Which Creditors Can You Sue And What Can You Sue Them For

You have legal rights than protect you from creditors. Some of these legal rights are explained under the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. There are a few questions that should be answered in regards to claims you can have against your creditors. The first question that comes to me often is the one of "What can you sue a creditor for and when can you sue them?" To answer the question there are many different things you can sue a creditor over. One is suing them because of reporting false or inaccurate history to your credit. This claim is one of defamation or financial injury. The Ninth Circuit US Court of Appeals addressed this issue in Nelson v. Chase Manhattan in Case No. 00-15946. The court claimed that chase was responsible for damages for wrongs that took place.

Another thought that people have is suing the creditor for falsely reporting a disputed account to the credit bureaus. The answer again is yes. Yes suing a creditor for not reporting an account in a dispute on your credit file. Section 623 of the Fair Credit Reporting Act gives you specific reasons to sue a creditor. The fine for this erroneous credit reporting to your creditor is $1000.

Another creditor claim that people typically have is against collection agencies when collection agencies pull credit with out permission. When collecting on a debt, Collection agencies routinely pull credit for accounts that are in default. This happens when a creditor allocates the account to third party collectors. Once the account has been allocated to a third party collector who is not the original creditor the creditor has given up their right to collect on the debt. Consider that if a collection company who you have never heard of in you life demands that you pay on a debt that they might not be the only one who claims rights to collect. It is so important that you request validation of the debt so that you can know if the creditor who is pulling your credit has the legal rights to do a credit inquire or pull.

A valid contract must be showed which proves the assignment of the account to the collector was authentic or you will have a tough time knowing with a surety that the third party debt collector is the real holder in due course (the only person with rights to collect). (Collection agencies are not in the business of lending money and frequently more than one company at a time tries to collect on debts) The law states in the Fair Credit Reporting Act under Section 604 injury to your credit report and credit score is a $1000 fine. I don't know about you but if credit is pulled without permission and the creditor cannot verify that you gave them permissible purpose then I would consider a claim against them. The citing case law is Cushman, v. Trans Union Corporation v. US Court of Appeals in the Third District Court 115F.3d220, June 9, 1997, Filed (D.C No. 95-cv-1743)

In summary there are many reasons why someone could sue their creditors. If you find yourself dealing with bill collectors be sure to ask yourself what defenses and course of action you have under the Federal Acts that protect consumers.

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