When you borrow money, you are in a precarious position vis-a-vis your lender, which makes consulting with a business attorney in New Jersey a wise move. The simple fact is that lenders have the financial resources you need to survive in this competitive society. Since you, as is true of most people, probably do not have large capital reserves to start a business, repair a home or send a kid to an elite college, you will often have to borrow money. In most cases, things will go well for you. As planned, the lender will do as they should, allowing you to pay off the loan and get on with life. On the other hand, there are some lenders who try to game the system. They will take advantage of your financial dependence on them in an unethical manner. It is then that you should retain a commercial litigation lawyer experienced in lender liability law.
What Is Lender Liability Law?
Lender liability law is a legal specialization concerned with providing protection to borrowers. The legal bar established this field during the 1980s to even the playing field between lenders and borrowers. When you owe money to a bank, lender liability laws provide a means for you to file a damage claim for unethical lending practices. Moreover, you can use this case law to avoid paying back unscrupulous loans.
Lenders Must Act in Good Faith
The underlying principle behind lender liability law is that your bank must act in good faith. Even if the loan proves beneficial to you, the lender cannot mislead you about terms. If they do, then you have a possible lender liability claim. Courts are particularly troubled with lender actions during dire economic times. For example, there are many banks that begin to express concern behind closed doors about the ability of their borrowers to make payments. Knowing that you, as an individual or business, might want more money to handle your affairs, the bank might entice you with the promise of extended credit. Of course, they will want you to first pay off the current balance. However, after you make the payment, the bank might then cut off your account altogether, proving they never intended to provide the discussed larger loan. Fortunately, in such cases, your business attorney in New Jersey can file a lender liability suit to seek financial redress.
Your lender must also provide enough notice about its decisions to allow you to make alternative arrangements. Some lending institutions implore businesses to put up their entire assets as collateral. Doing so is common among individual entrepreneurs trying to survive in a tough economic climate. These small businesses trust that their lenders will act in good faith by extending additional credit allowing for growth. Unfortunately, some banks will cut off your credit line without informing you of this decision until well after the fact. You may have bought new property, paid for equipment or extended workers their holiday bonuses. Now, you might not have enough cash on hand to open the next day. Lender liability law will provide an avenue for you to sue for damages. If the lender had only informed you earlier of their decision to dissolve the arrangement, you would have handled your business affairs differently. Your New Jersey litigation lawyer will know the relevant case law to use in court to force the lender to pay for its malfeasance.
Contact a Commercial Litigation Lawyer Today
It is important to speak with an experienced commercial litigation lawyer, such as one at Snellings Law LLC, at (973) 265-6100, if you are the victim of an unethical lender.