How To Deal With Collection Agencies ~ Part 3 (State Statute Of Limitations For Credit Cards)

A lot of the bad credit that is on credit reports is from collection agencies.  But, there are original creditors too that report, so you may have 2 or more negative entries on your report for the same alleged debt.  This tool, the State Statute of Limitations (SOL) is great for both.  Now, most states have reasonable SOL's but there are a few that are absolutely insane!  When an alleged debt is outside of the SOL it is considered Time-Barred and non-collectible.  But, that doesn't stop many of these collection agencies, and some creditors, from still going after you.  What is completely ridiculous, is that they legally can!  Well, that is, unless you put a stop to them.

How do you put a stop to them, through a demand for validation and then a follow up with a Cease & Desist (C&D) letter.  Some are arrogant and greedy enough though to file a civil claim against you.  That can easily be defeated by taking their lame attempt at validation (usually some printout or a copy of the last bill from the original creditor) that clearly shows a date from years ago.   I have actually seen them dummy up a new statement with a current date on it, supposedly from the original creditor, to try to re-age and trick the alleged debtor into giving up and just paying them.

I'm going to shout now, and bang my head against a wall - DON'T DO IT!!! DON'T PAY THEM!!!

Dig around for a true old bill or contact the original creditor for a copy of the statement.  Ask them to send you back a copy of the last bill that you paid or better yet, check your credit report. Usually, the original creditor will put a somewhat accurate date on the credit report, and Equifax has a little chart that shows when you did and didn't make payments.  That is proof of the Date of Last Activity (DLA), which is when the SOL starts tolling.  If you're sued, then that will be one of your exhibits in your answer to the complaint, proving that it is time barred and they have no recourse.  Don't forget, you want to keep copies of your letters demanding validation and their responses.  It is just more proof that they didn't validate, so they are in violation of the FDCPA (continuing collection activity without validating or verifying the alleged debt).

So, let's get to it. Here are the Statute of Limitations for Open Accounts, which represent credit card accounts, which are the main type of negative credit that annoys most of us, for every US state and several territories. 

