F. Paul Maloof, Esquire
A partner with Redmon, Peyton & Braswell LLP
Fair debt collection practices act
In an attempt to curb abusive collection practices by collection agencies, the U.S. Congress enacted the Fair Debt Collection Practices Act in 1977. The Act, which has been amended over the years to keep pace with new forms of incurred debt, prohibits certain types of conduct that have been used by collectors, such as collection agencies and collection law firms.
If, for example, a person became ill, was hospitalized and treated by the doctor, but health insurance did not pay all of the medical bills, the hospital may turn the account over to a collection agency or a collection law firm. Certain tactics such as calling the debtor on a constant basis and making harassing statements are considered to be prohibited conduct. The debtor has certain rights in any collection process. If the collector violates those rights, they may be held accountable for monetary damages.
A portion of our firm's practice concentrates on the Fair Debt Collection Practices Act, so if you have a concern, we may be of assistance to advise you about your rights. If your account has already gone to court and the Fair Debt Collection Practices Act applies, we can be of assistance to help negotiate a payment plan or other courses of action.
Collection laws - other considerations
Each state has its own statutory scheme that addresses the subject of collection laws. In a general sense, both the creditor and the debtor in a credit transaction have rights and obligations. If the debtor makes the periodic payment on time and in the amount as agreed, there is no dispute.
However, when the periodic payment is missed for one or more payments, the creditor usually refers the matter to a collector. A collector may be a collection agency or a collection law firm. Both are required to follow the federal and state collection laws. If a collector violates those laws, it could face a civil complaint brought by the debtor.
Typically, however, the collector attempts to collect the debt by sending a dunning letter. If this method does not produce results, the collection law firm will generally prepare and file a lawsuit.
Our firm's attorneys have represented creditors and debtors over more than twenty years in collection matters. We would be pleased to discuss with you the issues that confront you.
Subrogation is an insurance industry term that means allowing the insurer to accede to the rights of the insured after the insurer has compensated the insured for a loss that occurred and was covered by the insurance policy. Moreover, the insurance industry generally includes in its contracts a provision called a waiver of subrogation. A person who is purchasing insurance should always read the policy carefully.
F. Paul Maloof
510 King St., Suite 301
Alexandria, VA
22314-3132
Tel: 703-684-2000 Ext. 54