“I got sued by a debt collector and the case was dismissed without prejudice — what does this mean?”
“I got sued by a debt collector and the case was dismissed without prejudice — what does this mean?”
Being sued by a debt collector or debt buyer (Midland, LVNV, Portfolio, Cavalry, etc) is no fun, so it is often with great joy the consumer realizes that the debt collector has agreed to dismiss without prejudice.
This is not necessarily a bad thing.
However, it is not a complete victory and it opens you up to being sued again.
As a reminder, here is how a case normally proceeds in Alabama;
- Collection lawsuit is filed
- You are served
- You file an Answer
- Judge sets the case for trial
- Either you try the case or the debt buyer will dismiss the case with prejudice so the case is ended.
So what is this “dismissal withOUT prejudice?”
It is where the debt collector can drop the case but it does the collector no harm “or no prejudice” to do so. We recently talked about how a dismissal with prejudice means the case is over and you cannot be sued again over this debt.
So “without” prejudice is kind of like a “do-over.”
The case is dropped but as long as the statute of limitations has not expired, there is no harm to the debt collector filing another lawsuit against you.
“So what should I do if the debt collector tries to dismiss the case without prejudice?”
There are two schools of thought here.
First, any type of victory is significant so be happy with any type of dismissal. You may not be sued again. Its ok to take a chance on being sued again so there is no guarantee you will be sued again.
Second school of thought — and this is what we do in our cases — is we oppose any effort to dismiss the case without prejudice. We want a complete victory not a partial one. If you get sued again, the following could happen:
- You may not respond in time and the debt collector gets a default judgment against you.
- It may be that you have already spent whatever money you have to defend yourself and may not be able to afford to hire a lawyer again.
- You may have already taken time off from work for your trial date and now at the last moment the debt collector wants to drop the case but this may cost you another day’s worth of work.
- Or, you have already dealt with the stress of the lawsuit so why put yourself through this again?
Also, if you don’t get a dismissal with prejudice, then:
- Your credit report will not show the debt buyer removed as it generally must with a dismissal with prejudice.
- The debt could be sold to another debt collector who could sue you for the debt.
“So what do most judges do if I oppose a motion to dismiss without prejudice?”
You definitely want to get the advice of a lawyer but in general a minority of judges allow for dismissals without prejudice but most do not after you have answered the lawsuit.
Once you answer, then most judges say you are “entangled” enough with the debt collector that if you don’t want a dismissal without prejudice then you don’t have to accept it.
Certainly you need to make your own decision but our feelings are very strong that if a debt collector is going to drop the case then it needs to do it all the way so the victory is complete or it needs to try the case.
Contact Us.
If you live in Alabama and have questions, you can reach us by phone at 1-205-879-2447.
Or, you can always fill out our online contact form and we will reach out to you.
Will also be happy to mail you a free information package to you as you decide what to do.
Thanks for reading, and have a great day!