As more and more Americans fall into debt, the important of debt protection laws is growing each year. In 1978, the federal government created The Fair Debt Collection Practices Act and the Fair Credit Reporting Act to protect debtors from improper and unfair debt collection practices. Since then, many states have created additional laws, or entirely new state level acts to work in conjunction with the federal guidelines.
South Dakota is one of the few states that fully adopt the federal regulations for debt collection laws, outlined by The Fair Debt Collection Practices Act and the Fair Credit Reporting Act with no additions in their state law code. The Consumer Protection Division of the Attorney General's office of South Dakota provides a consumer handbook that outlines and further clarifies the federal specifications. Interest rates for consumer debts however, are state specific. The highest legal interest rate allowed in South Dakota is 15%, and interest on judgment penalties is set at 12%.
To avoid complexities stemming from outdated lawsuits, varying statutes of limitations are created to provide a specified time that any given charge may be brought against the proposed offender. When dealing with debt in South Dakota, there are many different ranges depending on the specific violation. These time windows begin from the first missed payment, rather than the final completed one. These regulations are applicable not to a debtor’s place of origin, but to the contracts place of origin. In South Dakota, they are:
Collection practices are entirely regulated by the federal standards, and warrant their penalties of $1,000 per violation and possible court fee payments. However, wage protection differs from federal regulations. It is slightly greater in South Dakota at 80%. In addition, these garnishments can only be made for 60-day intervals that can be continuously renewed. Any federal, state, or private financial support is excluded from any garnishment.
As debt harassment is a division of debt collection practices, it too is governed by the federal outlines from The Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Harassment charges allow the same $1,000 fine per violation with additional legal charges possible. As some states do not allow for cumulative charges, debt harassment can prove to be costly to collectors in South Dakota that use continuous and or multiple improper practices.
Debt negotiation and settlement rules are made by the existing debt related laws in a given state. Having no state regulations for debt or debt collection law, the federal regulations also apply for these situations in South Dakota. Generally, however, there are few laws that truly apply to this process other than interest rate limits, wage garnishment standards and the allowed collection practices of the state. Debt negotiations are heavily dependent on the individual parties involved. Usually, they are created to include one or more lump sum payments to either reduce or completely remove further payments. This entice option for debts can be dangerous because of fraudulent debt settlement companies. Direct negotiations with the creditor are often more successful along with the use of a legal professional. When properly done they are beneficial in some important ways.
Debt settlement is often a complicated process because of the negotiations required with either the debtor themselves off with a third party debt settlement business. Conflicts are probable over the type of repayment plan; however the collecting party is generally willing to create any arrangements that will most likely result in their full repayment. Depending on the situation, debt settlement lawyers can be completely necessary or simply a convenience. Once hired, collectors can no longer make direct communication with the debtor. It must be made through the lawyer. If communication continues, becomes harassment, or was previously, these lawyers are skilled in assessing what the best options are for possible lawsuits. When involved in negotiations they relieve the stress of dealing with debt collectors or the loaning party, helping the debtor to create the most effective and fair settlement for both sides.