STATE	NUMBER OF YEARS	ANY COMMENTS
Alabama	3 Yrs	Actions based on fraud - 2 yrs
Alaska	3 Yrs	Used to be 6 yrs
Arizona	6 Yrs  or  4 years On July 20, 2011 AZ changed its statutes to include credit cards as written contracts. If the default/DLA is prior to 7/20/11 then the prior 3 year statute of limitations (SOL) applies. If the DLA is after 7/20/11 then the new SOL applies.  Now, the new 4 year SOL is for credit card accounts obtained outside the state of AZ and the 6 year SOL applies to credit cards obtained in the state of AZ.  So check the billing address of your credit card account to see whether your credit card is inside or outside of AZ.	Judgments have to be renewed w/in 5 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Arkansas	3 Yrs	Medical 2yrs from service or last payment, whichever is latest
California	4 Yrs	SOL stopped if pymt made after SOL expires - In other words, Do Not Make Pymt after it expires! But, pymt w/o acknowledgment does not restart the SOL
Colorado	3 Yrs	Jdgmt can renew every 6 yrs
Connecticut	6 Yrs	Open is considered written
Delaware	3 Yrs	Considered a general contract
District of Columbia	3 Yrs	Oral promise restarts SOL!!
Florida	4-5 Yrs	Contract or Written instrument is 5 yrs but all other is 4 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Georgia	4 Yrs	From date of default, not last pymt. Making a pymt without acknowledging the alleged debt does not restart the SOL.
Guam	6 Yrs	For contracts such as medical bills, the SOL is 4 yrs from date of service
Hawaii	6 Yrs	Jdgmt can renew 10 yrs
Idaho	4 Yrs	Jdgmt can renew 5 yrs
Illinois	5 Yrs	Pymt or promise to pay extends it to 10 yrs from that date
Indiana	6 Yrs	Pymt, acknowledgment or a promise to pay restarts the SOL
Iowa	5 Yrs	Pymt, acknowledgment or promise to pay restarts SOL
Kansas	3 Yrs	Written contracts SOL is 5 years. Many sources claim SOL for credit cards is 5 yrs but that is not so according to Article 5, 60-512 of Kansas statutes.  Pymt w/o acknowledgment doesn't restart the SOL
Kentucky	5 Yrs	Judgment 15 yrs
Louisiana	3 Yrs	Jdgmt can renew 10 yrs
Maine	6 Yrs	Jdgmt is 20 yrs (don't let that happen to you! Pymt w/o acknowledgment doesn't restart the SOL
Maryland	3 Yrs	Reaffirming through written, orally or a pymt restarts SOL
Massachusetts	6 Yrs	Judgment 20 years, probate claims 1 yr from date of death. Pymt w/o acknowledgment doesn't restart the SOL
Michigan	6 Yrs	Jdgmt can renew 10 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Minnesota	6 Yrs	Pymt or written acknowledgement restarts the SOL
Mississippi	3 Yrs	Jdgmt can renew 7 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Missouri	5 Yrs	Jdgmt can renew 10 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Montana	8 Yrs	Written acknowledgment or pymt restarts SOL
Nebraska	4 Yrs	Pymt, partial pymt, or written acknowledgment restarts SOL
Nevada	4 Yrs	Pymt w/o acknowledgment of alleged debt doesn't restart SOL
New Hampshire	3 Yrs	Pymt restarts the SOL
New Jersey	6 Yrs	Jdgmt can renew at 20 yrs - that's insane!
New Mexico	4 Yrs	Written acknowledgment or pymt restarts the SOL
New York	6 Yrs	Pymt w/o acknowledgment doesn't restart the SOL
North Carolina	3 Yrs	SOL runs from date of each individual charge
North Dakota	6 Yrs	Written acknowledgment, promise to pay, or payment restarts the SOL
Ohio	6 Yrs	Jdgmt can renew at 5 yrs
Oklahoma	5 Yrs	Jdgmt 5 yrs
Oregon	6 Yrs	Jdgmt 10 yrs
Pennsylvania	4 Yrs	Written acknowledgment, promise to pay or pymt restarts the SOL
Puerto Rico	3 Yrs	Jdgmt 15 yrs
Rhode Island	10 Yrs	Jdgmt 20 yrs.  Just slap me silly if I ever go nuts and move there!
South Carolina	3 Yrs	Written acknowledgment or partial pymt restarts the SOL
South Dakota	6 Yrs	Jdgmt 20 yrs.
Tennessee	6 Yrs	Jdgmt 10 yrs
Texas	4 Yrs	Pymt w/o acknowledgment doesn't restart the SOL
Utah	4 Yrs	Jdgmt 8 yrs. Written acknowledgment restarts SOL
Vermont	6 Yrs	Jdgmt 8 yrs
Virgin Islands	3 Yrs	Jdgmt 20 yrs
Virginia	3 Yrs	Jdgmt can renew at 10 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Washington	6 Yrs	Jdgmt can renew at 10 yrs
West Virginia	5 Yrs	Acknowledging debt, promise to pay, any pymt restarts SOL. Be careful, it may apply to verbal/oral acknowledgment.
Wisconsin	6 Yrs	Pymt restarts the SOL
Wyoming	10 Yrs	Jdgmt 21 yrs. Again, just slap me silly if I ever go nuts and move there!

This information is believed to be correct as of the date of this post, but state laws and statutes can change.  You should also check your state statutes to verify that this information is correct, just to be on the safe side. Even though some states show that making a payment without an acknowledgement does not restart the SOL, to be on the safe side, Don't Make A Payment! Don't verbally or in writing admit that its your debt. Don't reaffirm, especially if you are near, at, or past the SOL. Doing any of these things will make the negative information stay on your credit longer. You're trying to improve your credit, not make it worse, right?

Again, just because you have hit the SOL for an alleged debt, it doesn't mean the lowlife, scumbag, junk debt buyers can't keep hounding you and keep trying to collect. If you are outside of the SOL, you will need to send them that C&D letter to make them go away.  I have a sample of one of the C&D letters I use on the post from April 30th, 2013 titled How To Stop Collectors and Creditors From Calling You. (It will open in a new window if you click this link).  

If you don't mind them calling you multiple times a day or using auto dialers, or any other violation of the FDCPA, FCRA, or TCPA (Telephone Consumer Protection Act), you can keep a notebook or log book and start documenting, then hit them with a "Notice of Demand" for their violations, notifying them if they don't remove the negative entries from your credit reports, you will be taking them to court.  There is a procedure for this, but I do have some friends that successfully have made some of them pay them as well as deleting the alleged accounts.

Well, hopefully this information will help you in your fight for better credit reports and good riddance of those pesky collectors.  If you need help with your credit repair, feel free to call or email me. I do respond and answer my phone.  If its a job you don't want to take on by yourself, again, just email or call me. My contact info is Waaaay up there at the top on the right (I know, this is a looooong post!). I would love to help you get the credit report that rightfully belongs to you!

