Rhode Island Debt Collection Laws

Since the passing of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act by the federal government in 1978, further associated laws on the state level have been created across the country. These laws protect individuals and businesses throughout the debt collection process, debt settlements, and lawsuits. Harassment by debt collectors is especially targeted by these laws.

Debt Collection in Rhode Island

The Rhode Island Fair Debt Collection Practices Act, in addition the federal laws from The Fair Debt Collection Practices Act and the Fair Credit Reporting Act provide ample protection for debtors. The federal stipulation for wage garnishment of no more than 25% is also followed in Rhode Island. However, the interest rate is state specific. The maximum legal interest rate in Rhode Island is 12%. Rates at 21% or higher are generally considered usury.

Rhode Island Statute of Limitations

After any violation of the law occurs, there are specific windows of time in which charges can be made against those at fault, and these are state specific laws. When dealing with debt collection, time restrictions begin on the date of the first missed payment, instead of the previous realized payment. In addition, these specifications are applicable to a contract's place of origin, no matter where the individual currently lives. In Rhode Island, the limits are:

• 10 years: Oral Agreements
• 10 years: Written Contracts
• 10 years: Promissory Notes
• 10 years: Open Accounts (credit cards)
• 1 years: Debt harassment charges

Collections Practices and Rules for Rhode Island

Before any debt collection can be made by any business or organization in Rhode Island, the collector must gain registration with the state government. These registrations cost $200 and are valid for three years. Collection through wage garnishment is legal in Rhode Island, but not against those who are in active military service. In addition, those who are currently receiving federal or state financial assistance can be exempt for up to one year after the judgment.

Legal

• Appropriate and respectful telephone calling between 8:00AM and 9:00PM
• All actions specified in a prearranged written contract
• Disclosing the nature of the debt, if only to a spouse or legal professional

Illegal

• Physical or emotional trauma causing threats to the debtor or their family
• Continued contact by collectors after a written request has been made to halt the communication, unless to propose special arrangements
• Use of any false, deceptive or misleading means

Laws for Debt Harassment in Rhode Island

The Rhode Island Fair Debt Collection Practices Act deals with debt harassment very similarly to the outlines of The Fair Debt Collection Practices Act and the Fair Credit Reporting Act of the federal government. These acts thoroughly distinguish improper practices are effective in deterring debt collectors from their use, with fines of up to $1,000 along with possible court fee payments. But unlike federal regulations, in Rhode Island this fine does not multiple with the number of violations in one lawsuit. In addition, these penalties can be avoided if within 15 days of the proposed chargers, the debt collector corrects their violating practice or practices.

Rhode Island Debt Negotiation and Settlement Rules

Debt negotiation and settlement are unique processes, which don't warrant their own regulations. Instead, all laws regarding debts and payments are applicable. This is a very desirable option for many because it can sometimes quickly remove and or reduce debt, but there is much to take into account. Often debt settlement companies are designed to prey on struggling debtors, charging them fees that end up as larger than their original debt. When arranged properly, often with a lawyer, these can result in successful repayment plans that usually include one or more lump sum payments and possibly further payments are a lower rate. Such plans are especially beneficial for a few reasons:

• Can be coordinated with one's specific financial outlook
• In some cases, helps to consolidate outstanding debts
• Completely removing a debt relieves the stress of payments and the collector's reminders

Help from a Rhode Island Debt Collection Attorney

Debt settlement negotiations can be complicated and stressful. There are many different options for attempting a settlement, such as a debt settlement company or direct arrangements with the creditor. An experienced Rhode Island debt settlement lawyer will help a debtor determine the best available options for debt settlements or renegotiations, along with providing the knowledge needed to enforce the conditions needed for fair and proper settlement when negotiations do take place. They also become the only contact for debt collectors, rather than the debtor, alleviating their often-annoying communication attempts. When these attempts continue, a debt lawyer can effectively assess the nature of their actions, and determine if a case for debt harassment is plausible.