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Statute of Limitations on Debt Collection is the amount of time that creditors have to collect their debts by suing you in court and by other legal methods. Once the statute of limitations period is over, the creditors cannot sue you in court. However, the debt that you owe STILL REMAINS. Do not think that once the statute of limitations period is over, your debt will disappear. It will not! Creditors can collect their debts owed via other legal methods like a debt collection company.

We should point out that there are NO Statute of Limitations on the following types of debt owed: Child support due payments, Federal & Local state taxes, Parking fines, illegal fines and Federal Student Loans.

Each US Statute has its own statute of limitations periods. Generally speaking, here is the statute of limitations on the following types of debt: Auto Loans: Debt owed on auto loans generally expires in 6 years. Unsecured Debt: 3-6 years after the last missed payment by a consumer, or last tracked activity.

The moment you sign that debt contract for example a car lease document, a personal loan or other types of loans, the Statute of Limitations period begins. However, this rules varies state by state. Some states also allow the ‘adjustment” of this period. For example, a person living in Alabama has credit card debt of $15000 and does not make a single payment for 3 years. Now in the state of Alabama, the statute of Limitations period is 6 years. If that person travels out of the state of Alabama (say to Florida) for 1 year, then his statute of limitations period STOPS up until he returns back to Alabama from Florida. Upon his return to Alabama, this period resumes again (3 more years).

Also note that after 3 years of having not made a single payment on your debt, you start making payments again. This new payment automatically resets the statute of limitations period to 0.

We will now abbreviate the word statute of limitations as SoL. Consider another example:

You sign an auto financing contract on January 1st, 2006 where the first payment of $300 is due on February 1st, 2006. In February, you never make a payment towards your debt. The SoL expires on February 1st, 2012 (assuming you live in Alabama where the SoL period is 6 years). Why Feb 1st? This is because Feb 1st was the last time you made a delinquent payment on your loan, or this was your last missed payment. The SoL period starts counting from your last missed payment.

Now assume you receive a call from a debt collection company that instead of paying $300/month, you pay $150/month. You receive this call on March 1st, 2008 (2 years have expired on the SoL period). This offer sounds pretty good to you and you indeed do make the payment! Hey! The SoL period at this point automatically resets to 0 and will run for another 6 years!

To recap, every payment you make towards credit card or personal loan debt resets the SoL clock. This resetting of the SoL clock applies only to unsecured debt and NOT secured debt. This is because in Secured Debt, the lender will simply confiscate your collateral (a pledged home, your car, etc) and will not have to deal with collection issues.

If your lender harasses you after the SoL period of collecting the debts is legally over, you will not have to go to court. The court will probably call off the case as soon as the Judge finds out that the SoL period is over. You should write up an “Expired Statute of Limitations” letter to your creditor and inform him that the SoL period is over.

Many people confuse the Statute of Limitations Period of Debt Collection with the SoL period for Credit Reporting. For instance, consider you live in Arizona where the statute of limitations period is 3 years. After 4 years, you can defiantly refuse to pay that debt and the court will rule in your favor. However, according to the rules defined in the Fair Credit Reporting Act (FCRA), your delinquent debt will be shown for up to 7 years (since your last delinquent or missed annuity payment).

Rapid Recovery Solution is a New York debt collection agency. This and other unique content ‘consumer collection agency’ articles are available with free reprint rights.

Just like the phoenix that rises from the ashes, so does so-called zombie debt. A consumer may think it’s dead, but it keeps coming back to haunt them.

“Zombie debt is a phrase to describe all debt that a consumer had forgotten about or never even owed that comes back to haunt them,” said John Monderine, of Rapid Recovery Solution, Inc.

Joan Baker has been tormented for years as collection agencies hassled her about debt that was not even hers to begin with. More than a decade ago Baker was the victim of identity theft and since then debt collectors have not let her rest.

“It is a nightmare. It won’t go away,” Baker said. “I had knots in my stomach. I was on the phone for hours.”

Baker reported a fraudulent $5,000 charge and still the debt collectors were persistent. When she refused to pay, they went after her credit rating. Each time she cleared her name with one agency, the cycle started up again because her debt had been sold to a different debt collection company.

Baker finally sued the persistent collection agency for fraud five years ago. Baker was awarded $40,000.

Her experience is not an isolated one.

When Larry Randazzo missed a Verizon bill for 11 cents, it ballooned into $4,000 seven years later.

Randazzo said the collector backed off when he made it clear that he knew his rights.

