Frequently Asked Debt Collection and Credit Reporting Questions

Does Alabama have any laws or statutes to protect consumers against unfair, illegal and even unethical debt collection practices?

The Code of Alabama includes a myriad of rules and statutes. Most consumers will want to review Title 6: Civil Practice; Title 7: Commercial Code; Title 8: Commercial Law and Consumer Protection. Review the Code of Alabama

What steps should I take to protect myself when contacted by a debt collection attoreny or bill collector?

Please see my article "How to Not Pay Your Debt or Beat a Collection Suit:

Are there any laws that protect me from unlawful collection practices?

Yes and it called the Fair Debt Collection Practices Act. It offers many protections against things such as calls after 9:00 p.m. or before 8:00 a.m., without your consent; foul or obscene language; misleading or exaggerated collection letters; continued collection efforts, after you have written for them to stop and several more specific protections that you can review here. Unlawful Collection Practices Checklist

For a complete review of the Fair Debt Collection Practices Act, visit fair-debt-collection.com

Isn't there a Statute of Limitations on collecting debts?

Yes there is but it's state-specific. For instance, the deadline for collecting debts on a written contract is 6 years in Alabama but it's 10 years in Illinois. See my listing: Statute of Limitations for written contracts and Promissory Notes

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Do you have a legal reference I can look up to determine what the Statute of Limitations for credit card debt in Alabama?

The Code of Alabama includes a myriad of rules and statutes. Most consumers will want to review Title 6: Civil Practice; Title 7: Commercial Code; Title 8: Commercial Law and Consumer Protection. Review the Code of Alabama here... http://alisdb.legislature.state.al.us/acas/CodeOfAlabama/1975/coatoc.htm

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What is a "Charged-Off" debt? What does it mean fo

Creditors typically write off or charge off a debt if there has been no payment on the account for more than six months. This does not, however, mean that the person no longer owes the debt. A charge-off is an accounting procedure used by the creditor where an uncollectable debt or charge-off is reported as a loss for the creditor. The creditor can and often does attempt to collect the debt long after it has been charged off with either an in-house collection program or more commonly with a third-party debt collection service. Sometimes a creditor will accept a partial payment of the debt and the account will be reported as "settled charge-off." Debtors may contact the creditor to make arrangements to pay the debt. A "settled" charge-off is better for a debtor's credit report. Often, it does not help a debtors credit report to pay a charged off debt when that payment is being made to a subsequent purchaser of debt. That's a discussion for another day, please look for future postings. Andy Nelms

Statute of Limitations

Every state has laws governing the time in which a creditor can file suit to collect a debt. Generally, a creditor or debt collector gives up his right to file suit to collect a debt after a period of six years from the time the debt was written off (or the date of last activity on your credit report), but various states allow anywhere from 2 to 15 years to collect delinquent debt. Generally, collectors cannot pursue debts past the statute of limitations. You need to be careful to make sure that "some" form of payment has not been made by you over the last six years. Once any form of payment or sometimes a promise to pay is made the statute of limitation begins to "re-start". So, if a payment is made in year two after the debt is placed in collections, then the statute of limitations would re-start, such that, another six years would begin. If in fact no such payment has been made over the last six years you should be able to have the case dismissed pursuant to a defense of the statute of limitations. The Statute of Limitations is one of the few absolute bars to recovery for a collector and is certainly the most effective in stopping a collections suit." See this page on my site for a listing of each state's statutes of limitation. http://www.attorney-in-alabama.com/statute-of-limitations.html

What is a "Debt Verification?" Can you explain exactly what I should expect to get back from the debt collector after I send the FDCPA debt verification request letter? What's considered legally sufficient?

Section 809(b) requires that, if the consumer disputes the debt or requests identification of the original creditor in writing, the collector must cease collection efforts until he verifies the debt and mails a response. Section 809(c) states that a consumer's failure to dispute the validity of a debt under this section may not be interpreted by a court as an admission of liability. Pre-notice collection. A debt collector need not cease normal collection activities within the consumer's 30-day period to give notice of a dispute until he receives a notice from the consumer. An attorney debt collector may take legal action within 30 days of sending the notice, regardless of whether the consumer disputes the debt. If the consumer disputes the debt, the attorney may still take legal action but must cease collection efforts until verification is obtained and mailed to the consumer. A debt collector may report a debt to a credit bureau within the 30-day notice period, before he receives a request for validation or a dispute notice from the consumer.

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