How To Deal With Debt Collection Agencies ~ Part 2 (States With State Version Of The FDCPA)

The Fair Debt Collection Act (FDCPA) is a great weapon to use when repairing your credit.  However, it only applies to 3rd party collectors.  Most states have statutes or codes that deal with collections though they deal more with 3rd party conduct or contract terms.  But, there are a number of states that have their own version that mirrors the FDCPA except that it also includes original creditors.  So, when you are demanding validation, you will want to tell the 3rd party collectors that the demand for validation is pursuant to both the FDCPA and the state version. Unfortunately, some state Fair Credit laws or Fair Debt Collection laws or statutes  still do not include original creditors.  Some do include original creditors with the exception of demanding validation from them.  I will give you a not so well knowm tool to use also, that I recently found through research, that you can use for every single state, at the end of this post.  For now, here are the states with their own Fair Debt Collection Act that applies to original creditors:

State                Name of Law                                 Includes OC     
Arkansas -  AR Code Annotated  § 17-24-102         Yes                 
Mainly for conduct

California - Rosenthal Act                                     Yes                  
  Validation for Original Creditors (OC) is excluded

Connecticut - Connecticut FDCPA                          Yes                
Has a really interesting provision that sounds like they really
are not allowed to collect debts! It says:

1. § 36a-805   (3) purchase or receive assignments of claims for the purpose of collection or institute suit thereon in any court;

2. and § 36a-806 (b) No creditor shall retain, hire, or engage the services or continue to retain or engage the services of any other person who engages in the business of  a consumer collection agency and who is not licensed to act as such by the commissioner, if such creditor has actual knowledge that such person is not licensed by the commissioner to act as a consumer collection agency.

Florida - FL FDCPA & also                                  Yes
FL Consumer Collection Practices Act    ~ Not all rules apply to OC's or Lawyers

Iowa - Iowa FDCPA                                            Yes

Kansas - KS FDCPA                                            Yes
It really seems to only deal with banning illegal contracts and usury interest rates

Louisiana - LA FDCPA                                        Yes

Maine - Maine FDCPA                                        Yes but only if they use a different name for their collection division.   It mirrors the Federal FDCPA

Maryland - MD Consumer Debt Collection Act      Yes
This is a good one! Mirrors the FDCPA and includes OC's

Massachusetts - Consumer Debt Collection         Yes
Practices Regulations.  This is the first state to require OC's to VALIDATE!!

Michigan - Collection Practices Act                     Yes

New Hampshire - NH Debt Law                           Yes
Does not require an OC to validate

New York - NY Debt Collection Law                      Yes
Don't believe it includes validation for OC

North Carolina - NC Debt Collection Law              Yes
But it is for prohibiting unfair and deceptive practices

Oregon - OR Debt Collection Law                        Yes
Don't believe it includes validation for OC

Pennsylvania - Fair Credit Extension                    Yes
                         Uniformity Act
Concentrates on unfair and deceptive practices

South Carolina - SC Debt Collection Law              Yes

Texas - TX Debt Collection Act                             Yes

Vermont - VT FDCPA                                            Yes
OC's have to comply w/everything except validation

West Virginia - WV FDCPA                                  Yes
It appears that OC must validate

Wisconsin - Wisconsin Consumer Act                  Yes
Does not look like OC must validate

So, these are the states that definitely have some sort of debt collection law in place.  Now, most of them apply to unfair or deceptive business practices and not validation for original creditors.  You can dispute the alleged debt using the FCBA (Fair Credit Billing Act), which applies to all original creditors.  You can also use the FCRA (Fair Credit Reporting Act) if they are reporting on your credit.  You will want them to send you the hard copy documentation, which is their responsibility and also, its right there in the FCRA.  When you dispute with the bureaus, they are supposed to furnish your entire complaint/dispute to the creditor or furnisher of the information.  The bureaus have to also send you back the documented proof of the verification if you so request.

Now, here's my new secret weapon! It is the Uniform Commercial Code (UCC) and it is "universal" but every state has statutes, so they will have a matching state commercial code.  Here is the code and then I'll explain it to you if you still don't get it.

UCC 3-501(b)(2)-(3)

• (2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.
• (3) Without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of a necessary endorsement, or (ii) refuse payment or acceptance, for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.