“If they are going after me, someone who has the resources to fight them, what are they doing to people who don’t understand their rights?” he said.

“I think what I did was make them aware that I was aware,” Randazzo said.

Many banks sell debt. For example, an institution might sell a credit-card debt worth $10,000 to a collection agency for only $100. Then, the agency turns around and aggressively tries to collect and whatever it receives is mostly profit.

This year more than $100 billion of “junk debt” is expected to be bought and sold on the open market, according to a report by debt collection advisory Kaulkin Ginsberg. A debt collection trade association said it polices its members.

“Once we determine that the complaint is against a member of ACA International, what we do is seek to work with the consumer and the debt collection agency to identify a solution,” said Rozanne Andersen, executive vice president of the Association of Credit and Collection Professionals.

How to Protect Yourself

First, ask for something in writing.

Consumers should know the statute of limitations in their state. Many allot about seven years where you cannot be sued or have your credit rating destroyed.

“If a consumer knows the debt is past the statute of limitations, they should not pay it,” said Mauro.

Also, you should never let a collector debit your account because the money can often be difficult to get back.

Rapid Recovery Solution is a third party debt collection agency. Get a totally unique version of this article from our article submission service

The government is stepping up to bat as debt collection hoaxes rise. In recent news, Buffalo New York has been home to a number of illegal debt collection practices, and authorities have arrested at least twelve people. Although the vast majority of collection agencies are legitimate and good economically, there has been a rising amount of deceptive and unlawful practices.

In Buffalo, people have been caught calling up people who owe money and posing as police officers. They have threatened to send debtors into prison, or even take child custody away from them. And it doesn’t end there.

A recent civil case imposed a $675,000 penalty ever imposed on a debt collection business, for illegal and deceptive practices. This includes badgering and lying to consumers, disclosing their debt to third parties, and cashing in on post dated checks early. These tactics were accompanied by deceptive claims from agents saying they were lawyers or other figures of authority.

In addition to refusing to disclose the address or phone number of the “company” these agents even went as far as to call people who did not owe any money at all and attempted to collect from them. Despite claims that it was individual workers acting illegally, the Federal Trade Commission went after the business owners and won a case that served the biggest penalty ever for debt collection companies.

To avoid being a victim of fraudulent collection agencies, it is crucial to know your rights. A collection agency can not seize a debtor’s assets, bank accounts, or paychecks. They can never get a debtor fired from their job, and cannot make any kind of public announcements concerning the debt, and they can definitely never threaten or engage in violence.

For further information, refer to the Fair Debt Collection Practices Act, which outlines the regulations and rules of debt collection.

Mallory Megan works for a debt collection company. She also writes articles on business and finance, consumer spending and collection agencies. Get a totally unique version of this article from our article submission service

With consumer debt at an all time high, owing a debt can seem very overwhelming. A lot of people have looked into the internet and have seen advertisements claiming debt relief as a quick fix. Alluring as these ads may seem, it is important to be on the lookout for the validity of the claim.

A good deal of these promise a quick fix, but that quick fix might be bankruptcy. Yes, bankruptcy is one way to address your financial problems, but in most cases it should be a last resort. The fact that you claim bankruptcy remains on your credit report for ten years which means that your chances of getting credit, employment, a place to live or insurance are significantly lowered.

It’s always a good idea to consider other options before deciding to file for bankruptcy. Talk with your creditors. Many times a re-payment plan can be worked out that is modified or can be paid in installments. Credit counseling services can work with you and your creditors to make debt repayment plans.

When you are considering a second mortgage, be careful. These loans require your home as collateral. Bankruptcy can stop foreclosures, debt collection activities and it may get rid of unsecured debts. Exemptions are provided that let you keep certain assets. However, personal bankruptcy does not usually take away child support, fines, taxes, alimony and in a few cases student loans.

It will not usually let you keep your property if your creditor has a security lien or mortgage that has not been paid. A relatively recent change in bankruptcy laws creates certain tasks that you must complete before you can even file for bankruptcy, no matter what type of bankruptcy. First, you have to get credit counseling from an organization approved by the government within six months before filling.

Also in some cases you must pass a test that requires you to confirm that your income doesn’t exceed a certain amount.

Mallory Megan is employed by a debt collection agency. Also she writes stories on business and finance, consumer spending and collection agencies.

