How to Sue for Credit Discrimination
Gather information., Consult an attorney., Decide whether you want to be the lead plaintiff., File your complaint., Wait for a response., File your motion to have the class certified., Consider any settlement offers.
Step-by-Step Guide
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Step 1: Gather information.
Before you begin the process of filing a lawsuit, organize all the evidence you have regarding the credit discrimination, including copies of any correspondence with the lender.Generally, lenders may use factors such as income, expenses, debts, and credit history to determine whether to lend you money and under what terms – but they cannot use information such as your race, gender, religion, marital status, or whether you receive public benefits.
You want to have copies of every piece of written correspondence between you and the lender, as well as any notes you've taken regarding conversations that took place, either in person or over the phone.
Questions you were asked while applying for a loan or credit card may serve as evidence for credit discrimination.
For example, unless you live in a community property state a lender is not allowed to ask if you are married.
Additionally, lenders are not allowed to discriminate on you based on the fact that you receive public assistance, child support, or alimony.
These amounts are to be considered the same as any other income.
If the lender hasn't told you the reasons you were denied credit, you should ask.
Within 60 days of your application, the lender must provide you with a notice listing the reasons your application was denied.If you're thinking about filing a class action, you also will need some evidence that there are significant numbers of other people against whom the lender also discriminated for similar reasons. -
Step 2: Consult an attorney.
If you want to file a lawsuit in federal court, an experienced consumer protection attorney can best assess your case and your odds of winning at trial.Many consumer protection attorneys work on a contingency fee basis, meaning they are paid a percentage of your recovery or settlement.
For this reason you don't have to worry about any out-of-pocket expenses.
However, keep in mind that because their fees are contingent, consumer protection attorneys will be reluctant to work with you unless you have a solid case.
In some cases, your actual damages may not be worth the cost of filing a lawsuit.
However, there may be other consumers who have faced the same discrimination as you.
If you all band together and sue as a class, the lawsuit will have a greater impact.
A consumer protection attorney with experience handling class actions will be able to help you research your case and evaluate its class action potential., If you've decided to file a class action, you must evaluate the responsibilities of being a lead plaintiff and your ability to take on that role.Although you won't incur any out-of-pocket attorney's fees or other legal expenses, being the lead plaintiff in a class action lawsuit requires you to invest a significant amount of time and effort because you must work closely with the attorneys and appear in court.
However, in recognition of this additional time and effort, you may be entitled to a slightly larger portion of the award than you would be otherwise.
You also have the benefit of getting your money before anyone else in the class does. , You will initiate your lawsuit by filing the complaint with the clerk of the federal district court that has jurisdiction over the lender.Lawsuits under the ECOA must be filed in federal court.Your attorney typically will go through the complaint with you before he or she files it with the court.
Make sure you understand all the terms in each allegation.
These are the things you will have to prove in court.
In the case of a class action lawsuit, you have the additional requirement of showing that the damage or loss of all class members happened because of a common set of facts or legal interests.
In other words, if the lender rejected you for a loan because of your race, you must be able to show that everyone in the class was rejected for a loan by the same lender because of their race.
Once your complaint is filed, your attorney will begin the process of having the complaint legally served on the lender, typically by having it hand-delivered by a sheriff's deputy. , After the lender is served with your lawsuit, it has 21 days to file an answer or other response to your allegations.Don't be surprised if the lender files a motion to dismiss in response to your lawsuit.
This is a standard litigation defense tactic and doesn't mean you don't have a viable claim against the lender.
Even if no motion to dismiss is filed, expect the lender's answer to deny most if not all of the allegations set forth in your complaint.
This response doesn't necessarily mean the lender is saying the allegation is untrue – rather, it means you have to prove that allegation at trial. , If you've decided to file a class action lawsuit, you'll need to have the judge certify your class of plaintiffs.The judge will schedule a hearing on your motion.
If you've elected to be the lead plaintiff, you will be expected to attend this hearing.
Keep in mind that if the judge certifies your class, it doesn't necessarily mean that the lender is liable for the class's damages.
It merely means that you've provided sufficient evidence that all of you suffered similar damages for similar reasons.
You must additionally prove that a class action is the most efficient way to resolve the issues in the case.
In most cases, 40 or more plaintiffs with similar experiences will be a sufficient number of potential plaintiffs to justify a class action lawsuit. , Once faced with your lawsuit, the lender typically will make an offer to settle the claim rather than proceed to trial.In the case of a class action, often the defendant lender will become truly interested in settling your claim after the judge certifies the class.
Although your attorney may advise you on whether to accept or reject a settlement offer, the choice is entirely yours.
If you are the lead plaintiff in a class action, you must make the choice of whether to accept a settlement offer on behalf of all of the members of the class, including members who may not yet have been identified. -
Step 3: Decide whether you want to be the lead plaintiff.