What this is saying is that whoever (creditor or collector) presents you with a bill, you can require them to "show you the note" or negotiable instrument, which would be a promissory note or the signed agreement.  The note they show you must be the original.  This code does not say a copy of the instrument, it says "the instrument."  They need to show you the original or a certified copy of the original, front and back sides.  They also have to prove that they own the "note" or that they have the authority to collect on it.  If they can't produce, they are in dishonor and you can refuse to pay, without penalty and still be "in-honor."

UCC 3-502 also talks about making late payments.  It states that if one fails to make a timely payment, but then pay it late and they do cash it, then you are considered in honor. My opinion of this is that if its paid, even though late, and they cash it, they should not be able to report late payments, because they agreed to take the payment on a different date and cashed it, it is paid on time.  I may be wishful thinking, but I read it so many times and that's how it looks to me.  Here's what it says:

• (f) If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored.

See the word "never" in there?  It will be treated as never having been late, because it was considered dishonored originally because it was not paid on time.  But, when they accept the payment and cash it, it should wipe out the late!  Anyhow, that is my interpretation of it.

I would say, use the FDCPA and the state laws for 3rd party collectors and use the state version alone with original creditors, and hope it is received by an ignorant employee who doesn't realize that the state version still doesn't require validation, and you can get away with it.  Also, don't forget to use the FCBA, these UCC codes, and find your corresponding state commercial code to use against them as well.

I hope this post helps you.  Check back in about a week for my next post which will let you know the Statute of Limitations for each state.  Its important to know these as you can use them to make 3rd party debt collectors and original creditors, go away!

As always, if your credit report is looking pretty bad with a bunch of negative trade lines and you don't want to tackle it all by yourself, contact me by email or phone.  My contact info is up at the top, on the right hand side.  I would love to be the one you choose to help you with a fresh start!

How to Write Follow Up Letters For A Medical Collector's Validation Response

On my last post, I had already written so much that I thought it would be good to address the follow up letters you need to send when you get a supposed validation response for a medical collection in another blog post. Collectors, whether standard alleged debts or medical, have to comply with the FDCPA and also the laws that many states have that mirror the FDCPA.  But, medical collectors also have to comply with HIPAA. That is the Health Information Portability and Accountability Act.

First of all, when you demand validation from a collector for an alleged medical debt, you really should be altering your letter a bit.  Medical providers have to comply with very strict HIPAA regulations. HIPAA governs the privacy of medical information. Failure to comply with, or committing violations of HIPAA, come with stiff penalties and even jail time.  This set of laws isn't playing around.  When you demand validation for medical collections, you need to use HIPAA to your advantage.

Medical collections are most of the time actions of 3rd party collectors.  It is very uncommon to have collections from the actual medical provider.  They are in the business of medical stuff, not collections. They have billing and accounts receivable departments, but they usually turn accounts that are not paid for in 30 - 90 days over to a collection company immediately after that time has passed.  That is wonderful for you. 

I'm not saying you shouldn't be taking care of your medical bills, but really, who has that kind of money laying around?  If you don't have insurance or you do but they are slow to take care of their part, it affects your credit, and they don't give you time to make payment arrangements usually. No, they let the 3rd party collection companies do that.  Well, you know how I feel about 3rd party collectors - you don't owe them a dime!

I hate 3rd party collectors, and the 3rd party medical collectors really turn my stomach.  Here's why.  I'm in real estate. You have a property that you listed or you have a buyer that finally got his offer accepted and you're on the final stretch in escrow.  The buyer has been approved for a loan, credit is fine, no collections that have to be paid, then...out of nowhere, on the final credit pull by the lender prior to funding...OH CRAP!!!! There's a brand new medical collection that is super old, reporting on the credit report and its screwing up the score and it has to be paid and removed or this deal goes south!

YES, THAT'S WHAT THESE BLOOD SUCKERS DO!  They monitor or ping, or somehow find out someone is buying a house and they know that people will pay even old, time barred debts so that they can finally buy their house. These 3rd party collectors are unscrupulous, low life, law breaking, scum of the earth pricks that will do ANYTHING for money!  Okay, you get the idea, I really can't stand them!

Let's take a look at the types of responses you may get from medical collectors. The first one, and the main one I like, is the letter that straight out says they are discontinuing collection efforts and sending it back to the original creditor.  That is such a beautiful thing to see.  Sometimes they will even state in the letter that they are removing all entries of it from your credit reports.  You will still need to send a dispute letter to the bureaus to make sure that they take it off.  If it doesn't come off, send another dispute to the bureaus with a copy of the letter that the collector sent you stating that they are removing it. That should definitely make it go away.

