My debt collection lawsuit was dismissed with prejudice — now what?


Dismissal with prejudice is very helpful when sued by a debt collector

Problem of being sued becomes a great opportunity when you win — when the case is dismissed with prejudice

Summary

If you were sued by a debt collector (debt buyer) and your case was dismissed with prejudice, then this is the same as winning your case.  (I’m not talking about a settlement but where the court does this outside of a settlement).  And we are only talking about Alabama law — other states may be different.

As a dismissal with prejudice is the same as winning your case, this has important implications.

You do not owe the debt to the debt buyer who sued you.

So the credit reporting by the debt collector (LVNV, Midland, Portfolio, etc) must be deleted.

You should never hear from the debt collector again on this debt.

And you may be able to sue for money damages for the bogus lawsuit brought against you.

Let’s take a look at each of these in more detail.

You do not owe the debt to the debt buyer who sued you.

Winning your case means, under Alabama law, that whatever you were accused of, you are not guilty of it.  You were accused of owing Midland or some other debt collector money.

But you won your case.

You do not owe Midland or the debt collector any money.

So if you don’t owe any money, then what about the credit reporting?

So the credit reporting by the debt collector (LVNV, Midland, Portfolio, etc) must be deleted.

If you owe no money, then no credit reporting is allowed.

Think of it this way.

What if I (John Watts) reported you owed me $1000?  But you don’t.

So I can’t legally report this.

Same for Midland or Portfolio or whoever the debt collector is — can’t report you owe a debt a judge says you do not owe.

The day you win your case the debt collector should delete the credit reporting.  Otherwise it is false credit reporting under several federal laws.  (And frankly has always been false credit reporting since you never owed the collector the money).

To be safe you may want to dispute under the FCRA (Fair Credit Reporting Act).  You can send a dispute letter to the credit reporting agencies and include a copy of the complaint and the dismissal with prejudice.  This helps the credit bureaus (Equifax, Experian, and TransUnion) to know which debt should be deleted.  They can match up the Midland (or other collector) account with the one you were sued on.

Either it gets deleted or you sue the collector and potentially the credit reporting agencies.

You should never hear from the debt collector again on this debt.

Since you don’t owe the $3,000 debt or whatever you were sued for — no one can collect on the debt (which does not exist).  Certainly not the company that sued you — they lost.

And that collector or debt buyer can’t transfer the debt (which doesn’t exist) to any other collector.

Bottom line if you get a dismissal with prejudice and anyone bothers you on this debt again, they apparently are begging you to please sue them under the FDCPA (Fair Debt Collection Practices Act) for money damages.  🙂

And you may be able to sue for money damages for the bogus lawsuit brought against you.

So let’s think this through.  You were sued and the claim was you owed a debt.  But you don’t as the lawsuit was dismissed with prejudice.

Depending on the circumstances of the suit, the witnesses brought (or not brought), etc. you may be able to sue.

Under malicious prosecution which is an Alabama state law that prohibits bogus suits from being brought against people just like you.

Possibly under the FDCPA as debt collectors are not allowed to lie or be unfair.  Lying about you owing money and suing you seems to be the ultimate unfair debt collection.

There are lots of factors that go into this (not all of which we will put out in public for debt collectors to read!) so get with us and we’ll be happy to help you think through your options.

Final Thoughts

What’s your next step?  Your next move?

My suggestion is to find out where you stand right now.  Find your “current location” so you can decide what is best for you next.

It may be you should sue.  Or perhaps send a dispute letter to the credit reporting agencies and/or the debt collector.

Perhaps there is nothing to do — just enjoy your victory you won over the debt collector.

We can help you look at the big picture and see what you need to do now.

It is great to win to have these options so congratulations!

Call us at 205-879-2447 if you would like to chat or fill out our contact form and we’ll get right back with you.

John Watts

 

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