Point out that the debt was transferred, and so the creditor should not be reporting a balance. If the lender continues to report a balance on the debt, an attorney consultation should be your next step. It makes sense to have the attorney try to correct the mistake. If they cannot do so, a lawsuit is the logical next step.
By law, charged off accounts and collections can only appear on your credit reports, for 7 to 7. What does this mean? At that point, the lender writes off the debt. They might try to collect on the debt themselves, or instead transfer the debt over to a debt buyer or collection agency. To become to days late on a loan, you must first be 30 days late that is, miss your first of many payments.
This date is known as the date of first delinquency. So, if you first stopped paying on a debt in January , it should be removed from your credit reports by no later than July It is not uncommon for lenders, debt buyers and collection agencies to make mistakes, and list an incorrect date of first delinquency.
In other cases, they list incorrect dates on purpose, to keep accounts on your credit report for longer than permitted, and pressure you to pay on a debt. Some debt buyers and collection agencies list the date the debt was transferred to them as the date of first delinquency, rather than when you stopped paying on the original account.
This can lead to accounts remaining on your credit reports for many years after legally allowed. Remember that debt we talked about, which you first stopped paying in January ?
Suppose a debt buyer purchases the date in January of , and starts listing that as the date of first delinquency. The account would now remain on your credit reports as late as July of This is innacurate, and means the account will be damaging your credit for much longer. They can usually prepare a dispute letter for you to send to the credit bureaus, seeking to have the disputed account removed.
After that, the next step is to follow up with the creditor, and if the issue still remains unresolved, file a lawsuit.
If you owe a creditor or debt collector money, they can report the account to credit bureaus. Of course, as discussed earlier, they are required to report the account accurately.
Most consumer protection attorneys provide a free initial consultation. Use that opportunity to get their opinion on your case. Interview several attorneys so you can be more confident you're choosing the best one for you. Choose which court to use. You may be able to sue the credit bureau in either state or federal court.
If you're suing under the FCRA, a federal law, you generally would sue in federal court. However, your state may also have consumer protection laws that deal with your dispute.
Before you can file a lawsuit in state court, find out if there's a state law dealing with your problem. Filing a lawsuit in state court generally is less expensive and less time-consuming than suing in federal court.
The court needs personal jurisdiction as well, which generally means you must use a court that has power over the credit bureau. Your attorney will help you choose which court to use, based on a number of factors. File your complaint to initiate your lawsuit. Your complaint is a legal document that introduces you and the credit bureau to the court and explains the dispute.
It then describes how the credit bureau's actions have violated the law and outlines your demands. The FCRA provides for statutory damages, actual damages, and punitive damages.
You typically want to identify these amounts separately. Have the credit bureau served with the complaint. After you've filed your complaint to the court, you must deliver it to the credit bureau so they have notice that you are suing them. This is done through service of process , typically with a sheriff's deputy hand-delivering the court documents to the credit bureau's registered agent. They may simply file an answer denying all of your claims.
They may also file a motion to dismiss. Exchange documents and information. After the credit bureau has responded to your lawsuit, you will enter the discovery phase of litigation.
During this phase, you and the credit bureau share evidence that may be used at trial. You may also have depositions, which are interviews conducted under oath in the presence of a court reporter. The transcript of a deposition is admissible at trial as evidence, and can also be used to discredit witnesses.
Discuss any settlement offers. As many as 95 percent of all civil cases are settled before trial, so odds are your case will not be the exception to that rule. You should expect the credit bureau to send you multiple settlement offers during the pre-trial stage. You may even get a settlement offer in response to your complaint. The credit bureau's attorneys know how much time and expense is involved in a trial, and they'll likely attempt to offer enough money to get you to drop your case.
Whenever the credit bureau makes a settlement offer, your attorney will present the offer to you and provide their advice. The decision of whether to accept or reject the settlement offer is always yours alone. Work with your attorney to prepare for trial. If you remain intent on taking the case to trial, your attorney will prep you for your day in court. Expect to testify at the trial and answer questions from the credit bureau's attorneys. Generally, you want to answer questions directly and honestly.
Give as little information as possible to answer the question. For example, if you are asked a yes or no question, simply answer "yes" or "no" without any elaboration. Method 2. Choose which method of dispute resolution to use. If you're looking for an alternative to suing in state or federal court, you generally have a choice between mediation and arbitration if you want to resolve a dispute with a credit bureau.
Arbitration is more similar to a trial, with more formal procedures. The results in arbitration are typically binding. Once the arbitrators make a decision, you may lose your right to go to court if you don't agree with the decision. Mediation is a much more casual environment in which a neutral mediator helps you and a representative from the credit bureau come to a compromise or settlement of the dispute. We can help you get errors removed so that your credit score is no longer being negatively affected.
We also frequently get money damages for our clients. The longer that a bad mark stays on your record, the worse is it for you in the long run. Our goal is to help you get wrongful credit reporting removed from your record quickly through any legal means necessary. We also get compensation for your damages. Attorney Robert Brennan has been helping Consumers successfully sue Experian, Equifax and TransUnion, as well as all of the big banks, credit card companies, lenders and debt collectors for over 20 years.
I get a lot of requests for information about all of the companies that keep files on citizens—you!
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