      It sounds like you have been sued and now you are being offered a stipulation for dismissal.

      I can’t give specific advice without knowing your situation in more detail but here are some thoughts for you:

      1. The advantage of signing it is the case will be over.
      2. You mentioned that the terms of settlement are not specified — are you to pay any money or is the debt buyer going to drop the case?
      3. Technically both sides have to sign it for it to be effective so you are right that you signing it leaves them in control.
      4. As far as whether to sign it, it depends on how strong or weak their case is against you and whether you want to go to trial or not.

      If you are in Alabama feel free to give us a call at 205-879-2447 and we’ll be glad to chat. Best wishes whichever route you take and congrats for getting them to this point!

      John Watts

  11. John says:

    John,
    I hired a lawyer to fight a lawsuit vs Midland funding.
    According to my lawyer they want to agree to dismissal with prejudice if we agree to pay our lawyers respectfully. I requested in writing for them to update/remove information from my credit report.

    The question I have does this mean I can have the original creditor removed as well from my credit report?

    If not how do I assure myself that this doesn’t get resold to another creditor and I would have to go thru this all over again?

    Thanks for providing the great information that you do.
    John

    • John Watts says:

      John,

      First thing is you need to get with your lawyer as I don’t know the details. Here are some general thoughts for you though….

      If the settlement agreement provides for deletion of credit reporting, then that should take care of Midland being on your credit report. You may want to calendar about 90 days out to make sure this has happened — pull a report then.

      Now as far as the original creditor, normally they are not required to delete as they were not part of the lawsuit (unless you had an unusual case).

      Typically the settlement between you and Midland will say that Midland will not sell or transfer the debt — so it they do you may be in a position to sue them.

      If the original creditor (let’s say Citibank) transfers the debt to some other collector, then you typically would have a very interesting conversation with Midland because your settlement agreement with Midland probably says that Midland owns the debt. So someone has some explaining to do.

      I think you will be fine — always a good idea to be very vigilant about what is happening with your credit report, with calls coming in, with collection letters, etc.

      You are welcome — thanks for the kind comments!

      John Watts

  12. Gene says:

    John,

    Midland funding had been sending me letters and reported a dept on my credit report. I didn’t pay it. All of a sudden it shows up as payed and settled on Credit karma.com. I call midland funding customer service and they gave me an extension that I need to call during the week. The person would not tell me if there was still a open judgement against me. should I call back?

    Thanks Gene

    • John Watts says:

      Gene,

      If it was me I would call them to find out what happened.

      It could be the credit karma is wrong — check your real reports at AnnualCreditReport.com.

      Were you sued?

      Do you think there is a judgment against you?

      If you are in Alabama give us a call at 205-879-2447 and Carolyn can look you up on the court system to see if any lawsuits or judgments against you from Midland.

      Best wishes!

      John Watts

      • Gene says:

        Thanks John,
        I received bills from them but never was sued. I live in NY and I actually tried to pay it but they were involved in a class action law suit and would not except my money. It always showed as a judgement against me on Credit Karma and then it just showed up settled 2 weeks ago.

        Thanks for your help!!!
        Gene

        • John Watts says:

          Gene,

          Thanks for info — that is very odd. Try Brian Bromberg in New York City — he can help you. Let him know I sent you — we run into each other at conferences around the country.

          If he can’t help you I bet he can get you to someone who can in NY.

          Best wishes!

          John Watts

  13. TF says:

    Received lawsuit from midland, filed my answer appeared for my first hearing and was told by clerk Midland had filed a continuance. Got a call the day before my 2nd scheduled hearing that they had postponed again. A week before my 3rd scheduled hearing I received a fraud investigation letter/form from Midland that wanted me to supply personal info and a signature, which I did not reply to!! Finally a hearing… except a no show from Midland funding! Judge ordered mine and three others dismissed. We asked for a dismissal with prejudice but he informed us he could not do that due to the fact it was our first time at court with them!??! Why is this? If we don’t show they get what they want but if they don’t show, nothing!

  14. Giacomo Losacco says:

    Hello

    I recently was summoned to court for an issue that happened five years ago where supposedly I was on a lease and the person living there (Ex girlfriend) accrued some fees and didn’t pay rent. I signed a lease from July 2010 to July 2011. After that I never resigned the lease. However somebody forged my signature on the lease from July 2011 to July 2012. After countless hours of reaching back and forth with the Apartment complex and getting no where, I reached out to the collection agency suing me. I told them the whole situation and they had two leases and did notice on the call that the first lease from 2010 that had my signature did not match the signature from the 2nd lease where the charges were accrued in September of 2012. They did an investigation and reached out to get more information on the matter and concluded that indeed that was not my signature. I emailed them a copy of my license to finalize the whole ordeal so they could verify the first signature on the 2010 lease at least matched my license and it did. After that they said I should have never been liable for these charges and that they were going to dismiss me from the charges with prejudice. So I asked them if I had to go to court and or do anything else to resolve this matter and they said that’s all they can tell me is that my name has been dismissed from the suit. They can’t give me any advice on what i should or should not do come December 22nd which is the court date.

