Debt Collection Laws For Each State
Learn More About the Debt Collection Laws in Your State
The Federal Fair Debt Collection Practices Act (FDCPA) and its related federal consumer protection laws protect consumers from unfair debt collection practices. However, each state also has its own debt collection laws that creditors must abide by in order to remain compliant with the laws in their respective state. State law places a limit on how a creditor can attempt to collect a debt from a consumer. These state laws supplement the banking, credit, lending, and federal debt laws for debt collection practices. They also govern credit reporting, collection practices, the statute of limitation on debts, returned check and garnishment laws, as well as unfair and deceptive practices.
Debt collection laws established by each state will serve to regulate any actions taken on by lenders as well as collection agencies in an attempt to recover a debt. Creditors are not allowed to contact consumers very early in the morning or late into the night which is deemed inconvenient times. In addition, they prevent creditors from making unfounded threats, harassing debtors, reporting false information to the credit bureaus, and harassing debtors with frequent letters and calls.
State debt collection laws also affect wage garnishments and regulate the procedures that creditors must follow in order to garnish a debtor’s wages. State laws usually place a limit on how much the creditor can garnish and certain types of income are protected from wage garnishment. Additionally, a creditor must have a court order prior to performing a wage garnishment against a debtor.
By becoming familiar with the laws in their state, consumers can protect themselves against unfair debt collection practices. They will be armed with the right knowledge and facts to dispute any illegal actions taken against them by creditors. Below is a list of debt collection laws by State.
Alabama Debt Collection Laws
According to the Alabama Fair Debt Collection Practices Act, each collection agency is required to pay a license tax in towns and cities of 20,000 or more inhabitants for the amount of $100. With towns and cities of less than 20,000 inhabitants, a $25 fee must be paid. Every person who employs agents to solicit funds to recoup a debt from corporations, firms, or persons in the State of Alabama, will be considered a collection agency.
Alaska Debt Collection Laws
Alaska Fair Debt Collection Practices Act § 08.24.041. Duty to Enforce
This department enforces all laws and regulations related to debt collection agencies.
The statute of limitations for collecting a debt in Alaska is as follows:
- Contracts that are under seal: 10 years, (A.C. 6-2-33)
- Contracts that are not under seal; actions on an account stated and for the detention of personal property or for conversion: 6 years (A.C. 6-2-34)
- All open accounts: 3 years (A.C. 6-2-37)
Arizona Debt Collection Laws
Arizona debt collection laws make it illegal for debt collectors to engage in intrusive and deceptive practices to collect money for a creditor. According to Arizona debt collection laws, all collection agencies must be fully licensed. It protects consumers from abusive collection practices. Since Arizona law is a criminal statute, individuals are not allowed to sue collection agencies when they violate the law. Although since the FDCPA is still applicable in Arizona, the debtor can sue to recoup monetary damages under the federal statute.
Arkansas Debt Collection Laws
Arkansas debt collection laws stipulate that there is a statute of limitations that applies to debt collectors. However, this law excludes the original creditor in this stipulation: Ark. Code. Ann. §§17-24-101 to 17-24-404. Additionally, the statute excludes lawyers who are collecting on their own behalf and not collecting on behalf of a client. In the event that an attorney is renting out their name to a debt collection agency, then the lawyer must then abide by Arkansas debt collection laws. Additionally, the statute is not applicable to real estate foreclosure actions.
Arkansas debt collection laws place limits on the specific amounts of collection charges that are allowed to be added to a debt. Also, the debt collector must be licensed in order to collect debt in the state of Arkansas. In addition, the law presides over unfair or misleading acts like publishing a list of deadbeats, pretending they are taking legal action, or using obscene language.
California Debt Collection Laws
California takes serious measures to protect its residents against aggressive collection activity. Some of the laws work in tandem with Federal laws while others are unique to the state of California. In the state of California, California debt collection laws and statutes of limitations specify that the statute of limitation for all debt is four years. However, this excludes debt that was made with oral contracts. Debts made by oral contract have a statute of limitation that extends for two years.
Colorado Medical Debt Collection Laws
The State of Colorado has enacted a State law to govern debt collection and collection agency practices which is called the Colorado Fair Debt Collection Practices Act. This act protects consumers by restricting the actions of collection agencies. The law does not allow misleading and unfair practices or harassment. The law also prohibits disclosure of the debt to other parties who are not obligated to pay the debt. However, the law does not include creditors who are collecting their own debt.
