Connecticut Debt Collection Laws

While debtors have an obligation to pay their creditors, when they are unable to do so, they have the right to be free from harassment by debt collection agencies. That protection has not always existed, but there are two primary federal statutes that provide such protection today. They are the Fair Debt Collection Practices Act and Fair Credit Reporting Act. These comprehensive laws may also be supplemented by state laws in various jurisdictions. However, the best solution to debt problems is to address them early and seek the help of an experienced debt settlement attorney to ensure that all efforts are legal and effective.

Debt Collection in Connecticut

While federal laws protect consumers from a wide variety of abusive debt collection procedures, they also prohibit that abuse by debt collectors, agents, or agencies. Connecticut has established state laws that in many ways merely confirm the federal statutes. However, they do restrain original creditors as well as debt collectors from abuse and provide avenues by which victims may seek relief through civil lawsuits. Those who experience such abuse may also file complaints with the state attorney general's office, the Federal Trade Commission, or a local district attorney's office.

Connecticut Statute of Limitations

  • Creditors and debt collection agencies may only file suit to recover loan payments within a 3-year state statute of limitations on oral agreements
  • The Connecticut statute of limitations on written contracts is 6 years
  • The state statutes of limitations apply only to court actions such as lawsuits; they do not limit the time when creditors can pursue normal means of contact with consumers

Collections Practices and Rules for Connecticut

In general, the majority of Connecticut debt collection practices are in harmony with federal statutes, prohibiting abusive, unreasonable, unethical, and unfair forms of harassment.

Legal Collections Actions

  • Personal visits, phone calls, emails, and faxes are all legal means by which creditors can contact consumers to collect past-due debt payments
  • Lawsuits to attempt debt collection, repossession, or garnishment of wages are legal, within the state statutes of limitations that apply

Illegal Collections Actions

  • Abuse, intimidation, profanity, violence or the threat of violence, are all prohibited forms of harassment
  • Repeatedly calling consumers during inconvenient or unreasonable hours
  • Pretending to be officials in law enforcement or the government to intimidate and force consumers to be more responsive
  • Ignoring cease and desist orders in writing and continuing to call consumers at their home
  • Ignoring requests to discontinue calls to the consumer's employer when debt collectors have been informed that such calls are prohibited
  • Adding fees, interest, or collection expenses to a debt claim without legal authorization
  • Using unethical practices such as cashing post dated checks early, contrary to agreements with the consumer, for their own benefit
  • Distributing or threatening to distribute the consumer's debt status

Laws for Debt Harassment in Connecticut

Both Connecticut and federal laws prohibit harassment of any kind and provide relief by reporting such actions to the attorney general of the state or the Federal Trade Commission, or by filing civil suits against offenders.

Connecticut Debt Negotiation and Settlement Rules

Debt negotiation and debt settlement companies provide debtors with a method of reducing debt and preserving some level of their credit rating. By negotiating with creditors who fear that the debtor is planning on filing bankruptcy and eliminating any opportunity for collection, these companies may be able to obtain a large reduction in the amount owed.

However, some companies are operated by con artists promising those services but charging high, up-front fees, delivering no value, and further damaging the relationships between a consumer and their creditors. This is fraud and a debt settlement attorney may be able to help consumers recover some of their losses. It is unwise to enter such agreements without consulting an attorney and asking them to examine their claims.

Help from a Connecticut Debt Collection Attorney

Debt collection agencies add a layer of complication to unpaid debt and the possibility of default, bankruptcy, and other damage to a person's financial future. In addition, there are layers of ownership in many consumer-debt relationships these days. It may be unwise and even impossible for a consumer to discover whom they should negotiate with to extend or reduce their debt balances. In addition, it may be impossible for them to avoid unfavorable tax implications of debt reduction or forgiveness without the help of a debt settlement attorney who is on their side.

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