The Fair Debt Collection Practices Act and the Fair Credit Reporting Act were passed by the federal government in 1978 to provide protection for debtors from unfair debt collection practices and outline proper practices for all debt related processes. Many states have since created further laws to account for increasingly aggressive debt collectors and a rising population of Americans in debt.
The West Virginia Consumer Credit and Protection Act outlines the prohibited actions by debt collectors and loaning entities for the state. These laws work in conjunction with the federal standards. In addition, West Virginia collection agencies must be licensed, with a surety bond of $5,000. The maximum contractual interest rate is 8%, and the general and judgment penalty interest rate is 6%. The usury rate in West Virginia is determined by market rates.
The majority of federal and state laws incorporate a statute of limitations. These are limits to the amount of time violations of the law can be brought to court for judgment. These are unique to every law, and can be different in each state. When dealing with debt laws, these limits begin with the first incomplete payment instead of the previously completed payment. In addition, the specific limit applied to a given contract is determined by the contract’s place of origin. West Virginia’s limitations for debt collections are:
For most collection practices, the laws of West Virginia mirror those of the federal government, which are also applicable in the state. For violations to collection practice law, West Virginia warrants equal penalties to the federal standards, of a maximum of $1,000 per violation. In addition, the federal regulation for the practice of wage garnishment, where the greater of 25% or 30 times the federal minimum wage is protected. However, unique to West Virginia is the ability of debt collectors to file for collection of a debtor’s personal property to compensate for unpaid debts.
The federal regulations provided by the Fair Debt Collection Practices Act and the Fair Credit Reporting Act are very similar to those existing in West Virginia’s state law code, providing excellent protection for debtors from unfair collection practices. The penalties for such actions are equal to those of other related violations at a maximum of $1,000 per violation.
The unique process of debt negotiation and debt settlement are governed by the same laws that apply to any contract negotiations in a given state, because this process results in the creation of a new contract to replace the initial one. Debt collectors are often flexible with these negotiations in order to allow the debtor the ability to repay their debt in full. They may allow for one or more lump sum payments, reduced payment rates or fewer payments and even payment deferrals. Even simpler are debt settlement companies, however these organizations are sometimes deceptive, causing the debtor to pay much more than their original debt in the end. Often direct negotiations with the lending party results in the most beneficial settlements. Legal consultation can also help to gain the possible benefits of this process:
Maximizing the benefits of a debt settlement is very important, especially for those with considerable debt. Debt settlement lawyer are useful throughout the process for many reasons. Once hired collectors must communicate with the debtor through their legal representation. Direct contact to the debtor becomes illegal, and can be considered debt harassment. When in debt negotiation, these specialized lawyers will have properly assessed the debtors’ circumstances, and can fairly determine the best options to propose to the lending party. There are many complexities involved in the creation of legal contracts that such lawyers can account for in order to reach the benefits desired by both parties in debt settlements.