They also don’t want you to know that a creditor who successfully sued you for non-payment can’t use a judgment against you to continue collection efforts outside of your state. In order to transfer the verdict to another state, the process is extremely time-consuming and expensive.
Can debt be collected from another state?
Because California no longer requires agencies in the state to be licensed, I’d like to file a complaint, but I’m not sure who to contact.
In Delaware, where can I file a complaint against the FCC and the state attorney? Thank you very much for your kind words!
When it comes to dealing with debt collectors, especially those from out of state, I’d be pleased to assist you.
What kind of debt are you talking about? Credit card debt, auto loan, personal loan or something else? You haven’t specified what it is. And you failed to disclose the debt’s age.
Despite this, I get a lot of inquires on this subject matter. Since this is something I’ve researched extensively, I’d want to share some of my findings with you.
You are correct in thinking that California, where you live, does not need firms to be licensed in order to collect debts in California.
However, in more than 20 states, debt collectors are required to be licensed if they are operating in those states. One of the states where licenses are required is Delaware.
The answer to your first inquiry about whether this Delaware-based corporation can collect from you in California is: it depends. Even though a company’s headquarters or the majority of its operations are based in Delaware, this does not automatically imply that it has completed the licensing process in that state. If not, then the debt collectors are not entitled to collect on it.
The debt collector can pursue this debt, even if you live in California, if you follow the processes outlined in the above-mentioned article and discover that the collector is licensed to do so.
Just in case you’re ever contacted by another collection agency, here is a list of states (including DE) that require debt collectors to have a license: New Jersey, New York (City of Buffalo), New Mexico (including Albuquerque), North Dakota (including Grand Forks), Oregon (including Portland), Utah (including Salt Lake City), Washington (including Seattle), and West Virginia (including Charleston).
There is an online directory maintained by the National Association of Attorneys General that includes biography and contact information for each of the 56 Attorneys General in the United States of America. Beyond the United States, there are AGs for American Samoa, the District of Columbia, Guam and the Northern Mariana Islands, Puerto Rico, and the United States Virgin Islands.
The statue of limitations on a debt may have expired, therefore the age of a debt is also important. Debt collectors cannot lawfully collect on an old debt, even if the agency is properly licensed. This is because the debt is no longer legally enforceable.
Last but not least, if you feel that the debt collection agency has broken the Fair Debt Collection Practices Act, or FDCPA, and would like to file a complaint with Delaware authorities, you certainly can.
As a starting point, I’d look to the Federal Trade Commission (FTC). A Complaint Assistant is available online so that you can file a complaint against the debt collector.
As a result, you have the ability to fight back against debt collectors who are breaking the law.
So if you’d want to learn how to stop debt collectors from harassing you by sending them a Cease and Desist letter, please check out my post on the subject.
You can, of course, contact the California Attorney General’s Office. You can access their online complaint form by clicking on the link below.
Finally, if you’d like to submit a complaint with the Consumer Financial Protection Bureau, or CFPB, you can do so. At 855-411-2372 or by filling out the CFPB’s online complaint form, you can make your concerns known. You should expect a response from the firm within 15 days after submitting a complaint to the CFPB.
Okay, that’s it. My sincere apologies if this has caused you any distress in dealing with debt collectors that are too aggressive in their demands.
Can debt collectors find you if you move?
Debt collectors and creditors have a variety of ways to track you down and locate your new location.
You can check with the DVLA to see where your vehicle is registered if you’ve taken out an automobile loan. The same holds true for credit card debt, which can be easily tracked down thanks to the information on file.
Even if you move, debt collectors will still be able to track out your current address. A credit check and a registered address are likely requirements for signing up for a cell phone contract, for example.
The same is true if you receive a paycheque or benefits, which require that you have a registered address.
How do creditors find you when moving?
Your credit application information. The original creditor gives the collection agency with your credit application information. Your old employer, bank or credit references may still be able to locate you if you’ve relocated since applying for a job.