    Any advice or consultation would be very very much appreciated as this means a lot to me and my credit score means a lot to me so I don’t want to make the wrong move. I have learned so much more just from this site than talking to many lawyers face to face who said they don’t have any expertise in this area. So definitely thank you for that. But just not sure if I still need to go to court on the date to show the judge the dismissal.

    Thank you for your time and look forward to hearing from you soon.

    • John Watts says:

      Thank you for your kind comments — appreciate them!

      I can only tell you about Alabama — I’m assuming you are here in Alabama.

      If you were dismissed with prejudice from the suit, there are several possibilities.

      First, you were named along with someone else (ex-girlfriend, etc). In that case, you should get a copy of the order saying this. Or you could call the court to verify.

      Second, if you were the only defendant, then the case should be over. Again you should get a copy of the order dismissing you with prejudice and you could call the court. In both situations you should also receive a notice or motion to dismiss you with prejudice. That’s what the collection lawfirm would file.

      Third, its possible whoever you spoke with did not tell you accurately what was happening.

      Bottom line is you need to see the dismissal with prejudice to have some certainty about this. If you don’t, then I would make sure to go to court either on your own or with a lawyer to make sure this gets handled.

      If you are in Alabama, call us at 205-879-2447 and ask for Carolyn. If you give her your case number or other information, she can look your lawsuit up online and tell you what the online court system shows.

      Best wishes and congrats for working so hard to get this done!

      John Watts

  15. Natsu says:

    Hello. Thank you so much for all the helpful information. I don’t live in Alabama but I have a question I hope you can help me with. Do I still have to answer the Summons after a settlement has been agreed upon?

    I managed to settle a debt with Calvary on my own (the lawyers I talked to wouldn’t take my case because the amount owed is only $500.) I got the settlement letter (with all the important infomation on it), sent them my payment, and after they received my payment, they sent me another confirmation letter. When I talked to them on the phone, they said my account would be closed and the case would be dismissed after they received my payment (it’s a one time, paid in full amount.)

    They received my payment last week, but I checked the court docket and the case hasn’t been dismissed yet. I don’t know how long it usually take for them to dismiss the case, but I’m a bit worried The due date for my summons is in two days, but luckily I live close to the court house so I can drop off my answer anytime. Can I get a default judgment if I don’t file my answer? (even though we have reached a settlement?)

    • John Watts says:

      Natsu,

      Great question — thanks for asking.

      Quick disclaimer — check with lawyer in your state as I don’t know the rules where-ever you live.

      More substantive answer — I’ll answer as if this was in Alabama and hopefully that will give you a good start.

      I always file an answer. That way there is NO chance of a default judgment.

      If you do get a default judgment, you should be able to set it aside due to the settlement. But not 100% guaranteed. Why take the chance?

      Why spend the time and effort constantly checking rather than filing an answer? After filing an answer I would send a copy to the lawyers and say, “Here’s my answer. I noticed you have not yet dismissed the case with prejudice. When will that be happening? Thank you.”

      It could be they are waiting on the check to clear (if personal check). Or maybe they “batch” dismissals and only do those once a week or every other week. Could be (probably is) a perfectly understandable reason but since you settled, and dismissal was a term of settlement, perfectly fine for you to ask the lawyers. I would do it in a nice non confrontational way. It could be they have already asked and the court is the delay (judge in trial, etc).

      So bottom line is I would answer the lawsuit to protect yourself.

      Best wishes and hope it goes great for you!

      John Watts

      PS — remember to check your credit reports to make sure Cavalry is either deleted or showing a zero balance. If you settled, you owe them nothing so zero balance is required. Maybe your deal was they delete — check your settlement papers.

  16. Nick says:

    Hello John,

    I am not an AL resident but I too have a question.

    I’m being sued by PRA. I did submit my acceptance of course denying allegations. I was offered a deal to pay a low monthly payment interest-free. That arrangement got drafted up as a proposed order but the judge kicked it back stating this was a motion for relief not a judgement of debt.

    My question is, was that a bad move for me sign, because I’m afraid that will reflect on me as an admission of debt owed after denying allegations? With it being kicked back, is that favorable for PRA or for me?

    Thanks again for all the helpful information!

    • John Watts says:

      Nick,

      I don’t know how other states handle it but I’ll answer as if you were in Alabama.

      Typically, a judge won’t consider proposed settlements. We want to encourage both sides to negotiate and talk and that is not used against them. So if you offered PRA 1 dollar, and they countered, this would not mean PRA admits you don’t owe the whole amount. They are just negotiating.

