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?
A dismissal with prejudice means the case is over.
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.
Hello, I live in California. I was sued by Synchrony Bank who bought debt from Care Credit. It was charged off in or about 2007 or 2008. Synchrony Bank states that I made a payment in 2014. At court I received a letter that my case was dismissed “without prejudice” in 9/21/2015. There is also a date on the letter 6/25/18 @ 8:30 a.m. for a hearing. I believe this to mean that I have to show up in court again. I want this to be dismissed “with prejudice” so that I can get this off my credit report before I move out of State. I would like to know how I can make this happen.
Beverly,
I’m sorry I can’t help you with your California case. I simply don’t know the rules.
You really need to get with a California lawyer (consumer protection) — it may be you are supposed to be in court or maybe not. I assume you are based on what you wrote.
But how to get the case dismissed with prejudice? Your attorney can help you with that.
Best wishes and sorry I can’t give you any advice other than talk to a lawyer in California.
Thanks!
John Watts
American Express filed two suits against me, one in 2015, which I lost; and one in 2017, which the judge dismissed without prejudice because AmEx couldn’t “find’ me to serve the papers. Both balances are now charge offs on my credit report. No one from American Express for either suit has ever contacted me to collect for the 2015 or to refile for the 2017. Are the charge offs legal? Is there a statute of limitations on either case?
Lyn,
I’ll assume you live in Alabama — if somewhere else the rules can be different.
In Alabama the judgment one can be collected at anytime in the ten years following the judgment — so that would be to 2025 if judgment was in 2015. After the ten year mark, they can get the judge to extend the time to collect the judgment for another ten years so that would be to 2035. And all this time it is making at least 7.5% interest.
On the 2017 case that was dismissed withOUT prejudice, it is like they never filed it. So we look at the statute of limitations roughly from when the last payment was made. Then it is either 3 or 6 years (lots of controversy here about that).
So it may be too late or they may still have time.
They can report a charge off and really should report it 6 months after the date of last payment.
If in Alabama give us a call and we can look up the cases and give you our thoughts on them.
Best wishes
John Watts — 205-879-2447