Connecticut Debt Collection Laws
In Connecticut, laws and regulations which protect the rights of consumers are presided over by the Connecticut Department of Banking. This department establishes and administers the laws that debt collectors in the state must abide by. The laws state that a collector can contact you by fax, mail, telephone, or telegram. However, they are not allowed to contact a debtor at inconvenient times or places such as earlier than 8 a.m. or later than 9 p.m. Connecticut debt collection laws also state that the collection agency can’t communicate with anyone about the debt besides the original debtor, their attorney, or a credit agency.
Delaware Debt Collection Laws
The Fraud and Consumer Protection Division of the Delaware Department of Justice administers the laws pertaining to debt collection practices in Delaware.
Delaware Statute of Limitations:
When it comes to debt collection, Delaware calculates the statute of limitations based on the first incomplete payment instead of the last fulfilled payment. The limitations are as follows:
- 4 years: Credit card open accounts
- 3 years: Written contracts
- 6 years: Promissory notes
- 3 years: Sale of goods
Delaware has set their wage garnishment limit at 15% of the net income instead of the disposable income which is used by Federal limits. In addition, Delaware does not allow for bank accounts to be garnished. Read the link below for more information on Delaware debt collection laws.
Florida Debt Collection Laws
Debt collection laws Florida residents should primarily be aware of include that wage and bank levies are allowed and a creditor is not allowed to seize a debtor’s home. Florida allows levies which are called attachments under Title XXXIX, Chapter 679.2031. The levy is granted if the plaintiff has a writ that commands the sheriff to seize as well as sell as much of a debtor’s property as needed to satisfy a creditor’s claim.
Florida statute of limitations is overseen by Title VIII Limitations, Chapter 95.11.
The statute of limitations in Florida include:
- Open account (i.e., credit card): 4 years (Florida 95.1(p))
- Written contracts – 5 years
- Foreclosure – 5 years
- Foreign judgments – 5 years
- Real property actions – 7 years
- Domestic judgments – 20 years
GA Debt Collection Laws
Georgia debt collection laws are overseen by the Georgia Department of Law, Consumer Protection Unit. The Georgia Industrial Loan Act (GILA) covers consumer loans that are less than $3,000 with loan terms less than 36 months and 15 days. This acts restricts the ability of creditors to harass and intimidate debtors. Under the act, debtors are not permitted to:
- Cause the borrower to suffer bodily harm
- Falsely threaten or accuse any person of a crime
- Use profane or obscene language
- Forcefully trespass into the borrower’s home without legal consent
Hawaii Debt Collection Laws
Hawaii’s Collection Practices Act protects debtors from unlawful actions that could be taken by creditors.
The Hawaii statute of limitations on debts is as follows:
- Contract, obligation or liability: 6 years.
- Judgments: 10 years, renewable if an extension is sought during the 10 years.
Idaho Debt Collection Laws
In Idaho, the statute of limitation to collect on a debt is four years. The time period is calculated from the date of the last action taken by the consumer. This means that a written acknowledgement or a new promise signed by the debtor is enough to begin the term period anew.
Illinois Debt Collection Laws
Debt collection laws in Illinois are governed by the Illinois General Assembly and the laws are contained under the Illinois Collection Agency Act. This act requires that all debt collectors obtain a license in order to collect on outstanding debts and it regulates the way in which collectors communicate with debtors. The act also allows consumers to request validation for any debt.
Indiana Debt Collection Laws
Indiana’s debt collection laws mirror those established at the Federal level. Under Indiana state debt collection laws, any debt that has been established to be personal, household, or family debt is covered under the state statutes of debt collectors. Indiana state law sets a statute of limitation on when a debt can be collected on. Learning about these limits can help consumers stay protected by becoming aware of their rights.
Iowa Debt Collection Laws
The Iowa Fair Debt Collection Practices Act 537.7101 states that a creditor must not use illegal means of debt collection such as placing threats or using coercion. Under the act, the collector is not allowed to use coercion or intimidation in order to collect on any debt. The debt collector is also not allowed to use obscene or profane language when communicating with a consumer.
Kansas Debt Collection Laws
The state of Kansas has established the Kansas Consumer Protection Act (KSA 50-623 to 50-636). Under this act, there are a number of protections for consumers who are being contacted about a debt that they owe. This act prevents actions being taken by creditors that would be considered “unconscionable”. Any consumer who is a victim of behavior that violates this act is allowed to seek damages of up to $10,000 in addition to attorneys fees.
Kentucky Fair Debt Collection Laws
Kentucky debt collection laws are not outlined as state-specific and instead, the state adheres to federal protections. These federal protections have been established by the Federal Fair Debt Collection Practices Act.
