A dismissal without prejudice of a credit card lawsuit means the credit card debt collector can bring the lawsuit again. A dismissal with prejudice of a credit card lawsuit means the credit card debt collector cannot refile the lawsuit. In short, a dismissal with prejudice means the Defendant wins, while a dismissal without prejudice just delays a case.

What is the law on this?

Georgia’ Civil Practice Act outlines the rules for dismissals in O.C.G.A. § 9-11-41. A Plaintiff can dismiss at any time voluntarily before the first witness is sworn in.

If a Defendant has filed counterclaims, Plaintiff’s dismissal of their claims will not dismiss the lawsuit—the counterclaims will remain. If a lawsuit cannot be dismissed in a way that allows the counterclaims to remain, then the lawsuit cannot be dismissed without the consent of both parties.

Remember, magistrate courts do not follow the rules of Georgia’s Civil Practice Act. However, they can rely on those rules to inform how they operate. My experience is that Magistrate Courts do follow these the Civil Practice Act when it comes to these dismissals.

Do cases get dismissed before trial by debt collectors?

Yes. This is a common tactic of debt collection law firms. When a Defendant files an Answer—through an attorney or pro se—then many cases are dismissed without prejudice prior to trial. This is often done the day before trial.

This happened to me recently in a case in middle Georgia. The debt collector’s law firm faxed in a voluntary dismissal without prejudice at 3:15 PM the day before trial. They did not provide my client notice. (I had not entered my appearance so they did not know about me yet.)

We were able to get the court to change the dismissal to one with prejudice. My client had filed a good pro se Answer and this saved us in this case.

So how can I protect myself against dismissals without prejudice?

My client and I were fortunate down in middle Georgia in our case. The other side might still appeal, but for now she is protected against the refiling of the lawsuit.

The only way to ensure you can avoid a dismissal without prejudice is to file a counterclaim. You must be careful about this, however. Filing a frivolous claim can be worse than filing no claim at all. You can end up owing attorney fees and court costs to the other side.

Common grounds for counterclaims are violations of the Fair Debt Collection Practices Act and the Truth In Lending Act.

Is it bad to have a dismissal without prejudice?

No, a dismissal is still a dismissal. While it is not complete closure on the matter, in many cases credit card debt collectors will not refile a credit card lawsuit they have dismissed.

So if you do end up with a dismissal without prejudice in a case you prepared to defend then it is not the end of the world. For the time being, you have won and they have lost. They will have to pay more money to refile the lawsuit, and the statute of limitations still applies.