Ignoring debt collectors often leaves consumers defenseless

CONSUMER FORUM

Posted Dec. 07, 2015, at 8:27 a.m.
Last modified Dec. 07, 2015, at 9:17 a.m.

A consumer from southern Maine was summonsed to court by a creditor seeking to collect a debt. The consumer failed to show up; he lost the case in what was termed an uncontested, default judgment.

By not going to court, the consumer lost his chance to present evidence that might have swayed the judge. The consumer could have demonstrated his precarious financial position and possibly been able to pay off his debt on more favorable terms.

People who deal with consumers in debt say that such stories are not uncommon. Because they’re afraid or don’t know the law, people can make debt repayment more difficult than it needs to be.

Help is available in the latest in a series of booklets from Maine’s Bureau of Consumer Credit Protection. It’s titled “Downeaster Common Sense Guide: Debt Collection.”

If you are in debt, you owe it to yourself (pun intended) to read the guide.

A cardinal rule if you are in debt is to keep lines of communication open. That advice comes from the guide and from one of its authors, David Leach. Leach also is principal examiner at the Bureau of Consumer Credit Protection.

“Legitimate, licensed debt collectors have a job to do,” Leach said. “Our experience is the majority of times the collector will work constructively with their debtor client if that consumer will work with them in good faith, offering a plausible repayment plan.”

It’s when debtors fail to return phone calls, answer letters or otherwise become unresponsive that things can get nasty. Collectors tend to dig in when that happens, turning up heat on the debtors and using legal remedies at their disposal.

Ignoring a court date could result in a judge’s order that a debtor’s wages be garnished, granting the creditor a chunk of the debtor’s pay until the debt is settled. The guide advises always filing a written answer to a complaint with the court.

The guide covers legal protections that debtors have under Maine law, including a statute of limitations. It says the statute of limitations is usually six years from the time a debtor last made regular payments.

Debts older than the statute-limit age are often called time-barred debts. The debtor is not off the hook for the amount of the debt; collectors can still try to get a debtor to pay at least a portion of the amount due, but they may not have all the legal tools allowed in cases of more current debt.

Then there’s something called the “re-aging” of old debts. In the case of a really old debt, the statute of limitations clock can reset if you make even a single, small payment.

The guide suggests either ignoring demands to settle ancient debts or fighting such claims with the aid of an attorney; the attorney can help with language for a letter saying you don’t recognize the debt and asking for verification including the last date a payment was made.

There’s a lot more advice in the guide, available at maine.gov/pfr/consumercredit/publications.htm.

Consumers in Maine can request a printed copy by calling Bureau of Consumer Credit Protection at 800-332-8529 or writing to Bureau of Consumer Credit Protection, 35 State House Station, Augusta, ME 04333. The bureau also maintains a list of debt collectors who are licensed to do business in Maine.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

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