Iâ??ve just recently heard about a friend of my husband who had someone sue his creditors, in small claims court, and they removed all of his debt. Is this possible? I have been doing much research about it and havenâ??t been able to find something that exactly matches what he claims happened. Is this the same as debt settlement/validation or can debt validation only be used with collection agencies? I copied a sample lawsuit template from the website, but Iâ??m not sure if this is what Iâ??m supposed to use or if I should use it at all. Can you please let me know if this is true or if I should get my head out of the clouds? I live in CA.
Before you think of suing, anyone, for anything, you need to ensure that the party which you're thinking of suing has violated the law (or their agreement), in some way. Unless your state says otherwise, validation through the FDCPA is only for debt collectors as defined by the FDCPA. Depending on the type of account involved, other federal laws may apply to the original creditor, like the FCBA (Fair Credit Billing Act - the law which is referred to by the back of any credit card billing statement "you have 60 days from the date of this statement to dispute any charges.") Now, if your state has its own FDCPA-like provision of its own, or somehow defines that original creditors must comply with the practices outlined in the FDCPA, then you have a much nicer list of potential violations outlined for you. A good place to look would be to your states Consumer Protection Law, if it is easily accessable. If the original creditor is reporting the account on your credit file, then the FCRA applies, however to have personal grounds to sue the creditor under the FCRA, the consumer must notify the creditor through the CRA that the account is disputed, for a specific reason, which the original creditor must reasonably investigate and then conclusively verify with the CRA. If the original creditor fails to do either of those, and you have proof that they couldn't have either reasonably investigated, or conclusively verified the account, then you may have a cause of action under the FCRA. There is a whole lot of research which needs to be done before you begin to think in terms of a lawsuit.
