Awarding Attorney Fees in Credit Lawsuits

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When Can I Collect Attorney Fees?

Generally, U.S. law does not allow the winner of a lawsuit to collect their attorneys' fees from the loser of the law suit. The reasoning behind this is that it would stop too many potential plaintiffs with valid claims from exercising their right to have their grievances heard in a court of law. Plaintiffs would be discouraged from going to court because they would be afraid of losing.

However, in certain cases, there are statutes in place which specifically allow for attorneys' fees and punitive damages to be awarded to the plaintiff. These statues are usually put in place in order to punish someone who has committed an especially atrocious wrong against someone else.

If I Win a Credit Lawsuit Can I Collect Attorney Fees?

When it comes to credit law, there are several situations where reasonable attorneys’ fees can be awarded. For example, the Equal Credit Opportunity Act (ECOA) prohibits discrimination based on color, race, religion, national origin, sex, form of income, marital status, or age.

Discrimination can happen in two ways – either a certain type of applicant is denied credit, or the applicant (e.g., low to middle income) is targeted for credit at sky-high rates. In either case, the creditor’s conduct is a public wrong. Thus, attorneys' fees will be awarded to the injured plaintiff in order to compensate him for the creditor's wrong.

There is also the federal Consumer Credit Protection Act (CCPA), which includes the Truth in Lending Act, the Consumer Leasing Act, the Fair Credit Reporting Act, and others. These acts prohibit unfair, fraudulent, predatory, and discriminatory practices by creditors. As these acts are crimes against the public, courts have the discretion to decide whether these creditors should be punished further by making the creditors pay for the winner's legal fees.

There are often state statutes, similar to the federal statutes discussed above, that allow for the recovery of reasonable attorneys' fees. For example, similar provisions can be found in the Massachusetts Civil Rights Act and the California Song-Beverly Credit Card Act.

Another way attorneys’ fees can be recovered in credit cases is if the contract you are suing over had a clause stating that recovery of attorneys' fees is allowed. In some states, a credit application itself can constitute an enforceable contract for purposes of attorney fees. However, theses clauses usually benefit the lender/seller rather than the borrower/buyer, especially in credit discrimination cases.

Do I Need an Attorney?

If you are being sued by a creditor or if you feel you have been wronged by one, it is important that you contact an attorney. An attorney will be able to help you draw up a defense, inform you of your options, and even can help bring your case to court. If your case involves discrimination or something else federal or your state law provides statutory damages for, you might even be able to get your opponent to pay for your attorneys' fees and court costs.

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Last Modified: 04-22-2014 04:49 PM PDT

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