A comprehensive guide on Delaware Debt Collection Laws

Being aware of the debt collection laws is essential to protecting yourself and your family against various means of harassment and unjust practices.

It is important for both debtors and creditors to understand the collection laws and adhere to them completely.

Debt collection laws in Delaware highlight debtors’ and collectors’ rights and responsibilities to ensure fair and ethical practices in the collection process.

What is the debt collection process in Delaware?

Under Delaware law, creditors may contact debtors when they miss payments. After attempting for about six months, they may hand over the debt to collection agencies.

The debt collectors may start contacting debtors, adopting various means to recover the debt amount. However, there are certain measures that debt collectors can and cannot take while attempting to recover the amount.

Debt collectors may go to court seeking legal judgment to recover the debt amount, like wage garnishment.

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Delaware Statute of Limitations on Debt

The statute of limitations establishes the deadline within which creditors or collectors can file a lawsuit against a debtor in order to seek repayment of the debt. Once the period is over, even though debtors are still responsible for the debt, creditors or debt collectors can no longer file a debt collection lawsuit against the debtor.

Statute of limitations differ depending on the different types of debts and differs from state to state.

According to the Delaware statute of limitations on debts are: four years for open accounts, like credit cards, three years for written contracts, three years for the sale of goods, and six years for promissory notes.

Furthermore, the statute of limitations on a debt starts from the first missed payment for the debt and not from the last date the payment was made. Any payment made towards the debt will restart or waive the statute of limitations.

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Fair Debt Collection Practices Act

Debt collection agencies in Delaware must abide by the Fair Debt Collection Practices Act (FDCPA). The law limits how debt collectors contact and attempt to recover consumer debt.

It provides guidelines on what measures debt collectors can and cannot take when attempting to collect consumer debts.

Furthermore, in violation of the FDCPA, debtors can sue the collection agency or the debt collector for compensation and reimbursement of legal fees.

The enforcement of the FDCPA falls under the responsibility of the Federal Trade Commission. However, the involvement of the FTC in enforcing the Act is usually limited to exceptional and complex situations.

To enforce the Act, the FTC may use measures like filing lawsuits, issuing injunctions, and ordering violators to stop their actions.

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Delaware Debt Collection Laws- What Debt Collectors Can’t Do?

In Delaware, debt collectors are not permitted to do the following:

• Frequent calling for debt collection.
• Call at work or at times other than that requested by the debtor.
• Threatening to harm physically, property, or reputation.
• Using profane or offensive language while communicating.
• Hide or provide misleading information about themselves, the reason for communication, the creditor, the debt and amount, credit information, etc.
• Disclose debt-related details to anyone except spouse, parents, or guardians if under 18.
• Attempt to collect more than the initially owed amount.
• Misinterpreting the status or required action of legal documents.

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Delaware Debt Collection Laws- What Debt Collectors Can Do?

• Call between 8 AM to 9 PM.
• Contact the debtor’s employer if the residence address or contact information is unavailable.
• Inform the debtor’s spouse about the nature and status of the debt.
• Inform the debtor’s parents or guardian about the debt in the case of a minor.
• Contact the debtor’s attorney, creditor, or debt collector’s attorney without the permission of the debtor or court.
• File debt collection lawsuit in Delaware.

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How to Deal with a Debt Collector in Delaware

Check the legitimacy of the debt and the debt collector.

The first and foremost step when a debt collector contacts is to check its legitimacy.

Debtors must ask the debt collector to provide information like their name, the collection agency, and the debt details.

Request for a debt validation letter

Ideally, debt collectors should provide debtors with a debt validation letter within the first five days of contacting the debtor.

A debt validation letter must state important debt-related details like the original creditor, the amount owed, etc.

Failing to provide the details of the original creditor may cease the collection process.

Gather information related to the debt.

Debtors must collect necessary information related to the debt from their end before making any payments. For instance, the last time any payment on the debt was made. If the debt has passed its statute of limitations, the debt collector may be unable to file a lawsuit.

Dispute or create a repayment plan

Debtors have the initial 30 days from receiving the debt validation letter to dispute the authenticity of the debt.

Creating a debt repayment plan can be helpful if the debt truly belongs to the debtor and is within the statute of limitations. For unsecured debt like credit cards, private student loans, etc., debt relief programs like debt consolidation or debt settlement can be helpful.

Seek professional help

It can help to contact an attorney to seek professional advice. An attorney specializing in debt collection laws can guide debtors if unfair debt collection practices were followed, provide guidance on the debtors’ rights, and assist in handling the situation.

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Closing Thoughts

It is essential for both debt collectors and debtors to understand the laws stating the dos and don’ts of debt collection to stay protected and follow practices that are ethical.

Delaware debt collection laws outline specific measures to protect consumers from harassment and unfair means of debt collection by debt collectors. Understanding the debt collection laws can help navigate the debt collection process with more knowledge and ease.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified attorney for advice on your specific situation.