Question: What does it mean that the credit card lawsuit against me was dismissed without prejudice? Is this better than with prejudice?
In California Superior Court, a plaintiff may request dismissal of the debt collection lawsuit or any of the defendants at any time, up until the moment that the court enters a judgment, following presentation of evidence of the case.
Defendants in a lawsuit prefer that a dismissal state that it was with prejudice, because that means that the claims (the underlying credit card debt) in the case cannot be filed in another case. However, unless the creditor or debt collector settled the debt, it is unlikely that they would intentionally dismiss their credit card case without prejudice. To get the case dismissed with prejudice usually requires some type of agreement between the parties.
Without prejudice means that the claims can be refiled. Dismissal would happen when a creditor, such as FIA Card Services or Capital One Bank, files a credit card lawsuit in its own name, then decides that it does not want to pursue the case to trial. There are many reasons why this may occur, such as its witness is not available for trial or they believe the debt is uncollectible or were unable trying to locate the defendant for service. The creditor dismisses without prejudice and sells the debt to a debt collection agency, referred to as a debt buyer.
If dismissed by the creditor without prejudice, then a debt buyer may file a debt collection lawsuit under its own name.