From student loans to car loans and everything in between, debts can come in a variety of forms. Although there many forms of debt, almost all of them have a statute of limitation. Basically, a statute of limitations is the date after a lawsuit–to collect the debt–expires because the debt is considered to be too old. While many court systems have ruled it unlawful to threaten suit on past debts, is it still unlawful for debt collections to make collection attempts on expired debts? Currently, there is a strong federal law called the Fair Debt Collection Practices Act that protects citizens against various unfair collection practices. However, the Fair Debt Collection Practices Act only applies to outside or third-party debts, as well as personal debts only.
Debt Collection Cases
In a case of unlawful debt collection–Gunther v. Midland Credit Mgmt., Inc. and Midland Funding, LLC–a debt collection has sent a letter to a client which requested payment of an old and expired debt. In the letter, they explained that they will not sue since the debt has reached its statute of limitations. In fact, they could not sue at all. However, this specific letter was uniquely styled to imply that by taking a settlement offer, the client would actually save money rather than going to court to settle the dispute. Unfortunately, many consumers don’t fully understand the concept of a statute of limitations in terms of debts and can be easily tricked into believing that if they don’t pay their old debt, they will face the possibility of being sued. In this specific case, the letter sent to the consumer was deceptive and unlawful and ruled so in court by Tenth Circuit under the Fair Debt Collection Practices Act.
Unfortunately, cases like Gunther v. Midland Credit Mgmt., Inc. and Midland Funding, LLC, are quite common. If you owe any debts that could possibly fall under a statute of limitations, it’s essential that you keep an eye out for the following deceptive practices of debt collection scammers:
- Attempts to collect debts that are not owed or don’t exist.
- Threats to take legal action.
- False statements and representations
If you are someone you know is being wrongfully harassed by a debt collector and debt collection agency, you can always report them to your state attorney or contact your local bankruptcy lawyer for proper protection. In many state and local courts, it is ruled unlawful to threaten lawsuit or file lawsuit on a debt that is expired. Therefore, it’s also considered unlawful to make collection attempts on those debts. Know your rights and protect yourself against unsolicited debt collection attempts on your expired debts.
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This post was written by Loan Lawyers. Loan Lawyers is a team of experienced and aggressive consumer rights litigation and trial attorneys in South Florida helping clients throughout the state of Florida.