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New York Appellate Court Says Statue of Limitation Has Run in Debtor-Creditor Case


In February of 2005, a man named Raqul acquired a consumer debt with AT&T. AT&T started a lien against him to recover the money that he owed to them. The address used on the lien was the address of a different person. That person was name Rachel. Their last names were also similar. The error was not caught until Rachel was informed that her college school loans were being cancelled. When she tried to find out why they were being cancelled, she was informed that she was involved in a debt procedure with AT&T. She contacted AT&T and started the process to clear her name. Unfortunately, the process to clear her debt status was lengthy. Her school loans would not be reinstated until she got the debt situation cleared up with AT&T. That meant that she had to drop out of college. Transunion, the credit reporting bureau listed the default judgment against Rachel rather than Raqul and the damage to her credit rating was devastating. As a result of Transunion erroneously damaging her credit and causing her student loan to be cancelled, Rachel started a personal injury lawsuit against them.

Rachel claims that the damage to her credit report has caused her to be denied her college education which will affect her ability to earn a living for the rest of her life. She is claiming that Transunion was negligent because they did not check to see if Raqul shared any personal identifiers with her. Transunion does not claim that the two people had the same social security numbers, dates of birth, or even the same address. They claim that the incident was just a normal human error and as soon as they were able to verify that the two persons were not the same, they removed it. Unfortunately for Rachel, it was too late to prevent her lender from denying her student loans.

The court evaluated the issue. They confirmed that Rachel did not even use AT&T, nor did she have any knowledge that Raqul existed. She did not work in concert with Raqul to defraud AT&T of any money that was owed to them. Her initial claim against the company Transunion was based on the Federal Fair Credit Reporting Act. It was dismissed because the court that reviewed it had stated that the case was filed after the statute of limitations for the offense had expired. She then filed the action through the New York State Fair Credit Reporting Act. Transunion requested that the court issue a summary judgment on their behalf dismissing the case because it was filed after the statute of limitations had expired. The court determined that in order to properly review this case, it would be necessary to examine the statute.

This cause of action was begun three years after AT&T filed their petition against Raqul. The court must determine if the statute of limitations in this case started to run at the time that the debt action was started, or if it began at the time that Rachel was notified by her loan officer that her loan had been rejected. Rachel contends that the statute of limitations should not begin to run until she was aware of the harm that was done to her.

The court also agrees that the statute of limitations could not start to run until there was an actual harm that could be adjudicated. That harm did not occur until Rachel became aware that her loan had been denied. Therefore, her case was filed in a timely fashion and summary judgment cannot be granted in favor of Transunion. The case will go forward to trial.

At Stephen Bilkis & Associates with its loan Lawyers, have convenient offices throughout New York and Metropolitan area. Our personal injury lawyers can provide you with advice to guide you through difficult situations. Without a credit attorney, you could lose precious compensation to help your family.

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