While there are various federal and Maryland laws that offer a range of consumer protections, many people complain every year that debt collectors ignore these laws and regulations. Everyone needs to know their rights and how to get help in case a debt collector or creditor comes calling.
One of the big problems is that the federal Fair Debt Collection Practices Act, which is now 33 years old, needs to be expanded and updated so that protections and laws afforded to consumers keeps up with a rapidly changing industry, according to both the Federal Trade Commission and others. Until that happens, here is a summary on the current law as it now stands.
The current federal law covers only third-party debt collectors, and not the original creditor who you may owe money to. Some of the highlights include that it prohibits debt collectors from calling you before 8 a.m. and anytime after 9 p.m., unless you give them explicit permission to do so. Also, debt collectors can't threaten legal action that they have no intention of taking. They can't swear at you or threaten violence. And they can't lie about your credit to others or report private information on it.
While Maryland state law does offer some similar provisions that cover creditors and collectors, they also offer some other protections.
One of the major differences is that you can sue a collector or creditor for emotional distress. There is a consumer lawyer based in Towson who is in the process of suing a credit card company under this provision for making hundreds of calls over a couple of months to a client who was undergoing chemotherapy. That was just wrong.
There is not currently a deadline for when debt collectors or creditors need to stop trying to recoup a debt, but Maryland law does limit how long they can pursue you in court. In general, the statute of limitations in Maryland for debt collection is three or four years after you stopped making payments, although it can be as long as 12 years in limited cases.
It is important to note that the statute of limitations has its own limitations. For example, it only applies to contracts that were originated and/or written under Maryland law. Unfortunately many credit card agreements come under the laws of other states that have more generous creditor rights and the statute will not apply in those cases. Also, find information on Maryland medical debt collection laws.
Be careful if you decide to do this. Unfortunately with very old debt, a debt collector will bombard you with a countless number of phone calls, as they are hoping to get you to break down and make a payment on your bills. If you do make any type of payment, that will start the clock all over again on the statute of limitations.
Creditor and debt collectors are not supposed to take you to court if the statute of limitations has run out, but they often do anyway. Another quirk in the Maryland law is that if you ignore the court notice, even if the statute has run out, the judgment will likely go against you. And in that case the debt collector will be able to garnish your bank accounts and wages in order to collect on the unpaid bills and debts.
Try negotiating and working out a solution with the collector. Never make promises you can't keep, or you'll end up in default again.
If you do come to a solution and work out an agreement over the phone, follow up with a letter sent certified mail that spells out the terms of the deal so you'll have it in writing and it can never be contested.
Maryland debt collection law states that collectors need to send you a written notice of your debt within five days of first contacting you. If you doubt the bill is in fact yours, send a letter via certified mail disputing the debt within 30 days of getting the notice. Collection efforts will need to top at that point until the debt collector provides proof that the debt is yours.
While a collector must stop contacting you if you request that in writing, that won't prevent a credit or collector from taking you to court in Maryland. And the collection agency can still contact you at least once more to let you know what action it plans to take against you, such as going to court.
If you do get a court notice, never ignore it. A judge in Maryland will likely rule against you if you don't show up to defend or represent yourself.
Always keep good records of all communication and payments you may have made. Debt is sold and resold to collectors and agencies. There are many instances in which even old bills that have been paid off have resurfaced again and again with a different collector demanding payment because of usually poor record keeping.
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