      In the same way, when you denied the allegations but considered a low monthly interest free payment plan, that was just you using good business judgment. (Now in Alabama I think it is usually best to fight and pay nothing but sometimes a great deal should not be turned down — all depends on the circumstances).

      So the bottom line is I do not think this was a bad move for you (unless your state is different — check with a consumer protection lawyer in your state). And the judge rejecting it I don’t think helps/hurts either side. Judge is just saying in his or her court, they don’t allow whatever you guys filed.

      I would suggest getting with a lawyer in your state and then you or the lawyer you hire get with PRA and figure out how to do the settlement in a way the judge will accept or figure out how to fight the case.

      Hope that helps you get started and thanks for the comment. I wish you the best….

      John Watts

      • Nick says:

        Thanks John for the quick response!

        The attorney assigned is income-based government legal assistance and sounds like they are intimidated by PRA. I based that off of their responses to a series of questions I asked.

        1. Do they have all the original paperwork?
        A: Yes they have all their paperwork.

        2. Have you researched them and got an idea of their reputation?
        A:. Yes, and they know their stuff.

        3. What is the judge like assigned to this case and how he handles sure like these?
        A: Honestly, he’s one of the ‘meanest’ jusges I’ve ever worked with.

        Then the attorney added: they are offering the best deal I’ve ever seen $__ month w/no interest.

        So I may be incorrect in my observation but the attorneys answers seem to be swaying trying to get me to do this deal. Every question I asked had a response of, for a lack of better words, ‘no hope’; yet, I come across this site and you seemed pleased that you will be battling PRA.

        The only ‘hope’ is the fact that I’m an independent contractor. That being said, I know laws differ from State to State but I would assume, not being a legal professional, that there are some general practices that are exercised nationwide dealing with debt collectors and maybe some ‘technicalities’ that do differ from State to State.

        I just don’t know to assume if the attorney is intimidated and to move forward and battle or to pull back and take what I can get.

        Its almost like as if I was given a 2nd chance with the judge kicking back the proposed order.

        • John Watts says:

          Nick,

          I understand what you are saying. I wish I could help you but it is very much a local decision. Some judges do differ on how they rule and that has to be considered.

          Who are the lawyers suing — are they skilled, or not skilled? Makes a difference.

          I completely get what you are saying about maybe getting a second chance. It all comes down to do you trust your lawyers? If you do, then follow their advice. If you do not, then I would question why have them as your lawyer? If you don’t have them as your lawyer, can you afford to hire a lawyer? If not — then you may need to “dance with the one that brought you” if you know what I mean.

          I wish you the best whichever path you choose!

          John Watts

  17. Julianne says:

    I was sued by Midland via local counsel. I hired an attorney and responded to the lawsuit. After a few months Midland’s attorney convinced my attorney they would be willing to send an “expert” to testify at my court trial in my middle-of-nowhere town. So my attorney encouraged me to settle. Which I did, for $950 (down from $1,800), settlement agreement signed and all, and we set a date for me to pay Midland via their attorney 6 weeks later.

    In the meantime, Midland’s counsel filed a notice of dismissal WITH prejudice. When it came time for me to pay, I asked my lawyer where to send the money. He told me to call the law firm representing Midland to make arrangements for payment. I did that and the law firm really didn’t want to deal with me directly since I was rep’d by counsel, but my lawyer didn’t want to invest any more time either since I had paid him in full.

    Anyway, this law firm had no idea how to apply my payment and they kept making me call them back each week, for several weeks, while they tried to figure it out. Eventually, the person I kept dealing with at the law firm said to send a check made out to Midland via their law firm and they would figure it out. Fast forward a month, and Midland returns my check to me with a note that simply said they were returning my check because “the account is closed.”

    I called my attorney – he said he would call the other attorney, but I haven’t heard from him and I don’t know what to do. Midland won’t take my money and neither attorney on either side seems to care. I’m guessing someone made a mistake somewhere – perhaps the dismissal with prejudice was a simple typo – or, in Midland’s computer, my account is closed and they don’t know how to apply my payment. Whatever, man, I can certainly use the money elsewhere but is there anything at all Midland can do since I have a dismissal with prejudice? I’ve bent over backwards trying to pay them – I can’t believe I can’t talk them into taking payment. I would think they would at least want that small amount to pay their puppy mill attorney.

    • John Watts says:

      Julianne,

      This is something you need to get with your attorney on — I know you are caught in “no man’s land” where no one will talk to you.

      Here’s what I would tell a client of mine if they were in this situation:

      1. You signed the settlement agreement and you need to honor it. Midland can enforce that agreement against you.

      2. So I would send the money along with the settlement agreement to the collection lawyers and say this is my final attempt to pay you. If you return the money to me, then I’m assuming we are squared away and I owe nothing. Send it certified and keep a signed copy of your letter, a copy of your cashier’s check, etc.

