Virginia Debt Collection Laws

Debt collection law has become increasingly important to many Americans, as the population of debtors rises. The federal government passed the Fair Debt Collection Practices Act and the Fair Credit Reporting Act in 1978, outlining the improper practices of debt collection, and all other debt related practices. In addition to this, many states have passed even further regulations for these processes.

Debt Collection in Virginia

Virginia's code of laws includes some stipulations for debt collection, but no major section for debtor protection as federal law does. The legal interest rate and judgment penalty rate is 8% in Virginia. Unlike many other states, there is no usury interest rate limit for business or corporation loans or any loan over $5,000 in value to be used for business or investment purposes. In addition, unique to Virginia is the Homestead Exemption. This exemption entitles all residents of Virginia $5,000 worth of protection from most debt collection. However, once used entirely, this protection cannot be recovered or renewed in any way.

Virginia Statute of Limitations

A statute of limitations is the time restriction placed on bringing charges to court. These limitations vary depending on the specific fraction, and from state to state. When applied to debt collection, these limits apply to debts according to the first incomplete payment, instead of the last completed one. In addition, these laws are applicable to all contracts made in the given state, rather than either involved party's place of residency. In Virginia, these limitations are:

  • 3 years: Open accounts (credit cards)
  • 5 years: Written contracts
  • 5 years: Promissory notes
  • 3 years: Oral agreements

Collections Practices and Rules for Virginia

Because the law code of Virginia does not incorporate a dedicated debt collection section that includes outlines for protecting the rights of debtors, practices such as wage garnishment, the federal regulation of up to 25% or 30 times the federal minimum hourly wage is used. In addition, any violations to the federal debt collection laws warrant the federal penalty of up to $1,000 per violation, possibly to also include legal fees reimbursement.


  • Late charges of no more than 5% of the total debt
  • Communication to a debtor through their employer when no home address or phone number is available
  • Disclosing the nature of a debt to the debtor's spouse


  • Any state agency or officer attempting to enforce garnishment collection
  • Releasing an employee because of a garnishment they have acquired
  • Threats of any kind, physically or emotionally damaging, to a debtor or their family

Laws for Debt Harassment in Virginia

In Virginia, the federal guidelines for debt harassment from the Fair Debt Collection Practices Act and the Fair Credit Reporting Act provide ample protection for residents. These laws are imposed as stated in federal law code in Virginia, with violation fees of up to $1,000 per violation in addition to possible legal fee compensation.

Virginia Debt Negotiation and Settlement Rules

Debt negotiation and settlement are unique processes that result in a new contract between the debtor and loaning party. As such, the laws that regulate these practices are the same as those that control how new contracts are initial made, such as interest rate and garnishment limitations. Debt settlement is commonly sought by debtors because of the wide range of possible contract clauses, including lump sum payments, reduced payments, fewer payments, and even payment deferrals. Debt settlement companies offer an even simpler process of one single settlement; however, these businesses are sometimes fraudulent, aiming to gain much more than a fair payment from the debtor. In either situation, consulting with legal professionals is helpful to any of the possible benefits of debt negotiation and settlement, for instance:

  • Avoiding possible lawsuit by resolving the debt
  • Relieving continued payments with a lump sum payment
  • Coordinating remaining debt payments with a specific financial situation

Help from a Virginia Debt Collection Attorney

As debt settlement has so many possible benefits to those in debt, achieving the best possible results from such negotiations is important. A debt settlement lawyer helps to do this in a few different ways. Initially, they will help to alleviate stress from the situation overall by their communication with the creditor. When a debtor hires legal representation through a debt lawyer, debt collectors can no longer attempt direct communication to the debtor. In addition, the many intricacies of possible contract negotiations and any state specific regulations create a possibly difficult situation for debtors. A debt lawyer is skilled in assessing financial situations to find the best possible options to efficiently repay the debt and recover from any other pending debts.

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