The next type of response is very similar to other types of collections.  They say they have investigated and they are reporting correctly.  That is NOT validation!  That is HEARSAY! Sometimes when they address their response, they call it your request for "Verification."  You did NOT ask them for Verification, you asked them for Validation.  Validation is forwarding copies of the actual proof of the alleged debt and alleged account.  Verification is being willing to testify under oath that they have the documents on hand, know everything that has ever transpired on the alleged account, and testifying that everything that is reported is 100% accurate.  Your follow up letter tells them what I just said.  Hold them to it, call them on it (in writing, not on the phone), and never acknowledge the alleged debt or alleged account.  It is their job to prove it.

The next type of response is also very similar to other types of collections. They may respond just like the previous example, but they include a printed statement from the original creditor. Sometimes it will be a copy of your signature agreeing to be responsible.  Sometimes you can tell that they copy/pasted the signature.  That is still not validation.  That is a paper saying that you agree to be responsible for the services, but it is not a contract between you and them.  Where is that?  Where is the full accounting?  Where is the contract showing that they have been given the right to collect on the alleged debt from the original creditor?  They don't send those because they don't have it.  And if they give the full accounting, well, you've got them on HIPAA violations really strongly.

The next type of response is my second favorite response.  It is the one where they send a full accounting from the medical provider.  It has medical procedures, medications, supplies, you name it.  It has HIPAA violation written all over it! You see, that is your information that is supposed to be very private. They are never supposed to come in contact with that kind of paperwork.  This is the one where your response letter really gets to go after them and ream them good. Here's some of the stuff I tell them when I see those:

• They committed a Level 3 HIPAA violation that comes with not just financial penalties but can also get them up to 10 years of jail time.  A Level 3 HIPAA violation is "an offense committed with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, gain or malicious harm.
• They are in violation of Subtitle D of ARRA Sec. 13401 (Application of Security Provisions and Penalties to Business Associates of Covered Entities) 
• They are in violation of Subtitle D of ARRA Section 13407(1) - (Breach of Security).
• The last 2 can hold them liable for penalties under the HITECH Act.
• They will be in clear violation of HIPAA (..."no permissible business purpose in divulging protected health information to anyone on an account") should they ever inquire, report, update or verify anything on the credit report

ARRA is the American Recovery and Reinvestment Act which gave stimulus monies to the health care industries for IT resources. HITECH is Health Information Technology for Economic and Clinical Health. HITECH is Title XIII of ARRA. They have a lot to do with health and medical information being maintained and communicated through technological means. Think - filing and maintaining these very sensitive files online or on computers.  

Now, another thing I look for in their responses, is if they have dates of the original bills or services.  Many times, you will find that they are outside the Statute of Limitations for your state.  You can hit them with that as well.

One thing I ALWAYS include in my responses to the 3rd party medical collector, is the fact that since they are 3rd party, they have no rights to collect anything from the alleged debtor since there is no way they can prove they were on any original contract.  I always hit them with 73 AmJur, 2nd, Section 90.  They have no right to "subrogate" (substitute) themselves into a contract, whether it is by purchase, assignment, transfer, or trade. If they "bought" the debt, they did it on their own behalf, not at the request of any alleged debtor, and therefore are a "stranger to the transaction" (voluntary payee).

One of the final things I put in the letters to these vultures that clearly violate HIPAA, is that if they refuse to delete all information they furnished to any and all credit bureaus, and they do not destroy any information about any alleged account they claim to have with me, to prevent them from pursuing any more collection activity against me, and that should they sell, assign, transfer or trade the alleged account to some other entity to attempt collection, I will file a formal complaint to the DHHS OCR against them. (Department of Health and Human Services, Office of Civil Rights).

I like to hit them hard, throw the law at them and give a call to action - to get rid of it, get it off the credit report and never pull this with me again or allow some other 3rd party scumbag to attempt to mess with me either.  You can do the same.  Use the laws you find to go after them. Put the laws in their face. Its a game.  Defense is always important, but its your offense that wins the game!  Be strong. Be knowledgeable. Don't be intimidated! 

I love credit repair. I love writing. I love helping people. I love winning!  If you don't love writing, don't like research, don't look forward to repairing your credit on your own, but you want to fight, you want a chance to win the credit repair game, please call or email me.  My contact info is up at the top on the right side. I would like to help you!

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