Tax season has arrived and so have the cyber crooks. IRS scams are circulating, the latest one involving an official looking email from the IRS that states that you can get your tax refund on a Visa or a Mastercard. It asks for your credit card number, your social security number, credit card expiration dates, card verification value numbers, amount shown on your tax return, filing status and other personal information.

An example of the phishing email can be found on the IRS web site.

“After the last year’s calculations of your fiscal activity we’ve determined that you’re eligible to receive a tax refund of $78.87. Please submit the tax refund request and allow us 6-9 days to process it. Access the form for your tax refund by clicking here. – Regards, Internal Revenue Service.”

The IRS does not notify taxpayers of refunds, or any other payments that may be due, by email. Rather than click on the link in the message, you should forward the email to phishing@irs.gov, and erase the original from your email account.

IRS schemes work one of two ways: scammers send unsolicited e-mails that seem to come from the IRS and tell recipients that they have refunds that are due. But first they need to click on e-mail links and provide needed information, which they will use to steal a victims identity.

The second version is an email that claims to be from the IRS Criminal Investigation Division telling the reader that they are under investigation for false tax returns. To learn more about the complaints against them, consumers click on the links which have Trojan horse codes.

These codes take over computer hard drives and let swindlers remotely access the computers and use them to send spam email among other things. If you ever do receive unsolicited emails from the IRS, they urge you to forward them the email.

Mallory Megan works for a debt collection agency. She also writes articles on business, finance, consumer spending and collection agencies. Get a totally unique version of this article from our article submission service

Do you know how much debt your medical collection agency collected last year? If you don’t, how can you evaluate their effectiveness or your return? How could you possibly be aware?

Most patient balances forwarded to a medical collection agency are often considered “lost causes,” there would be little point in using such services if that were always the case. Logic dictates this much. Some of the reasons are as follows: Some patients simply do not respond to practice statements or internal collection letters. They will, however, respond when a collection agency states it will report their failure to pay to credit bureaus. Collection agencies have a number of resources on their hands. If reporting a debt to a credit bureau does not work, there are attorneys on hand that can assist you with problem consumers who refuse to pay.

It is common knowledge that most medical practices acknowledge the need for collection agency services but they should evaluate and manage this collection method just like any other. Practices should have a full understanding of the terms of the agreement with their collection agency and the results of such arrangements; they must also understand how their own internal processes affect the agency’s success. And internal processes do have an enormous effect on the amount of money that you can collect.

Here are six questions you should ask when evaluating your current collection agency.

What is the total dollar value of accounts placed with the collection agency last year?

What is the protocol for turning accounts to collection?

What is the average age of transferred accounts?

What percentage of transferred accounts had balances less than $50?

How much did the agency collect last year?

What fees does the collection agency charge?

What reports does the agency provide?

Mallory McGuinness is employed by a collections agency that works with a debt collection lawyer. Also, she composes stories on business and finance, the credit industry and collections agencies. You are welcome to reprint this article – but get your own unique content version here.

Running a business can be difficult. Sometimes it is necessary to call upon a debt collection agency for assistance collecting money that is owed. However, if businesses take a plan of prevention, they may not need to use the help of a third party collections agency. Knowing the client or customer can be extremely useful for filtering out potential problems.

First, a business should determine the full legal name of the customer that it plans to do business with. Find out the type of business structure. Is it a corporation or a partnership? The names, addresses and titles of the principal members should be collected.

It is important to know the federal employer tax identification number. The telephone number, ship to address, name, fax number and email address of the main contact should be known as well. Additionally, the bill to address, fax number and telephone number of the accounts payable contact is a good piece of information to know. Individuals authorized to submit orders should be listed.

Bank references should be inquired about. What is the banks name? The branch address, fax and telephone numbers, account types, account numbers and dates opened can be useful information. The name of the bank representative should be collected as well.

Finally, the terms and conditions of sale must be accepted and acknowledged by the client’s signature. The client’s signature, printed name, date of signing and title should be collected, and it is crucial to have the company’s lawyer look over any documents before use.

Find out the client’s credit history and keep great communication via personal visits or phone calls. Have a timely delivery of goods and services, and up to date records and accounts receivable information. Send memos and letters out to remind the client about the money owed and keep them up to date.

Join an industry credit group and participate actively. Always know the laws in your state regarding collections and business proposals. To protect the company, be sure to collect references. Bank references, including the bank name, branch, account type, account number and trade references are important to know. Collect at least three trade references that include the name, address, telephone number and email addresses.

Mallory Megan is employed by a debt collection agency. She also composes pieces about finance and business, consumer spending and debt collection.