I got sued and suit was dismissed without prejudice. What does this mean for my credit report?
What is a dismissal with prejudice and a dismissal without prejudice?
That could be because you settled, or it could be because they realize they can’t prove their case and they just drop the case. With prejudice means they cannot sue you again. We have a situation right now where a case was won by a consumer but the debt buyer Main Street Acquisitions sued our client again on the same debt.
That’s wrong because we won the first case — there is now (as you would imagine) a pending federal court lawsuit against Main Street for doing this outrageous act.
With prejudice normally means it must come off of your credit report and you can never be bothered on this debt again.
But what if it’s without prejudice. Without prejudice means it’s almost like the lawsuit never happened. So the next day, the next month, the next year, they can sue you again because they never really “lost” the last case.
With the new lawsuit, they have to make sure it’s within the statute of limitations, that it’s a legitimate lawsuit.
However, the fact that they sued you previously and dismissed it without prejudice doesn’t prevent them from doing it again. They can sue you again. In and of itself, a dismissal without prejudice does nothing for your credit report.
With prejudice almost always means they have to get it off your credit report. But without prejudice doesn’t mean that.
Here’s what it does mean. You got sued, you filed an answer and said, “I deny owing Midland, Main Street, Unifund, whoever it is … I deny owing you this debt.”
Well, that’s a dispute. Then if that company is credit reporting, and at least if they update your credit report … I won’t get into all the details about what if they don’t update, but if they do update, they must show the collection account on your credit report as being “disputed” or it violates the FDCPA (Fair Debt Collection Practices Act).
So let’s go back to the lawsuit that was dismissed without prejudice. Before it was dismissed, if you filed an answer denying it, and they update your credit report, they have to show your account is being “disputed.”
We’ve had them in the past say, “Well, that wasn’t a dispute letter.”
We’re like, “Seriously? A pleading in court that’s an answer, that’s like the ultimate dispute letter.”
We don’t get those arguments now, at least not very seriously. They will make them kind of on the front-end and they go, “Okay, yeah, yeah, I know you disputed it.” If they don’t mark your file as being disputed on your credit report, you may can sue the debt collector under the Fair Debt Collection Practices Act, the FDCPA. It’s a subsection called “e8” that has to do with credit reporting.
To answer this question, sued, dismissed without prejudice, what does that mean for my credit report?
In and of itself, it doesn’t mean anything, but probably you filed an answer.
So we have to check your credit report, and if it’s incorrect, then we look at suing these guys. I hope that that’s helpful to you.
If you are in Alabama we will be glad to talk with you — call us at 205-879-2447 or use our “contact us” page to send us a message.