How to Take Legal Action Against a Lender

Lax lending policies lead to a number of problems, including more people defaulting on questionable loans. These lenders become the target for lawsuits if it's provable that they engaged in any type of neglect or misconduct. If you plan to take legal action against your small business lender, you must prepare yourself for a potentially lengthy battle.

Instructions

Difficulty: Moderate

1. Review the current climate toward lawsuits. Courts have in the past sided with lenders, but new cases are changing that trend. Lenders have a legal responsibility to act in good faith during the process, and judges are beginning to view that responsibility with a harsher eye. Check out the legal cases with circumstances similar to yours to help gauge whether you have a case.
2. Gather your paperwork. One of the key reasons people can take legal action and win is because they have erroneous paperwork. Some of the major concerns are lenders getting paid twice and not disclosing that information, and failure to give all loan documents to borrowers.
3. Create a timeline. Write down when you received your loan and how the process worked. Include any conversations in any format that you had with your lender. If you're behind on your loan, write down the name of people you speak to about the loan and what they say.
4. Consult an attorney. Bankruptcy attorneys often deal with legal action against lenders, but other types of attorneys take these cases as well. In this case, a business attorney may be a more viable option. Bring your documentation to an attorney for a consultation about your case.