A wide range of people, including family members, friends, coworkers, and neighbors. Collection agents frequently pretend to be friends or family members when they call family members, friends, coworkers, or neighbors. Federal law, on the other hand, restricts these kinds of calls. See Illegal Debt Collection Practices for further information on what collectors can and cannot do.
Phone books You may find names, addresses, and phone numbers in phone directories. It’s possible that a collection agency that has your phone number can use a reverse directory to locate your address. In a reverse directory, phone numbers are arranged numerically rather than alphabetically.
Postal facility. The post office might have a forwarding address for the agency. Credit bureaus with their own collection agencies also obtain monthly change-of-address data from the US Postal Service.
The “temporary” address change option is recommended by some privacy advocates in order to prevent collectors from using your change of address information to find your present address. It’s possible to extend the service for up to a year, but it won’t appear as a permanent address change in postal records. Another option is to inform everyone you want about your new address, without submitting a postal change of address form. There is a chance that you will forget a business or person you want to keep in touch with, or whose invoices you want to pay on time. If you don’t receive your bills, you may fall behind on a priority account.
Department of motor vehicles for the state. As long as the creditor or collection agency is a reputable one, they can verify your residence in order to collect a debt and pursue legal action against you in most states.
Records of voter registrations. Your former county of residence may be checked by some collection agents. The registrar will have your new address if you’ve reregistered in the same county. If you’ve relocated and reregistered, your new county may have sent cancellation information to your former county, and the registrar may be able to provide this information.
Companies that provide utility services. A debt collector may be able to locate you through your energy or phone company, especially if you are still within the same service area. You may still receive your final bill even if you relocate to a new location.
How far back can a debt be chased?
There is no way to avoid paying debt collectors until either the debt is paid in its whole, you agree to a partial settlement or the obligation expires from statute of limitations.
Even when you owe less than half of what a debt collector claims you owe, it is still necessary for you to pay the debt collector the full amount in order to close the account on your credit report. They are more than ready to accept a decreased settlement amount in full in order to cancel the account, which is a good thing! Your remaining debt would be written off once you have reached an agreement and paid a settlement number.
If you want the best settlement offer, there are two schools of thinking. After a few months, some debt collectors may offer improved ‘offers,’ while others may wish to shut the account swiftly and accept a lesser settlement. Even if you settle early, the corporation may still hope that they can get you to pay a large sum of money each month in order to keep the debt collectors at bay. The collector may be considering selling the account themselves if they decide to settle later. Even if a settlement offer is rejected, don’t give up. It doesn’t mean, though, that the debt collector won’t accept the same offer at a later period when he or she is less enthusiastic.
There is a limit to how long a debt collector can pursue you in the event that you do not pay. The debt becomes’statute barred’ if you do not make any payments or acknowledge the debt in writing for six years. As a result, your creditors will be unable to take legal action against you. This isn’t true for all debts, however.
When the statue of limitations expires, the lender has no further time to collect on the loan. However, just because a debt has passed the statute of limitations doesn’t mean that it no longer exists. There is a chance that it will still be listed on your credit report, making it difficult for you to secure financing or obtain credit.
If you believe the debt is statute-barred, you should not write to the creditor. This includes texting or emailing them, as writing to them could make it appear that you have agreed to pay the debt. The statue of limitations may be extended for another six years if you do that; thus, you should not do it.
Can I sue for false debt collection?
Debt collectors and debt collection agencies may be subject to legal action if they engage in abusive, deceptive, or unfair practices. To put it simply, debt collectors are those that buy an overdue bill from a creditor that has been unsuccessful at collecting from a customer for any reason.
As a general rule, creditors prefer to get some money rather than none, and debt collectors then pursue the customer for the whole amount of what he or she owes. In the end, debt collection companies have made a financial commitment to you. In order to gain money, they must go after collections aggressively. Debt collection agencies may sometimes exceed the line into illegal action because of this temptation to be aggressive. When they do, you have the right to file a lawsuit.
What debt collectors Cannot do?
