Debt Collection

Debt Collection

Debt Collectors Will Soon Be Reaching Consumers via Text and Social Media

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Debt collectors will soon have another way to reach consumers. The Consumer Financial Protection Bureau (CFPB) released a ruling outlining how collectors will soon be able to reach consumers via text messaging and social media.  The federal government has cleared the way for collection agencies to send unlimited texts, emails and even instant messages on social media platforms. 

Debt collectors will be required to include instructions on how to opt out of these messages within the text of the communication. The CFPB will also limit collectors to calling consumers to seven calls per week per debt.  

Credit Card Debt, Debt Collection

Debt Does Expire- Here’s Why You Shouldn’t Wait for the Clock to Run Out

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At some point, consumer debt is so old that it is no longer legally collectible. At this point, the debt is said to be past the statute of limitations, meaning no creditor or debt collector can take the consumer to court to collect on the debt. However, even though creditors cannot collect on debt past a certain time period, it does not mean this is the best strategy for consumers to seek in cancellation of this debt.  

Every state has a set of laws that govern how long a party has to pursue a legal cause of action. After the timeline has passed, the individual can no longer file a lawsuit. For debt collection, the statute of limitation hinges on the type of debt. In Florida, the statute of limitations for debts involving written contracts, such as personal loans, is five years. The statute of limitations is four years for debts that stem from oral contracts or revolving accounts, the most common of these being credit card debt. After that point, the creditor is not able to legally collect on the debt. 

Debt Collection

State and Federal Agencies Teaming Up to Combat Illegal Debt Collection

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Debt collection is a profitable business in the U.S., but not all debt collectors follow legitimate, legal collection practices. According to officials from the Federal Trade Commission (FTC), most consumer complaints made annually involve illegal debt collection practices, which is why they have made recent efforts to crack down on these types of tactics. 

In response, the FTC has launched a multi-agency campaign called “Operation Corrupt Collector.” This crackdown campaign focuses on educating consumers on how to identify illegal debt-collection practices, as well as enforcement against debt collectors who are found to be breaking the law.  

Debt Collection

Can a Creditor Come After Money that is Gifted?

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The law allows for a certain amount of money to be gifted to individuals with no tax consequences on an annual basis. For the 2020 tax year, the gift tax exclusion amount is $15,000. Many aging parents take advantage of this exclusion to reduce their probate estate and avoid tax penalties by gifting up to this amount to their adult children annually. However, if the adult child they are gifting this money to has his or her own financial struggles and is being pursued for creditors, that money could be fair game. 

The problem is that this money is not protected if the receiving party is being pursued by a creditor for an outstanding debt. If the debt is valid and still legally collectible, money that is gifted to the consumer is reachable for purposes of satisfying what is owed.   

Debt Collection

How to Avoid Resetting the Clock on Old Debt

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Once a debt is past a certain age, collecting on that debt through legal channels is barred under Florida’s statute of limitation laws. However, if the person owing the debt is not careful, the debt can be reset, making the amount owed legally collectible once more. Knowing what to do to prevent that from happening is important for this reason.

Understanding the Statute of Limitations

Every state has a set of laws that governs how long a person or entity has to bring a legal claim on any given issue, including debt collection. If a claim is brought after that period has passed, the claim will likely be barred. When it comes to debt collection, this timeline is five years from the date the debt began for written contracts, including personal loans. If the debt is one with a revolving account, including credit card debt, the statute of limitations is four years.

Debt Collection, Debt Relief

How to Work with Debt Collectors When You Are Not Able to Pay

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Dealing with debt collectors is stressful, especially when the person owing the debt simply does not have the financial resources to pay. It can be easy to fall behind on bills, and before too long, the consumer will find himself or herself juggling countless collection calls. These calls are not always pleasant. After all, the debt collectors have one job to do and that job is to receive payment on the debt. What is the best way to deal with debt collectors when an individual is not able to come up with the payment?

Stay Calm and Attempt to Work with the Collector

Debt collectors have a reputation of being aggressive when performing their jobs. However, it is important to stay as calm as possible when communicating with a debt collector. If a consumer agrees that he or she owes the debt and does not have the resources to do so, it may still be beneficial to at least attempt to work with the debt collector on paying on the debt. If the person does not have the money but still wants to pay, the collector may mark the consumer down as “refused to pay.” However, do not fear this label. It is essentially meaningless in the collection process. It does not make the collection case against consumer any worse or any better.

Debt Collection

Facing Debt Collection? Know Your Rights.

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When someone is facing debt collection, it is important that person knows his or her rights.  The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers against unfair collection practices, including:

  • Calling you repeatedly to annoy or harass you;
  • Trying to collect more than you owe;
  • Failing to send a written notice of the debt;
  • Threatening violence, using profanity or offensive language;
  • Threatening dire consequences (i.e. – lawsuits, criminal prosecution, wage garnishment, jail time, permanently ruining your credit);
  • Calling you before 8 a.m. or after 9 p.m.;
  • Revealing debt to third parties (i.e. – family, neighbors, friends, co-workers, etc.);
  • Contacting you at your work, after you have requested them to stop;
  • Failing to verify disputed debts;
  • Ignoring cease communication requests.
Debt Collection, Debt Relief

Stopping a Wage Garnishment Once It Has Started

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When dealing with a collection on a debt, the last thing a consumer wants is to face a garnishment of his or her wages to satisfy the debt. Many times, once the wage garnishment process has started, consumers fear that it is too late to do anything to stop it. It can be stopped, however, with quick action and the right steps taken.

Contact an Attorney.

The laws surrounding how to properly object to a wage garnishment can be complicated, and unless the individual is savvy with the legal system, costly mistakes can be made. Even if the person’s wages have already been garnished, consulting with an attorney is still advisable. The key is to act quickly since the law only allows a short window of time for a person to object to a legal proceeding.

Debt Collection, student loan debt, Student Loans

How the Supreme Court’s Recent Decision Affects Student Loan Debt Collection

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A recent U.S. Supreme Court decision has implications for how student loan debts will be collected.  This week, the court issued a 6-3 ruling that debt collectors collecting on government-owned debts cannot do so by robocalling mobile devices.

The ruling came from Barr v. American Association of Political Consultants, a case involving a 1991 law banning the federal government from using robocalls to collect on debts. Specifically, the case was brought after a 2015 revision was made by Congress to the 1991 that allowed a distinct group of creditors to collect on government-owned debts, including defaulted federal student loans.