New Limitations on Debt Collectors Are Coming: We’ve Boiled It Down


February 1, 2021

Attorney explaining new debt collection rules to client

If you are struggling with debt, you will want to know about the latest debt collection limitations rules released  on December 18, 2020, that cover

  • Information debt collectors must reveal to you about your debt
  • When debt collectors can add information to consumer credit reports
  • Limits on actions regarding debts that are past the statute of limitations for litigation

Last month we told you that the Consumer Financial Protection Bureau (CFPB), after seven years of preparation, was releasing the Final Rule of the Fair Debt Collection Practices Act (FDCPA). The Final Rule was released in three parts, and last month we discussed part 1 which covered communications using modern technology such as social media between third party debt collectors and debtors. The second release was about safe harbors for debt collectors. Today we are going to tell you what you need to know about the third and latest release that govern debt collection limitations.

The overall changes of the Final Rule are massive, but they do not go into effect until November 2021. Debt collectors across the country are busy gearing up for the changes. Now let’s get down to it, so you know what to expect.

What Debt Collectors Must Disclose to Consumers

The latest release of the Final Rule sets up requirements debt collectors must follow in disclosing information to you.

  • A debt collector must send you a written notice giving you information about the debt and your options for response.
  • They must send you this notice within five days of their first communication with you.
  • The only times this disclosure need not be sent are when
    • The debt collector gave you the information in their first communication with you, or
    • You have already paid the debt.

What Debt Collectors Must Do Before Reporting to a Credit Agency

The December release of the Final Rule covers communications with credit reporting agencies as well as consumers. Before a debt collector can report any information about your debt to a credit reporting agency, they must inform you of the existence of the debt. The notice may be oral, written or electronically transmitted.

What Debt Collectors Can Do About Time-Barred Debts

If your debt has exceeded the statute of limitations, debt collectors may not threaten to sue you for it or file a suit to collect it. However, it is not outside debt collection limitations for debt collectors may still use other means to try to collect the debt even though it is outside the time you may be sued on it.  They can still call you and send collection letters. This leaves consumers open to a dangerous trap. If you pay part of a debt that is outside the statute of limitations for a lawsuit, you can revive the debt so you can now be sued in court for it.

You will also want to know a couple of other things.  Should you file bankruptcy, a debt collector can file a proof of claim even though the debt falls outside legal time limits.  Also, if only part of your debt has exceeded the legal time limit, a debt collector can file a lawsuit to collect the rest.

Debt Fighters Can Help You

You do not have to live with the misery of debt collectors hounding you. Contact Ziegler Diamond Law: Debt Fighters for a free consultation by submitting this form or just call us directly at (727) 538-4188 in Clearwater, (813) 225-3111 in Tampa or (352) 600-1326 in Mt. Dora.

We can immediately get debt collectors off your back, so you don’t need to be afraid to answer the phone. We will analyze your situation and lay out the best options for you to move forward. Video and phone consultations as well as in-person consultations are available.

 

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