Credit Damage Blog

Special damages for credit injury can add great value to a case. Knowing that damages are available for loss of credit capacity and diminished credit expectancy might lead to inclusion of a claim for credit damages as a routine matter. Just as wage loss or reduced earning capacity are not routinely part of every legal action, credit damages must be alleged only when appropriate.

Let’s look at situations where it would be inappropriate to include a claim for credit damage. There are two important scenarios. The first instance is where credit damage is self-inflicted, not the result of the wrongful action of another. The second is where credit damage may exist, but it is too small to make a significant impact on the value of a case..

Self-inflicted credit damage is readily apparent in most cases. Credit damaged as the result of poor budgeting or poor planning is self-inflicted. Inability to meet credit obligations because of overextending is self-inflicted. It is true, the credit industry deluges us with sweet sounding offers for credit. It is not the fault of the industry that we accept those offers and then find ourselves in unsolvable debt.

The more complicated scenario occurs when the wrongful act of another causes injuries. An apparent example is the automobile accident where the injured person is unable to work and loses income. Credit damages appear certain on the face of it. It is important in this situation to ascertain credit history. If the history shows that prior to the injury credit obligations were not being timely met, credit damage could not be the fault of another. The credit damage was self-inflicted.

The second scenario where it may be unwise to seek credit damage is where the impact on credit is small. Georg Finder, the preeminent expert in the field, writes, “My policy is to accept any case only if I affect the value of fair compensation by at least $30,000.” The same automobile accident occurred. Physical injuries were sufficiently minimal that missed work and lost wages were relatively small. There was some difficulty meeting credit obligations, and agreements were made with creditors to temporarily make payments covering only interest. After returning to work, credit obligations were again made. In this case there would be little, if any, measurable credit damage.

Another scenario is that of the victim who has little credit history and credit damages are minimal. A judgement call has to be made to determine whether to pursue a claim. If it appears that the cost of the expert who will determine the value of the damages will be greater than the damages themselves it is probably prudent to forego the claim. Georg Finder will not accept a case if he cannot improve its value by $30,000. That alone is a consideration in determining whether to pursue a smaller credit damage claim.

The injured person need not have perfect credit in order to qualify for credit damages. If it can be documented that the person has credit, although less than perfect, and that credit is diminished as a result of the wrong of another, a case for credit damages can be made. The critical inquiry is whether the injured person’s credit status was changed detrimentally as the result of the wrongful act of another. An injured person might have substantial credit damages even without perfect credit at the time of injury.

A tool which is available to assist in determining the value of credit damages is the Case Qualifying Profile made available by Georg Finder. The Profile can be found at www.creditdamage.com/case_profile.html.

If you want to know more about whether to pursue a credit damage claim, please see www.creditdamage.com.