Kentucky Statute of Limitations on Debts Include:
- The statute of limitations for recovering real property in Kentucky state is fifteen years
- If a sales contract is breached, the statute of limitations is set to four years
- Debts under a judgment, bond, or contract have a statute of limitation of 15 years.
- Oral contracts have a statute of limitations period of five (5) years
- The statutes of limitations time frame for checks or other bills of exchange lasts no longer than five (5) years
- All other actions that are not mentioned in statutes carry a statute of limitations period of ten (10) years
Louisiana Debt Collection Laws
In Louisiana, there is a time limit that debt collectors must operate within when they are trying to collect on a debt. The statute of limitations in Louisiana is 10 years. This is the time limit that a creditor has to file a lawsuit. For open accounts such as credit card accounts, the statute of limitations is set at 3 years.
Maine Debt Collection Laws
In 1985, Maine enacted its own laws to protect consumers from unfair and abusive creditor collection practices. These laws are known under the Maine Fair Debt Collection Practices Act. the laws prohibit sending deceptive forms and outline prohibited practices.
Maryland Debt Collection Laws
The Maryland Consumer Debt Collection Act (MCDCA) was established to protect consumers from deceptive, unfair, and harassing debt collection practices in Maryland. This law is very extensive and adds a significant layer of protection for consumers because it oversees activity by debt collectors as well as by creditors.
Massachusetts Debt Collection Laws
Massachusetts law has established its own debt collection law which is known as The Massachusetts Consumer Protection Act, G.L. c. 93A. This law states that practices which are unfair to consumers are completely prohibited. The act governs communications between creditors and consumers and outlines the statute of limitations for the debts.
Michigan Debt Collection Laws
Michigan time-barred debt law states that a creditor is not allowed to sue a debtor for an unpaid debt after a six years time period. Michigan debt collection laws statute of limitations is very clear and all debt collectors must abide by this time frame.
Minnesota Debt Collection Laws
In the state of Minnesota, there are state debt collection laws that have been established in order to protect the rights of consumers. Debt collectors attempting to recoup payment on a debt must abide by these laws covered in Minn. Stat. §§332.31 to 332.45. The Minnesota law covers debt collection agencies but it does not cover real estate professionals, lawyers, or financial institutions such as banks. Additionally, in the state of Minnesota, a debt collector must be licensed in order to collect on a debt. The statute of limitations for using the court system to collect on a debt in Minnesota is six years for credit card debt.
Mississippi Debt Collection Laws
In the state of Mississippi, individuals are protected by Federal laws as well as state laws which govern debt collection practices. Under Mississippi debt collection laws, it is required that the debt agreement be made in the state’s jurisdiction. Other mandates include stipulations for legal collection actions that are enforced through the Attorney General’s Office. Mississippi has a short statute of limitations on deficiency claims which is only one year.
Missouri Debt Collection Laws
Missouri debt collection laws dictate that for written agreements that handle property or the payment of money, the statute of limitations for debt is 10 years. (Missouri Revised Statute §5l6.ll 0). In specific circumstances, the contractual statute of limitations can be reduced down to five years. In the case of oral and verbal contracts, there is a 6-year statute of limitations and promissory notes in Missouri have a defined 3-year term. Credit card accounts have a 5-year statute of limitations. (Missouri Revised Statute §5l6.l20).
Montana Medical Debt Collection Laws
Montana medical debt collection laws and standard debt collection laws have a statute of limitation on written contracts, liabilities, and obligations of 8 years. All verbal contracts, promises, and accounts have a statute of limitations of 5 years. Additionally, any judgments or decrees made in a U.S. court have a 10-year time period where creditors can pursue a debt legally.
Nebraska Debt Collection Laws
The Nebraska debt collection laws cover collection agencies. However, it excludes attorneys who handle claims in their own name, not on behalf of another business entity. Neb. Rev. Stat. §§45-601 to 45-623. This statute requires that the debt collector be licensed to collect. Additionally, Nebraska debt collection law restricts a lender’s communication with debtors and third parties and prohibits abusive and harassing practices. Rev. Stat. §§45-1043 to 45-1058.
Nevada Debt Collection Laws
Nevada has specific restrictions on the actions of debt collection agencies. The law also places statutes of limitations on the time period to collect a debt. In Nevada, any oral contract for the purchase of goods or services has a statute of limitations of 4 years. Written contracts, however, have a statute of limitations of 6 years while promissory notes have a limit of 3 years. Open-ended accounts such as credit card debt have a 4-year statute of limitations.
New Hampshire debt collection laws
In New Hampshire, debt collection practices are limited by two laws, the federal statutes as well as New Hampshire’s own debt collection laws. The New Hampshire debt collection law is known as New Hampshire's Unfair, Deceptive or Unreasonable Collection Practices Act (RSA 358-C) (State Act).
