Can a creditor sue a debtor for fraud? Or if it's fraud, does the prosecutor do it? In other words, is this a purely civil matter or a criminal matter? Example, over stating income on a credit card application. If the debtor is found guilty, is a judgement is then recorded as the same as any other suit. What if the debtor is collection proof?
In other words, what's the difference between being sued for Fraud or being sued for non-payment?
If you've been sued, hire a lawyer to defend you.
Civil fraud is a "tort," and yes, any lawyer can pursue a civil fraud claim. There is also criminal fraud that the DA would prosecute, but that's not what's going on here.
Breach of contract/non-payment of debt is just breach of contract.
Torts expose you to puntiive damages, to punish you, as well as compensatory damages, to make the creditor whole. Torts are not dischargeable in bankruptcy, which can be an effective defense. Breach of contract damages are just compensatory, and can be discharged in bankrupcty.
If the debtor is judgment proof now, that doesn't mean they always will be, and judgments are good in WA for 10 years, and they're renewable for 10 more years.
Disclaimer: I'm only licensed in CA. Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
Personal Injury Lawyer
There is a criminal statute prohibiting fraud in WA:
RCW 9.38.010 False representation concerning credit. Every person who, with intent thereby to obtain credit or financial rating, shall wilfully make any false statement in writing of his assets or liabilities to any person with whom he may be either actually or prospectively engaged in any business transaction or to any commercial agency or other person engaged in the business of collecting or disseminating information concerning financial or commercial ratings, shall be guilty of a misdemeanor. [1909 c 249 § 368; RRS § 2620.]
There is also a civil cause of action, the elements of which are as follows:
The essential elements of fraud are:
(1) A representation of an existing fact;
(2) Its materiality;
(3) Its falsity;
(4) The speaker's knowledge of its falsity;
(5) His intent that it shall be acted upon by the person
to whom it is made;
(6) Ignorance of its falsity on the part of the person to
whom the representation is addressed;
(7) The latter's reliance on the truth of the
(8) His right to rely upon it; and
(9) His consequent damage.
HOUSEHOLD FINANCE CORPORATION OF SEATTLE, Appellant, v. HARVEY E. WILLIAMS et al., Respondents, 66 Wn.2d 183, 185 (1965).
Civil fraud is usually invoked when people are trying to rescind contracts. Perhaps the plaintiff is merely trying to make it sound bad for you. If you haven't heard from a prosecutor or the police, then there are probably no criminal charges against you (yet). So the result of your creditor's suit might be a money judgment, but those are often difficult to collect. Essentially, there might not be any practical difference for you between being sued for fraud or being sued for non-payment.
[If this information has been helpful, please indicate below by pointing and clicking on the "thumbs up" symbol. Please note: I'm only licensed to practice law in the State of Washington. This communication does not constitute legal advice, nor does it form an attorney-client relationship.]