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State Laws Governing Debt Collection

Mike — Sat, 03 Oct 2009 20:01:11 +0000

There are laws that protect consumers from unfair debt collection practices. There are the Federal laws such as the FDCPA, or the Fair Debt Collections Practices Act, which is enforced by the Federal Trade Commission and in addition to the Federal laws each state also has their own laws regulating debt collection and collection agencies. Here are some links to the state websites that can give you further information regarding debt collection for your specific state.

Note: A few of the states are not online.

Alabama
Code of Alabama Title 40, Chapter 12, Section 80 (40-12-80)

Alaska
Alaska Statute Title 45, Chapter 50, Section 471 (45-50-471)

Arizona
Arizona Administrative Code, Title 20, Article 15 – Collection agencies, operations
Title 32, Chapter 9 – Collection agency, licensing

Arkansas
Arkansas Code Title 17, Chapter 24, Section 203 (17-24-203)

California
Attorney General’s Collection Agencies Guide
California Civil Code Section 1788, et seq.

Department of Consumer Affairs Guide
What to Do If You Receive a Demand for Payment from a Creditor or Debt Collection Agency www.dca.ca.gov/legal/dc_1.pdf

Summary of the Fair Debt Collection Practices Statutes, covers both federal and California state laws www.dca.ca.gov/legal/dc_2.pdf

Colorado
Collection Agencies and Debt Collection

Florida
Florida Statute Title 33, Chapter 559, Part VI, (33-559.552, et seq.)

Georgia
Official Code of George Title 7-3, Section 25 (7-3-25)

Hawaii
Revised Statutes, Vol. 14, Chapter 708, Section 8105 (37-708-8105)

Idaho
Title 26, Chapter 22

Consumer Protection Manual
http://www2.state.id.us/ag/consumer/manuals/ConsumerProtectionManual.pdf

Illinois
Illinois Compiled Statute, Chapter 225, Section 425

Indiana
Indiana Code Title 25, Article11

Fair Debt Collection Guide
www.in.gov/dfi/education/pdfs/debtcolpdf.pdf

Iowa
Iowa Attorney General’s Guide to Debt Collection
Iowa State Code Sections 537.7103(1) – 7103(6)

Louisiana
Louisiana Revised Statute Title 47, Section 1516 and 1516.1

Maine
Maine Revised Statute, Title 32, Chapter 109-A

Maryland
Dealing with Debt Collectors Guide

Massachusetts
Guide to Fair Debt Collectionwww.ago.state.ma.us/filelibrary/fairdebt.pdf Mass. General Law, Part 1, Title XV, Chapter 93, Sections 24-28 & Section 49
http://www.state.ma.us/legis/laws/mgl/index.htm

Code of Massachusettes Regulations, 940 CMR 7
www.lawlib.state.ma.us/cmr.html

Guide to Fair Debt Collection
www.ago.state.ma.us/filelibrary/fairdebt.pdf

Michigan
Michigan Compiled Law, Chapter 445, Act 70 of 1981

Minnesota
Minnesota Statute Chapter 332, Section 37 (332.37)

Missouri
Missouri Annotated Statute Title 27, Chapter 425

New Hampshire
New Hampshire Revised Statute, Title XXXI, Chapter 358-C (358-C:1)

New Mexico
Annotated Code of New Mexico, Chapter 61, Article 18A (61-18A)

New York City
Debt Collection Guide

New York State
When Debt Collectors Cross the Line

Debt Collectors: Consumer Rights and Obligations www.consumer.state.ny.us/pdf/debt_collectors_final.pdf

North Carolina
North Carolina General Statute, Chapter 75, Article 2, Section 75-50, et seq.

Ohio
Ohio Revised Code, Title 13, Chapter 1319

Oklahoma
Oklahoma Statute, Title 15, Chapter 20,Section 755.1 and Title 59, Chapter 47, Section 3107

Oregon
Oregon Revised Statute, Chapter 646, Section 646.639 et seq.

Pennsylvania
PA Debt Collection Practices
Pennsylvania Statute, Title 73, Chapter 42 (73 P.S. § 2270.1)

Tennessee
Tennessee State Statutes Regulating Debt Collection

Texas
Texas Statute, Finance Code, Title 5, Chapter 392

Utah
Utah Annotated Code, Title 12, Chapter 1

Washington State
How to Deal with Your Debts
Revised Code of Washington, Title 19, Chapter 16

West Virginia
What Are My Rights as a Consumer with Debts in Collection? Guide
West Virginia Code, Chapter 47, Article 16 et seq.

