The number of Americans in debt is rising, and along with it are the aggressive practices of debt collectors. In 1978, the federal government passed the Fair Debt Collection Practices Act and the Fair Credit Reporting Act to set guidelines for regulating these practices. However, since, many states have added further protection and regulations for all debt related processes.
Chapter 427 of Wisconsin’s law code, called Consumer Transactions - Debt Collection, outlines the state regulations. These, in addition to the federal regulations from the Fair Debt Collection Practices Act and the Fair Credit Reporting Act are applicable in Wisconsin. In addition, the legal rate of interest in Wisconsin is 5%, and a 12% rate on court judgments, unless regarding a real estate loan. In addition, there is no general usury rate.
The limits placed on the amount of time charges can be brought against someone after a violation occurs are called statutes of limitations. These effect most federal and state level laws, and are different for each law and between each state. Concerning debt collection law, the limits applied are active after the first missed payment, rather than the last completed one. In addition, a contract’s limit is based those of where the contract was created, instead of either party’s residence. Wisconsin holds the following limitations:
The penalties for violations to debt collection law in Wisconsin are similar to the federal amount at, twice the amount of the finance charge up to $1,000. However, Wisconsin has unique regulations for the practice of wage garnishment, with a lower allowed percent of 20% and a limited effective time period of 13 weeks. Unlawful collections of debt warrant a full reimbursement in addition to damage compensation.
The federal regulations provided by the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, in addition to the Debt Collection section of Wisconsin law regulate debt harassment in Wisconsin. They warrant compensation for any actual damage, along emotional anguish and mental suffering at no limit.
Debt negotiation and settlement are regulated by the same laws that apply to the initial creation of any contract because the processes are relatively the same. A wide range of possibilities exists for the creation of a new contract, because often the lending party is willing to do what is necessary for the debtor to repay their debt in full. Such things as one or more lump sum payments, lessened or reduced payments and payment deferrals are all possible additions to a contract. However, debt settlement companies can often be deceiving in their claims, and may end up costing a debtor much more than their original debt. However, successful negotiations, often occurring directly with the lending party, in addition to legal representation can result in many benefits, such as:
With the major assistance possible from a successful debt settlement, it is important to make sure that the process is done correctly. A debt settlement lawyer will not only guide a debtor through the process, but also make sure that the outcome is the most effective for both parties involved by accurately evaluating the financial situation as a whole. In addition, debt collectors can sometimes be very bothersome to debt collectors, and this is taken care of by the legal representation of a debt lawyer. Once hired, contact to the debtor by collectors may only be made through the lawyer.