They say time flies when you are having fun. However, what happens when time flies and the fun ends? This can happen to consumers that forget about an outstanding debt and then one day, a creditor calls to collect what is past due. You can also receive an unexpected letter concerning a debt you forgot about a long time ago.
How do you handle a debt collector that has initiated collection actions on an old debt and more important, when should you hire an attorney to deal with the debt collector?
Federal Law Protects Debtors
Enacted by Congress in 1977, the Fair Debt Collection Practices Act (FDCPA) prohibits several actions conducted by third party debt collectors. The consumer protection law penalizes debt collectors that abuse, harass, threaten, or intimidate consumers into paying delinquent debts. Before 1977, consumers were vulnerable to unscrupulous debt collector behavior. Third party debt collectors also cannot implement deceptive practices that prompt consumers to pay off debts.
The FDCPA applies to personal debt, such as auto loans and past due credit card balances. Debt collectors must abide by FDCPA statutes in both oral and written communications, although violations of the legislation in the form of written communications are much easier for borrowers to prove in a court of law.
How the FDCPA Works with State Laws
Each state sets a statute of limitations for debt collection action. After a certain period, a third party debt collector no longer has the legal right to sue you for payment of a delinquent loan or credit card debt. For example, Georgia mandates a six-year statute of limitations for oral contracts and a four-year statute of limitations for written contracts. States also set statute of limitations for promissory notes.
When to Contact an Attorney
After an old debt passes the statute of limitations deadline set by your state, the debt collector cannot pursue collection of the debt. If you have to deal with a debt collector that threatens to sue you for collecting an expired debt, you should contact an attorney to explore legal options that put an end to the violations of the FDCPA. Even if a debt collector has contacted you to collect a debt still within your state’s statute of limitations, you should contact an attorney if the debt collector displays abusive or threatening behavior, as well as tries to trick you into paying off an outstanding debt.
Penalties for FDCPA Violations
The FDCPA clearly defines the penalties for third party debt collectors that violate the FDCPA. Statutory damages, which represent the damages assessed for breaking the federal consumer protection law, have a cap of $1,000. Actual damages cover the physical and/or emotional toll a debt collection action has on consumers. Physical damages can include the negative health consequences of living with acute fear and anxiety. The FDCPA also allows consumers to recoup any money lost from wage garnishments. Fill out our Free Case Evaluation to be connected with an attorney in your area.