      3. Check credit reports — what is Midland reporting on you? A full balance ($1800) or a partial balance ($1800-950=$850)? (See this lawsuit against Portfolio for why the partial balance would be wrong assuming you have paid it)

      4. Verify the case was dismissed WITH prejudice.

      It is weird, isn’t it, that they badger you for the money and then you send it and they don’t want your money. Welcome to the wacky goofy world of debt buyers. Common sense has no place in this strange world you have entered.

      Again, try to get with your lawyer but if he won’t help you, consider what I wrote above and that may give you some ideas. I don’t know what state you are in etc so the above is what I would have someone do in Alabama.

      Best wishes and I hope you get some clarity on this ASAP!!

      John Watts

      • Julianne says:

        I’m going to follow your steps, Mr. Watts, including calling the court to verify the title of the actual document (state courts are electronic in my state, but unlike with Pacer, you can see what’s on the docket but can’t download anything). Thanks for taking the time to reply.

        • John Watts says:

          Juliane,

          You are very welcome.

          Hope you get good news soon and can put all this behind you.

          Great idea to call your court.

          Best wishes

          John Watts

  18. Ms.Clarke says:

    2 Questions. I filed for a Chapter 7 bankruptcy & I’ve already went to court for it. What do I do if it looks like some creditors weren’t added into my bankruptcy, is it to late to add creditors?

    2nd question..One creditor, Dumas & Mcphail, llc retained by Gulfco of AL LLC Assignee of Larry’s Pistol & Pawn sent a sheriff to serve me on March 3rd, paperwork dated 2/27/2018. What’s confusing is I got a letter in the mail today as well March 3rd from the same company above. I’m confused what this letter is saying, can you help me to understand it?..

    “Comes now the plaintiff in the above styled cause and moves this court to dismiss this matter without prejudice.”

    At the bottom it says..

    “I hereby certify that on this 1st day of March 2018, I served a copy of the foregoing to (my name and address), by placing a true copy of the same in the United States mail, first-class postage prepaid.” Collection lawsuit.

    • John Watts says:

      Ms. Clarke,

      If you have a bankruptcy attorney, get with them on these questions. I’m assuming you are in Alabama and have no attorney. If I’m wrong, then ignore what I put below.

      1. Normally it is not too late to add creditors but this also depends on where you are in the process of the chapter seven, your judge, why the creditors were not added in the first place, etc. So you need to move quickly on this.

      2. Dumas & McPhail is a collection and foreclosure lawfirm out of Alabama. Sounds like they sued you but then asked the court to dismiss withOUT prejudice. This means they can sue again. Most likely it is because they realized you filed bankruptcy but you do need to check this out to make sure why they did this. Does the motion say anything about “Defendant has filed bankruptcy” or anything like this?

      Again, if you have an attorney contact your own attorney. If not, call us (if you live in Alabama) and ask for Carolyn and she can look up the lawsuit for you. We don’t normally do any direct bankruptcy work but can get you to an attorney who does bankruptcy to help you with the bankruptcy issues (not listing all creditors, etc).

      Best wishes…

      John Watts

  19. hans mantel says:

    I was working with Blitt and Gaines in Illinois over a debt worked out agreement then was injured and could not make payments. They tried to reinstate the case and it was dismissed with prejudice but they are still calling me can i now ask them to stop calling because of the dismissal

    • John Watts says:

      Hans,

      If this was in Alabama there is a good chance it would be wrong for them to call. We would have to look at the order and why it was dismissed with prejudice.

      But with you in Illinois, I simply have no idea. Does a dismissal with prejudice mean you do not owe the debt? I don’t know.

      My advice to you is to get with a consumer protection lawyer in Illinois and I bet they could tell you pretty quickly what your options are there. That way you can get solid advice and know your options — then you can pick the best option for you.

      Make a list of your questions you need answered so when you talk to the lawyer in IL, you can make sure and get those answered.

      Best wishes and hope you get solid advice.

      Thanks!

      John Watts

  20. Lee says:

    I have a question. I was sued by Midland funding and I agreed to a settlement. I paid them and I just recieved the letter saying it was dismissed without prejudice. This means they can sue me again. What should I do?

    • John Watts says:

      Lee,

      If you have a settlement in writing and you paid it, there would be nothing owed. So if Midland sued again, that would be wrong. Assuming the FDCPA (Fair Debt Collection Practices Act) applies, that would be a violation of the law.

      Probably it should have been dismissed WITH prejudice but even if withOUT prejudice, if you don’t owe anything as it is paid off, you should not ever be sued or collected on with this debt again.

      Do check your credit report to make sure Midland is reporting you owing a zero balance since it has been paid off.

      Best wishes!

      John Watts

Leave a Comment