Suing collection agencies and credit bureaus - Questions and Answers

Let's face it, we all try to avoid going to court due to the time required and the expense. However, sometime we have no other choice but to use the court system to get the big bad Credit bureaus and Collection agencies to follow the law. When these companies violate your rights, you have to fight back by taking them to small claims court. In this article, I will discuss some of the questions, and answers posed to me about suing in small claims court.  

Suing collection agencies and credit bureaus - Questions and Answers

What is small claims court?

It's an informal, inexpensive procedure to handle a claim. In this court, the plaintiff (you) and the defendant (the credit bureau, collection agency, or creditor) argue a cause of action in front of a judge that can produce a monetary award in between $100 to $10,000 depending on the state court. The benefits to filing in small claims court are as follows:

• You don't need an attorney
• The case is short
• You represent yourself
• You don't need any legal training
• There is a small amount of paperwork involved
• Rules of the court are simple

Suing collection agencies and credit bureaus - Questions and Answers

What are the powers of the court?

In the small claims, the judge can award claims for money such as out of pocket losses directly related to the subject matter of the suit. For example, you can be awarded the cost of the suit. These include the filing fees, sheriff's fees, and witness fees. The judge can also order the defendant to pay punitive damages if he violated a state or federal statue, and it allows damages. The judge, however, cannot issue out rulings on specific performance (making someone comply with a contract clause) or injunction relief (stopping something from happening). 

Suing collection agencies and credit bureaus - Questions and Answers

What is a court of Equity?

These courts have the power to order a company to complete a specific performance. If you are trying to get an item removed from your credit report, and you sue the credit bureau in a court of equity, you have a good chance of getting it removed. The reason for this is the credit bureau/creditor/collection agency won't show up, and you get a default judgment. Now, if you are suing for monetary damages, the bureau may file a motion to have the case moved to Federal court. In this case, you would have to hire an attorney. Before filing your claim, ask the clerk of court if the court is a court of equity. 

Suing collection agencies and credit bureaus - Questions and Answers

What type of cases can be heard?

Any type of case involving a small amount of money can be heard. The courts have limits on how much you can sue for, and if your claim is over that limit, you must hire a lawyer and sue in higher courts. 

Who can I sue?

Any person or business that currently resides, works, or does business in your state. You must, however, be able to provide a current address (not a P.O. BOX) for the defendant. Talk with the clerk of the court to make sure that the defendant's address is in the right district. Moreover, you want to make sure you have the bureau or collectors correct name to avoid the case from being dismissed based on a technicality. 

As you can see, there are many things, you need to know before deciding to bring a lawsuit against the agencies. Stay tune because in my next article I will provide you with more information on suing the agencies. Now that you are empowered with more information, go out there, and take action.