Financial debt is a stressful obligation that is carried by many Americans. It becomes all the more stressful when a person or institution to whom money is owed (a creditor) hires a debt collection agency to collect from the person owing the money (the debtor). However, the federal Fair Debt Collection Practices Act (FDCPA) provides many important protections for debtors from their creditors and collectors. As noted below, citizens of Maryland have additional protections accorded to them in state law.
Debt Collection in Maryland
In the state of Maryland, debt collection laws are governed foremost by the federal statutes set forth in the FDCPA, but also, at the state level, in the conditions and laws set forth in the Maryland state commercial law code, Title 15, under Debt Collection-Special Provisions.
Maryland Statute of Limitations
In the state of Maryland, specific statutes regarding the lifetime of a valid, legally enforceable claim on a debt are known as debt collection statute of limitations periods. These periods of time, once expired, extinguish the right of original creditors and debt collection companies to collection on debt claims through civil action, which effectively erases the debt obligation on behalf of an individual debtor. These relevant statute of limitations periods in the state of Maryland include:
- Promissory notes, instruments under seal, bonds, judgments, and any other forms of contracts under seal possess a statute of limitations period of no more than twelve (12) years
- Civil action awards have a statute of limitations period of no more than three (3) years from original date of default in payment
- Breach of contract stemming sale of goods has a statute of limitations period of four (4) years
- Any financing statement has a statute of limitations period of twelve (12) years with option of continuance allotted if continuance statement is filed six (6) months before end of first statute of limitations period
Collections Practices and Rules for Maryland
The state of Maryland specifically outlines fair debt collection practices under their commercial law code, Title 15, Subtitles 1 through 8. Under Maryland law, a creditor or a debt collection agent may only contact the debtor under certain conditions. Federally, these conditions only apply to debt collection agents, and not to creditors. As with federal law, the collection agent is to follow up with a letter to the debtor within five days, confirming the initial communication and specifying in writing the money owed. Furthermore, creditors and debt collection agents in Maryland must not disclose a debtor’s debt unless there is a “legitimate business need.” Finally, in a greater way than in other states, debtors in Maryland have the right to file suit against the creditors and collection agents, and to collect damages from them based upon the “emotional stress” caused by the latter’s actions.
Legal Collections Actions
- Legal collection actions by debt collectors allow for contact them by mail, email, fax, or phone;
- Phone calls during “reasonable” hours, understood as 8:00am-9:00pm, unless otherwise instructed by debtor to contact at different hours;
- Requires documentation of debt obligation, including original creditor’s documents regarding a debt, as well as total amount owed and other considerations
Illegal Collections Actions
- Collection actions deemed illegal in the state of Maryland include all those mentioned in the federal laws related to debt collection practices, which include consumer protections from abusive, threatening, or harassing language
- Debt collectors cannot engage in fraudulent, deceptive, or unfair business practices during the collection of a debt, including manipulating documents related to original creditor, original dates of debt obligation, or total amount owed
- Debt collection companies cannot publicize, disclose, or any other way advertise the existence of a debt in order to shame or embarrass an individual debtor into payment
- Debt collection companies cannot threaten legal action without the intention of taking such a legally enforceable action
- Debt collection companies that violate any number of both state and federal debt collection consumer protection statutes may prove ineligible to lay claim on a given debt, as well as potentially face claims by consumers in the civil courts for harassment and other violations, including penalties and fines for violations from the state attorney general’s office
Laws for Debt Harassment in Maryland
Harassment by debt collectors, which if deemed harassing by a reasonable person, is illegal in the state of Maryland. These practices, which may include use of abusive, threatening, or violent language, intimidation practices, incessant calling, or use of automated calling in order to harass or intimidate are all illegal. Consumers facing harassment from debt collection companies or agents do have legal recourse. By filing complaints against debt collection companies, a debtor, if their claims are found valid, may invalidate a given company’s claim to a given debt, as well as collect damage awards stemming from the harassment.
Maryland Debt Negotiation and Settlement Rules
Several aspects of commercial and business law govern debt negotiation and settlement in the state of Maryland. Foremost, the actions taken during the collections process must be legal and otherwise in accordance with state and federal collections actions, if a valid settlement is to be arranged. Secondly, debtors should be aware of statute of limitations periods regarding their debts. In cases of debtors reaffirming debts through agreements to pay via oral or written contracts, the statute of limitations period on all debts in Maryland is extended by another three (3) years. Having an attorney assist during any debt negotiation or settlement action is important. An attorney specializing in debt settlement cases in Maryland can assist consumers with important and sometimes overlooked matters involving debt settlement, such as:
- Ensuring the legality and validity of a debt collection company’s claims, including their relationship with the original creditor
- Negotiating the settlement of a debt via a lump sum payment or through negotiated payment plans, which can often result in a large reduction in the total amount owed, if negotiated by legal counsel
- Ensuring the appropriate reporting of a debt obligation’s status to the correct credit reporting agencies
- Stopping collections actions and court actions taken by debt collection companies
Help from a Maryland Debt Collection Attorney
Because Maryland affords debtors greater protections that in other states, this is even more reason to hire an attorney. It can be difficult to prove that you have been harassed by a debt collection agent or creditor, but an experienced lawyer can help. Under both Maryland and federal law, the debt collection agent may no longer call you without your consent; they must deal directly with your attorney. Finally, your lawyer can also provide you with peace of mind as they negotiate a payment plan that you can afford. Being contacted by a debt collection agent is intimidating, but it does not have to be. A lawyer who knows Maryland law can shield you from harassment, and help you to pay back what you owe, legally and affordably.