Debt collectors are prohibited from harassing or abusing their customers. Threatening you or your property illegally, threatening you with illegal activities, or falsely threatening you with actions they don’t intend to conduct are all prohibited under this policy. To further bother or harass, they can’t phone you repeatedly within a short period of time.
Debt collectors are prohibited from making false or misleading claims. Debt collection agencies are prohibited from lying about the amount of debt they are attempting to collect, and they cannot use phrases or symbols that make their communications appear to be from a court, attorney, or government agency to you.
Collection agencies are prohibited from contacting you at unsociable or inconvenient hours or locations. Generally, they will call between 8 a.m. and 9 p.m., but if those hours are difficult for you, you can request that they call at another time.
Despite the fact that debt collectors may send you notices or letters, the envelopes cannot contain any information about your debt or any information that is meant to shame you.
A debt collector can only contact you by mail or through your lawyer, or you can impose further restrictions on how they can contact you. Always request in writing, use certified mail, and retain a copy of both the letter and the return receipt. Additionally, you have the right to request that a debt collector discontinue making contact with you. If you do so, the debt collector can only contact you to affirm that it will stop contacting you and to inform you that it may file a lawsuit or take other legal action against you if you do not comply. Keep in mind that even if you request that a debt collector stop contacting you, it may still sue you and may still report your debt to credit reporting organizations, which would most certainly harm your credit score.
See Debt Collector Contacting Your Employer or Other People for details on when debt collectors can contact your employer or other people.
Does a debt collector have to show proof of debt?
You can demand proof of a debt from a debt collector. Credit collection rules can be confusing, so be sure to familiarize yourself with them.
Understand What Debts You Owe
The first step in disputing a debt that isn’t yours is to make sure that you have all of the facts correct. It’s a good idea to monitor your credit report frequently. It’s easier to deal with debt collectors if you’re aware of what’s in your credit history. Free copies of your credit reports are available annually from each of the three major reporting agencies, or you can pay a monthly fee for credit monitoring services.
Getting Verification of Debts
A debt collector can demand confirmation of the debt’s authenticity, if you’re not sure if it’s yours. Request a debt validation letter if someone calls you about a debt or sends you a bill without documentation. A debt validation letter must be provided by the collection agency within five days of initial contact.
According to the Consumer Financial Protection Bureau, debt collectors must present you with specific information while attempting to collect a debt from you. Amount owed, as well as the name of the creditor, are included. The notice of your rights, including the option to dispute the debt, must also be included by the creditor. The letter of debt validation usually contains this information.
Can creditors find out where you bank?
Even if you haven’t previously paid the debtor with cash or money orders, it’s likely that the debtor already knows where you bank. A garnishment order can be served on a person’s bank account simply by looking at the bank’s name from previous checks or bank drafts.
What states do not allow bank garnishments?
Garnishment is a legal procedure used by debt collectors to seize control of your bank account.
In the event that one of your obligations is not paid, the creditors may be granted a court order to seize your bank account and withdraw the money they need to settle the debt. A garnishment is the court order itself. After a debt collector files a lawsuit against you and gets a judgment against you, the court usually issues a court order.
Debts such as credit card bills, vehicle loan repayments, personal loan repayments, medical costs, and mortgage payments could be affected.
A debt collector may also be allowed to garnish your pay in addition to a bank account. Your wages may be garnished to settle an unpaid obligation when the debt collector wins a court order to that effect.
In four states, wage garnishment for consumer debt is not permitted: North Carolina; Pennsylvania; South Carolina; and Texas. It’s still possible for debt collectors to garnish your bank account if you live in one of those states, though. As soon as your paychecks are transferred into your bank account, they’re no longer considered wages. This means debt collectors can access your account and take money—even money from your paycheck—from you.
Can a Debt Collector Take Money From Your Account Without Permission?
Court orders are typically required before creditors can access your bank account. A court order is not required for some government agencies such as the Internal Revenue Service (IRS) to gain access to bank accounts.
