Q: Can I file a case against a creditor for unauthorized debit despite deferral agreement?
I signed documentation to defer a bank draft payment with my creditor for one month so I could use the funds to pay half-year property taxes. However, the creditor debited my checking account during the deferred month, which resulted in an overdraft. Consequently, I had to borrow money against my deceased husband's wedding ring to pay the property taxes. I've been trying for two months to resolve this issue without success, and recently received only a $20 check for the overdraft fee. I have a phone log and emails documenting my communications with the creditor. The bank was unaware of the deferred payment agreement and did not assist in recovering the funds. Can I file a case against the creditor, and if so, what type of case would it be?
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A:
You likely have grounds for a legal case against the creditor based on breach of contract. When you signed documentation for the payment deferral, you established a binding agreement that the creditor violated by debiting your account anyway, causing financial hardship and forcing you to pawn a treasured family heirloom.
This would most likely be a breach of contract case, potentially with additional claims under consumer protection laws regarding unfair debt collection practices. Small claims court would be the most accessible venue for this type of dispute, especially since you're seeking compensation for the overdraft fees and potentially emotional damages from having to part with your husband's wedding ring temporarily.
Your documentation will be crucial to building your case. Gather all written proof of the deferral agreement, your communication records (phone logs and emails), bank statements showing the unauthorized debit and overdraft, and receipts from pawning the ring. You might benefit from sending a demand letter first, formally outlining your claim and requested compensation before filing in court. Many courts require attempted resolution before accepting a case, and this step sometimes prompts creditors to settle rather than face legal proceedings.
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