The New Hampshire Debt Collection Laws Specify:
- Debt collectors must identify themselves clearly and identify the nature of the debt in communication with consumers
- Establish the consumer’s right to limit the type, frequency, and location that contact occurs
- Establish consumer solutions in the debt collection process if debt collectors violate the requirements of the Act.
New Jersey Debt Collection Laws
The New Jersey Consumer Fraud Act (CFA) goes above and beyond the Federal statutes and protects both consumers and businesses. Under the CFA, companies are not allowed to use misleading practices including deception, false promise, false pretense, or fraud. In addition, companies are not allowed to advertise items that are not genuinely for sale. The price of an item is required to be attached to the item or in plain sight in accordance with the Unit price disclosure Act found within the CFA.
New Mexico Debt Collection Laws
According to New Mexico debt collection law, there is a statute of limitations with a length of 6 years on written contracts. However, contracts for the sale of personal property have a 4-year limitation period. The creditor has that length of time within which to file a lawsuit. In addition, a recent addition to New Mexico debt collection law requires that debt collectors tell consumers when the debt they have has passed the statute of limitations.
NYS Debt Collection Laws
In addition to federal mandates, New York State has its own debt collection laws regarding how debt collectors can interact with consumers as well as specifying the statute of limitations. According to New York State debt collection consumer protection laws, the debt collector is required to provide you with a list of the collection activities that are prohibited under the federal
Fair Debt Collection Practices Act (FDCPA). They also need to list the types of income that are protected from collection if the collector ends up getting a judgment against the debtor.
North Carolina Debt Collection Laws
North Carolina has enacted laws to protect consumer rights when debt collectors are attempting to collect a debt. The law includes a number of general statutes which are found primarily in Chapters 58 and 75 of the North Carolina general statutes. The North Carolina Collection Agency Act (N.C. Gen. Stat. § 58-70-1 to-155) and the North Carolina Debt Collection Act prohibits abusive collection conduct and allows consumers to recover damages in the event of harmful and abusive collection conduct.
North Dakota Debt Collection Laws
North Dakota has enacted specific debt collection laws that are in keeping with federal mandates governing the actions of collection agencies. According to North Dakota debt collection laws, there is a statute of limitations of 6 years placed on any lawsuits for non-payment in written or oral agreements, open accounts, and promissory notes. However, debt collection agencies can continue to pursue the debt by any other legal means.
Ohio Debt Collection Laws
Debt collection laws Ohio residents should know include that there is a statute of limitations on debts that are being pursued by a debt collector. These limits govern the amount of time a creditor has to file a lawsuit and obtain a court order.
In Ohio, the statute of limitations is as follows:
Written accounts: 8 years ((O.R.C. §2305.07)
Oral contracts and verbal agreements: 6 years ((O.R.C. §2305.07)
Demand notes have a limit of: 10 years (O.R.C. §1303.16(B)).
Oklahoma Debt Collection Laws
In Oklahoma, there are statutes of limitations governing when a debt collector can use the court system to collect on a debt. In Oklahoma, all written contracts have a statute of 5 years (O.S. § 95(1)), and oral contracts have a statute of 3 years (O.S. § 95(2)). Any domestic judgments for debt collection that are rendered by a court of the state in which the judgment for the debt occurred, has a statute of limitations of 5 years (O.S. § 95(5)). All foreign judgments have a statute of limitation period of 3 years (O.S. § 95(2)).
Debt Collection Laws Oregon
Oregon debt collection laws are almost identical to the Federal debt collection laws which protect consumers from unfair debt collection practices. In Oregon, there is a law known as the Unlawful Trade Practices Act which applies to consumers who make purchases of goods for personal use. The statute of limitations on debts that fall under this category is only one year. (ORS 646.638(5).
PA Debt Collection Laws
In Pennsylvania, there are laws which protect consumers from aggressive debt collection practices.
Pennsylvania Debt Collection Laws
Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) is a comprehensive piece of legislation that provides minimal protection for consumers. Its main protection states that a seller is not allowed to engage in “unfair or deceptive acts or practices”
Rhode Island Debt Collection Laws
Rhode Island debt collection laws are outlined in Chapter 19-14.9 of The Rhode Island Fair Debt Collection Practices Act and state very clearly the statute of limitations on certain types of consumer debt.
The Statute of Limitations Is As Follows:
- Contracts and open accounts: 10 years (9-1-13(a)).
- Contracts or liabilities that are under seal and judgments: 20 years, (9-1-17).
