Statute of Limitations for FDCPA
The Fair Debt Collection Practices Act (FDCPA) is part of the Consumer Credit Protection Act. The FDCPA sets regulations to protect consumers from harassment or unfair practices of debt collectors. It requires collection agencies to explain to debtors their rights under the law. In this regard, the FDCPA issues general guidelines for the statute of limitations on debt collection. This refers to the allowable time period within which a legal action can be filed in court from the date a violation occurs.
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General Guidelines
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While the FDCPA establishes broad policies, each state sets forth its own statute of limitations on debt collection. Debts can be collectible within varying time frames, generally between three to seven years. The legal time limit depends on the debt type and the state where the transaction takes place.
Duties and Rights of Contracting Parties
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Whether verbal or written, an agreement between a creditor and a debtor is legally binding. For mutual protection, both creditors and debtors should find out the applicable statute of limitations in their state. A collection agency is obliged to show a debtor a proof of the legality of the debt within 30 days. Otherwise it cannot hold a charge against the debtor.
The law is neutral to both parties after the relevant statute of limitations expires. A creditor may continue his attempts at debt collection, and a debtor may exercise his right of refusal to pay.
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Legal Proceedings
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A creditor can resort to legal action when a debtor fails to pay a debt he owes under their agreement.
Legal proceedings consider the relevant statute of limitation and the date the agreement was made between the contracting parties. After the legal time frame has passed, the debt is in effect null and void. It becomes legally uncollectible and payment cannot be enforced under the law.
Under the FDCPA, a consumer also has recourse to the law. He can either file a complaint or bring legal action against a debt collector for an FDCPA violation. In this case, the FDCPA imposes a one-year statute of limitations. This is applicable to complaints that a consumer submits to a government agency or to private lawsuits that he brings to a state or federal court.
Credit Card Debt
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A written agreement may need to be shown as evidence of a credit-card debt. If a debt incurred is past the statute of limitations and the original written contract is no longer available, the debt may be waived altogether. Applicable laws depend on each state and the particular circumstances of a case. However, credit-card companies are prompt in collecting payments due and in enforcing their policies. Remember that the statute of limitations takes effect from the date of the initial violation of the contract, or the first time a credit-card holder defaults on his payment.
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References
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