Wisconsin
Wisconsin Statute, Chapter 427

Wyoming
Wyoming Statute, Title 33, Chapter 11

Prohibited Collection Practices
www.audit.state.wy.us/banking/cab/cab_brochure.pdf

You have rights as a consumer, even when you fall behind on your payments. Know your rights when it comes to debt collectors and collection agencies.

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Tips For Dealing With Debt Collectors

Mike — Tue, 29 Sep 2009 23:10:05 +0000

It is not necessary for you to deal with debt collectors if you are a consumer. You have the right to halt communications with them. However, you may want to deal with them so that they will remove the negative listings on your credit but keep in mind that you can also deal directly with the original creditor.

If you do not want to work with a debt collector you should avoid the phone. Do not speak to them over the phone, just politely inform them that you want to have everything in writing and then hang up. If they continue to call you can send them a “cease and desist” letter.

Be informed of your rights. You can read about the Fair Debt Collection Practices Act or the FDCPA at the Federal Trade Commission (FTC) website. This law prohibits debt collectors from using unfair, abusive or deceptive practices in order to collect a debt from you. It also specifies when they can call and what kind of information they must give to you.

If you do speak with them on the phone either keep meticulous records or better yet, record the conversation. In thirty-five of the fifty states and the District of Columbia is lawful to secretly tape your phone conversations. In the other 15 states you can tape so long as you have the permission of the other party. If you inform them that you are recording and they continue talking that is considered to be implied permission.

Under the FDCPA, as a consumer you have the right to “debt validation” from a collection agency. This is validation from the creditor that the account belongs to you and that the balances and terms of the loan are all accurate. You do not have this same right with an original creditor.

In addition to the FDCPA, which protects a consumer in the United States, each state also has its own statutes and laws that govern collection agencies and debt collections. Find out about the laws in your own state.

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Debt Validation And Collection Agencies

Mike — Tue, 29 Sep 2009 23:06:03 +0000

Under the FDCPA or the Fair Debt Collections Practices Act, you have the right to “debt validation”. This is a demand from the collection agency and the original creditor that the debt is really your responsibility and that the balances, terms of the loan and any other pertinent information is correct and accurate. A collection agency must also provide proof that they have the legal right to attempt to collect the debt.

If you provide a written request (and always make sure that you keep a copy and mail it via Certified Mail Return Receipt Requested) the collection agency must halt all collection activity until they have supplied the appropriate validation.

Occasionally a collection agency will stop all collection activities and give the account back to the original creditor for collection rather than provide validation.

A collection agency is not required to supply the validation, however, they must do so if they intend to continue to try to collect the debt. If you have any disputes with the debt you have the right to dispute it directly with the original creditor.

If you demand validation from a creditor who has already listed a negative on your credit report, they are required to note that the account is “disputed by consumer”. They cannot make a new listing or change or verify a current listing until they have provided you with the validation that you requested.

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FICO Score Changes For 2009

Mike — Fri, 25 Sep 2009 19:59:45 +0000

There have been some recent changes to the FICO credit scoring system. These are the biggest changes since 1989 and it is estimated that these changes could cause as many as 40% to 50% of all scores to go up or down by as much as 20 points. That could mean the difference between getting approved for a loan and getting denied, especially in the current economy and credit crunch.

One of the most positive changes to be made with FICO scoring is the fact that a single late payment will not damage your credit rating as much as it used to. The scoring algorithm will take into account your late payments and your score will be affected on a sliding scale. One late payment will not affect your score too much but being habitually late will greatly affect your score.

Another issue that has been addressed is that of “piggybacking”. Piggybacking is when a person becomes an authorized user on someone else’s credit card accounts, thereby allowing them to establish some credit with the help of someone else. Piggybacking is still authorized with the new credit scoring system, however, the new system has some elements in place that will make it more difficult take a longer time to establish credit.

For creditors, the new FICO score is purported to be able to reduce the risk of delinquencies and improve the predictability of defaults by 5% to 15%. The recent downturn in the economy has created more delinquent credit accounts than at anytime since 1992, when the country was also in a recession.

Credit scores are also becoming increasingly important for consumers. Right now they are being used for typical and expected uses of applying for credit, but in addition some insurance companies are now using them for underwriting purposes. There are also increasingly more employers that are starting to use credit scores in their hiring processes.

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