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Step 4: File your complaint.
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Step 5: Wait for a response.
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Step 6: File your motion to have the class certified.
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Step 7: Consider any settlement offers.
Detailed Guide
Before you begin the process of filing a lawsuit, organize all the evidence you have regarding the credit discrimination, including copies of any correspondence with the lender.Generally, lenders may use factors such as income, expenses, debts, and credit history to determine whether to lend you money and under what terms – but they cannot use information such as your race, gender, religion, marital status, or whether you receive public benefits.
You want to have copies of every piece of written correspondence between you and the lender, as well as any notes you've taken regarding conversations that took place, either in person or over the phone.
Questions you were asked while applying for a loan or credit card may serve as evidence for credit discrimination.
For example, unless you live in a community property state a lender is not allowed to ask if you are married.
Additionally, lenders are not allowed to discriminate on you based on the fact that you receive public assistance, child support, or alimony.
These amounts are to be considered the same as any other income.
If the lender hasn't told you the reasons you were denied credit, you should ask.
Within 60 days of your application, the lender must provide you with a notice listing the reasons your application was denied.If you're thinking about filing a class action, you also will need some evidence that there are significant numbers of other people against whom the lender also discriminated for similar reasons.
If you want to file a lawsuit in federal court, an experienced consumer protection attorney can best assess your case and your odds of winning at trial.Many consumer protection attorneys work on a contingency fee basis, meaning they are paid a percentage of your recovery or settlement.
For this reason you don't have to worry about any out-of-pocket expenses.
However, keep in mind that because their fees are contingent, consumer protection attorneys will be reluctant to work with you unless you have a solid case.
In some cases, your actual damages may not be worth the cost of filing a lawsuit.
However, there may be other consumers who have faced the same discrimination as you.
If you all band together and sue as a class, the lawsuit will have a greater impact.
A consumer protection attorney with experience handling class actions will be able to help you research your case and evaluate its class action potential., If you've decided to file a class action, you must evaluate the responsibilities of being a lead plaintiff and your ability to take on that role.Although you won't incur any out-of-pocket attorney's fees or other legal expenses, being the lead plaintiff in a class action lawsuit requires you to invest a significant amount of time and effort because you must work closely with the attorneys and appear in court.
However, in recognition of this additional time and effort, you may be entitled to a slightly larger portion of the award than you would be otherwise.
You also have the benefit of getting your money before anyone else in the class does. , You will initiate your lawsuit by filing the complaint with the clerk of the federal district court that has jurisdiction over the lender.Lawsuits under the ECOA must be filed in federal court.Your attorney typically will go through the complaint with you before he or she files it with the court.
Make sure you understand all the terms in each allegation.
These are the things you will have to prove in court.
In the case of a class action lawsuit, you have the additional requirement of showing that the damage or loss of all class members happened because of a common set of facts or legal interests.
In other words, if the lender rejected you for a loan because of your race, you must be able to show that everyone in the class was rejected for a loan by the same lender because of their race.
Once your complaint is filed, your attorney will begin the process of having the complaint legally served on the lender, typically by having it hand-delivered by a sheriff's deputy. , After the lender is served with your lawsuit, it has 21 days to file an answer or other response to your allegations.Don't be surprised if the lender files a motion to dismiss in response to your lawsuit.
This is a standard litigation defense tactic and doesn't mean you don't have a viable claim against the lender.
Even if no motion to dismiss is filed, expect the lender's answer to deny most if not all of the allegations set forth in your complaint.
This response doesn't necessarily mean the lender is saying the allegation is untrue – rather, it means you have to prove that allegation at trial. , If you've decided to file a class action lawsuit, you'll need to have the judge certify your class of plaintiffs.The judge will schedule a hearing on your motion.
If you've elected to be the lead plaintiff, you will be expected to attend this hearing.
Keep in mind that if the judge certifies your class, it doesn't necessarily mean that the lender is liable for the class's damages.
It merely means that you've provided sufficient evidence that all of you suffered similar damages for similar reasons.
You must additionally prove that a class action is the most efficient way to resolve the issues in the case.
In most cases, 40 or more plaintiffs with similar experiences will be a sufficient number of potential plaintiffs to justify a class action lawsuit. , Once faced with your lawsuit, the lender typically will make an offer to settle the claim rather than proceed to trial.In the case of a class action, often the defendant lender will become truly interested in settling your claim after the judge certifies the class.
Although your attorney may advise you on whether to accept or reject a settlement offer, the choice is entirely yours.
If you are the lead plaintiff in a class action, you must make the choice of whether to accept a settlement offer on behalf of all of the members of the class, including members who may not yet have been identified.
About the Author
Timothy Carter
Specializes in breaking down complex lifestyle topics into simple steps.
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