South Dakota Debt Collection Laws 101 - Know Your Rights

A call or a letter from a debt collector threatening legal action can feel like getting caught in a sudden storm.

But is it justified? And is the collection process fair? You should consider these questions if you ever face debt collection.

Find out the South Dakota debt collection laws and what debt collectors can and cannot do.

Here, you'll also find what you, as a debtor, can do if collectors fail to adhere to the standards of conduct set by the FDCPA.

South Dakota Statute of Limitations

The statute of limitations is the time limit for debt collectors or creditors to pursue legal action against debtors.

Here are the lawsuit filing time limits for various debts in South Dakota -

• Mortgage debt: 6 years
• Medical debt: 6 years
• Credit card debt: 6 years
• Auto loan debt: 4 years
• State tax debt: 3 years

The SOL clock usually starts on your first missed payment date.

If your debt is older than the predetermined number of years, as stated by the South Dakota SOL, debt collectors can no longer pursue legal action for that debt.

Hence, they won't be able to garnish your wages or place a lien against your home. What they can do, however, is continue to contact you and ask you to repay.

But just because the SOL has expired does not mean the debt collector won't sue you.

If the collector believes the SOL has yet to expire as per their record or that you won't be able to defend your case, they may still sue you.

If the debt collector sues you and you know the SOL has expired, consult an attorney.

Another thing to remember is that although SOL expiration saves you from going to court, it doesn't let your debt off the hook.

If you have a time-barred debt that you plan to let be, you should know that such debt stays as an account in collections on your credit report for seven years from the first missed payment.

So, if you have plans to take a mortgage or other loans, your unpaid debt will haunt your chances.

Paying off debt is always the best course of action. And, with the number of DIY and agency-assisted debt relief options available, there's no way you cannot come to a favorable agreement with your creditors and pay off your debt.

There's debt consolidation, debt settlement, debt management plans, and more.

Talk to an expert if you have questions or want a personalized recommendation for your debt.

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Regulations on Debt Collection Practices

Because you're behind on payment doesn't mean debt collectors can walk all over you and your rights. There are some legal boundaries that they must respect in their collection efforts.

According to the FDCPA, AKA the Fair Debt Collection Practices Act, here's what debt collectors can and cannot do -

There's a Time and a Place for Debt Collection

Debt collectors cannot contact you whenever and wherever they like.

For example, unless you agree, they cannot contact you before 8 AM or after 9 PM. Collectors also cannot contact you at your workplace if you explicitly instruct them not to.

How Can Debt Collectors Contact You

Collectors can communicate via phone, letter, email, or text. And when they do, they must identify themselves as who they are - debt collectors - and the reason they are calling you.

It's illegal for them to masquerade as someone working under the direction of an attorney or government agency and harass, threaten or deceive you.

What Counts as Harassment

• Using threats of violence or harm;
• Publishing your name identifying you as a delinquent debtor (but they can give this information to the credit reporting companies);
• Using obscene or profane language; or
• Repeatedly calling to harass you.

What Counts as Fraud

• Trying to pass themselves off as someone they are not;
• Falsely indicating that you are committing a crime by not paying your debt;
• Misrepresenting your amount of unpaid debt;
• Saying papers are legal forms when they aren't or giving the impression, they aren't legal forms when they are;
• Providing false credit information about you to a credit reporting company or anyone else;
• Claiming that you'll get arrested if you don't pay your debt;
• Threatening to seize, garnish, attach, or sell your property or wages when they aren't permitted by law or intend to do so; or
• Threatening to sue you, with no legal backing or right to do so.

Debt collectors are legally obligated to tell you the amount of debt and the creditor you owe money to in the initial communication.

If they fail, they are required to send you a written notice including the information within five days of initial contact.

Along with the above information, they should also tell you that the collector will take it to be valid if you don't dispute the debt within 30 days.

Can a Debt Collector Contact Anyone Else?

A collector can contact people other than you but only to inquire about your address, your home phone number, and where you work.

Collectors usually are only allowed to contact third parties once. And other than to obtain your location or contact information, a collector generally is not permitted to discuss your debt with someone other than you, your spouse, or your attorney (if you hire one).

Can a Collector Garnish Your Wages?

If a creditor or collector sues you and wins a wage garnishment judgment against you, then yes.

Armed with the court's judgment, the debt collector can direct a third party, like your bank, to turn over funds from your account to pay the debt.

In short, collectors can garnish your wages only after a court order.

Remember, don't ignore a lawsuit summons; if you do, you lose the opportunity to fight a wage garnishment case.

Other Unfair Practices

• Trying to collect any interest, fee, or other charges on top of the debt owed unless permitted by the original contract;
• Taking or threatening to take your property unless it can be done legally;
• Depositing a post-dated check early;
• Contacting you by postcard.

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What Can Debtors do?

What Happens If You Dispute the Debt?

If you dispute your debt and ask for verification, the collector must only contact you once they send you the documents proving their claim.

Can You Ask a Collector to Stop Contacting You?

Yes, you can. All you need to do is send a cease and desist letter.

After you send the letter, the debt collector can contact you only once to inform you that they'll no longer attempt to collect the outstanding balance or their intent to file a debt collection lawsuit.

But you should keep the communication going to see if you can resolve the matter, especially if you owe the debt.

If you stop communicating, you'll limit the information you get regarding the debt and the debt collector's next steps.

Ceasing communication also increases the chance of getting sued by the collector.

Hence, it's best to send a no-contact letter only if the debt collector is really stressing you out, your SOL has expired, it isn't your debt, or you plan to file bankruptcy.

Alternatively, you can hire a lawyer to represent you. In that case, a collector must talk to your attorney only.

What to do If a Debt Collector Fails to Follow the FDCPA Act?

If a collector in South Dakota fails to adhere to the FDCPA Act, you can sue them in a state or federal court within one year of the violation.

If you win, the judge will order the collector to pay you for any damages, like lost wages and medical bills. You also may be reimbursed for your attorney's fees and court costs.

You can also file a complaint to the FTC and the CFPB.

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The Bottom Line - Know Your Rights and Make an Effort

It's best to be vigilant of unfair debt collection practices, but it's also in your best interest to close your debt accounts.

No matter if the debt collector stoops down to unfair practices and you file a complaint against them and get a judgment in your favor, your debt will stay yours.

It won't go away any time soon, but with the right strategy, it can go away fairly easily.

Remember, there's always a way to be debt-free.

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