- Hospital liens: 1 year from payment, (9-3-6).
- Mechanic's lien: notice given is one year and one hundred twenty days, (34-28-10. 10).
South Carolina Debt Collection Laws
South Carolina Fair Debt Collection Practices Act SECTION 37-5-108. Unconscionability; inducement by unconscionable conduct outlines the ways in which a creditor interacts with a debtor. SC debt collection laws state that a consumer has a right to recover actual damages if they have been treated in an unconscionable manner by debt collectors. The South Carolina Department of Consumer Affairs presides over debt collection fairness.
South Dakota Debt Collection Laws
Debt Collection in South Dakota is presided over by laws enforced by the state. These laws outline the ways in which a debt collector can interact with a debtor. In addition, South Dakota sets up a statute of limitations on how long a creditor has to collect on a debt using the court system. The statute of limitations is as follows:
- Actions not otherwise provided for: 10 Years, (SDCL 15-2-8).
- Contract: 6 years, (SDCL 15-2-13).
- Claims of Fraud: 6 Years, (SDCL 15-2-13).
- Domestic Judgments: 20 Years, (SDCL 15-2-6).
- Foreign Judgments: 10 Years, (SDCL 15-2-8).
- Open Accounts: 6 Years, (SDCL 15-2-13).
- Sealed Instrument: (except real estate): 20 Years, (SDCL 15-2-6).
Tennessee Debt Collection Laws
The Tennessee Collection Service Act also known as the Tennessee Fair Debt Collection Practices Act 62-20-101 is enforced by the Tennessee Department of Commerce & Insurance. It states that the statute of limitations to collect on debt is six years. The statute protects consumers from their creditors suing them but does not actually erase the debt itself.
Texas Debt Collection Laws
Texas debt collection laws protect consumers from unfair debt collection practices such as harassing or abusive behavior towards debtors. The law is called the Texas Debt Collection Act and violators of this act can face criminal and civil penalties. Another act that protects consumers rights is the Texas Deceptive Trade Practices/Consumer Protection Act, which allows the Attorney General to have the authority to take action in the public interest.
Utah Debt Collection Laws
Debt Collection Laws Utah residents abide by protect them from harmful and abusive practices that debt collectors are known to do. There are certain limits in place that protect consumers from a creditor pursuing the debt for an extended period of time. The statute of limitations for written contract is 4 years.
Vermont Debt Collection Laws
The Vermont Debt Collection Laws were put in place in order to protect debtors from unlawful or harassing practices enacted by creditors seeking to collect on a debt. According to Vermont debt collection law, creditors are not allowed to make threats on actions that they will or will not take, harass or abuse anyone, use deceptive representations, or contact you outside of the time period of 8 a.m. to 9 p.m.
Virginia Debt Collection Laws
Virginia laws on debt collection state that anyone attempting to collect on a debt by imitating the legal process to obtain a payment can be fined an amount of up to $250. This is outlined under the Virginia Code in The Virginia Debt Collection Act and includes anyone who simulates a court order, judgment, or any type of warrant or lien.
Washington State Debt Collection Laws
In Washington, both Federal and State laws protect consumers who collection agencies contact for the collection of a debt. In Washington, the debt collection law is called the “Collection Agency Act.” (RCW 19.16.100) as well as the Consumer Protection Act (RCW 19.86.010). Under Washington State debt collection law, there are statutes of limitation on when a claim can be filed. If it is not filed in that time frame, then it is considered as“time-barred”.
West Virginia Debt Collection Laws
West Virginia has time limits on when a creditor can collect on a debt. In West Virginia, the statute of limitations on debt collection is 5 years (W. Va. Code 55-2-6 (1923)). The West Virginia Fair Debt Collection Practices Act § 47-16-2 protects consumers from harsh debt collection practices.
Wisconsin Debt Collection Laws
Wisconsin has laws set in place to protect debtors from invasive debt collection practices. In Wisconsin, the statute of limitations for most consumer debts is 6 years time. After this period of time has expired, collecting on the debt is illegal.
Wyoming debt collection laws
The Wyoming Fair Debt Collection Practices Act states that Wyoming is a one-party consent state which means that the permission of only one party involved is required to record the phone conversation. There are very specific statutes in place outlined by the Act including that any promise to pay that are in writing can be collected on for 10 years. However, an unwritten contract has a time limit of eight years.
Carl has years of experience helping people tackle debt. As a Senior Financial Advisor, he knows the ins and outs of debt consolidation and debt management. He holds a Masters Degree in Finance and according to him, not all debt problems are the same and that’s why it’s important to take a look at the different options available for your situation.