What states do not allow garnishment of bank accounts?
Creditors should be aware that a bank will freeze an exempt tenants by the entireties account if a garnishment writ is served on it. In order for the garnishment to be dissolved, the debtor will need to employ a lawyer to file an exemption claim in court. As long as the debtor is going through legal proceedings to get rid of an order of garnishment, a bank isn’t accountable for keeping the money in a garnished account.
Option 2: State Laws that Don’t Allow Bank Garnishments
The best way for a judgment debtor to protect a bank account is to choose a bank in a state that does not allow garnishment against banks. If that is the case, a garnishment writ cannot be used to hold the debtor’s funds hostage while the debtor is pursuing an exemption.
Bank account garnishment is illegal in most jurisdictions, thus the debtor can always keep enough money to cover living needs and legal fees. Ideally, the debtor should not have to live in a state where bank garnishment is prohibited. No matter where they live or where the judgment was entered, any debtor can open an account with the protected bank.
There are a few states that shield a limited amount of money in a bank account from judgment creditors, like South Carolina and New Hampshire. Creditors can’t seize funds from bank accounts in several states, regardless of how much money is in the account. Banks in these states, on the other hand, exclusively accept customers who reside in the state in which the bank is located (though this is not always the case).
How can I get out of debt collectors without paying?
There are three ways to clear your debts without having to spend a penny: 1) Send a letter of apology, 2) Research the FCRA and FDCPA and draft dispute letters to contest the collection, and 3) Hire a collections removal expert to remove it.
Your credit report will show collections for seven years, which means you will be denied auto, housing, personal loan and credit card approvals as well as several employment opportunities. It’s in your best interest to get rid of them as soon as possible.
Does your debt go away after 7 years?
After seven years, an individual’s credit report will no longer include late payments linked with an unpaid credit card debt, which will no longer have an impact on the individual’s credit rating. However, credit card debt that has not been paid for seven years will not be forgiven. Depending on the state’s statute of limitations, you may or may not be able to utilize the age of the debt as a winning defense after seven years of unpaid credit card debt. It varies from three to ten years in most states. A creditor can continue sue after that, but the action will be dismissed if you argue that the debt is time-barred.
- You may be sued for unpaid debt at any time throughout the statue of limitations period, and the age of the debt will not be a defense in court. It will be on your credit report for seven years after the judgment is filed if the debt collector wins the action against you. Wage garnishment and the (forced) sale of your assets are two ways that a judgment might be obtained once a lawsuit has been filed. Interest may accrue until the loan is repaid, however that is contingent on the state in question. If you fail to pay your debts, you may potentially be sentenced to jail time. There is no jail time for civil debt (including credit card debt), but there is jail time for failing to pay a civil fine imposed when your creditor goes to court against you.
- In the event of a late payment of 30 days or more, the late payment will be reported to the credit reporting agencies and will appear on your credit report for a period of seven years. In the same way, if you are 120 days or more behind on your payments, the lender will remove the loan from your credit report. Credit card accounts that have been “charged off” will be listed as “Not Paid as Agreed” on credit bureaus. Charge-offs will also remain on your credit report for seven years.
- The damage to your credit score becomes better with time: Your credit score takes a hit if you have late payments or charge-offs on your credit report. How much of a dent they make in your credit relies on the state of your credit as a whole. If you miss a single payment, you could lose up to 80 to 100 points from your credit score. A charge-off can lower your credit score by as much as 110 points; the majority of this decrease comes from the late payments that were recorded on your credit report.
After seven years, you’re still responsible for any credit card debt you haven’t paid off. In states where the statute of limitations has expired, it may be preferable to work with debt collectors rather to risk a lawsuit. To reset the statute of limitations, you’ll need to weigh your choices carefully before making a decision to do so. You may be able to pay less than what you owe or work out a payment plan if you contact your creditor. Wage garnishment or the forced sale of your assets may be an option if the debt collector wins a case against you. Our tutorial on how to pay off credit card debt has some helpful advice.
