Missouri Debt Collection Laws: A Vital Resource for Anyone Dealing with Debt

When you cannot make timely payments on your credit card, personal loan, or other types of debt, your creditor may send the outstanding balance to a debt collection agency, which can result in a distressing situation of regular phone calls and letters from the agency trying to recover the debt.

If you find yourself in such a situation, it is crucial to understand the debt collection laws specific to Missouri and your rights as a consumer.

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act is a federal legislation that regulates the actions of third-party debt collectors who purchase delinquent debt from original creditors like credit card companies.

This debt collection law is designed to provide consumers with vital safeguards against predatory tactics, such as making phone calls late at night, using intimidating language, and attempting to collect debts that are not legitimately owed.

The FDCPA has established the following guidelines for collection agencies:

• Collectors are not allowed to call you before 8 am and after 9 pm.
• If you have an attorney representing you, they must contact them rather than you.
• They must comply if you have requested that they not contact you while you are at work.
• They can only contact your friends and family to inquire about your contact information. Unless specifically asked, they are not permitted to discuss your debt or reveal that they are calling from a debt collection agency.
• Debt collectors are forbidden from using abusive language, issuing threats, or engaging in deceptive practices by misrepresenting their identity. They must disclose their identity as debt collectors before any debt collection attempts.
• They must comply if you have sent them a letter requesting that they stop communicating with you. After that, they can only respond to the letter by informing you that they are ceasing communication and about any future legal action they will take. Remember that if the debt is still within its statute of limitations, they can sue you even if they stop contacting you.

The Fair Debt Collection Practices Act (FDCPA) mandates that collection agencies must provide proof that the debt they are trying to collect is legal, belongs to you and that they are authorized to collect it on behalf of the original creditor.

When a collection agency contacts you, they must send you a written notice within five days of the first contact. If you don't receive this notice, you have the right to request a debt verification letter from them.

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Missouri Merchandising Practices Act (MMPA) and its impact on debt collection

If you reside in Missouri and are dealing with outstanding debt, you should know that the state law, known as the Missouri Merchandising Practices Act (MMPA), has been created to safeguard you against fraudulent and deceptive business practices. It applies to a variety of businesses, including debt collection agencies.

Debt collectors in Missouri are bound by the MMPA and prohibited from using fraudulent, unfair, or deceptive practices to recover outstanding debts. For instance, they cannot use threats, harassment, or false statements to collect debts or misrepresent the amount owed.

Additionally, if a debt collector violates the MMPA, you can file a lawsuit against them, which may entitle you to compensation in damages, attorney fees, and other remedies.

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Statute of limitations on debt collection in Missouri

The statute of limitations on debt is the maximum time creditors or debt collectors have to sue you in court to collect an outstanding debt legally. This time limit varies depending on the type of debt and the state in which you reside.

In Missouri, the statute of limitations on most types of debt is five years. So, if you have outstanding debt, the creditor or debt collector has five years from the date of the last payment or activity on the account to file a debt collection lawsuit against you.

If the five-year deadline passes, the debt is considered "time-barred," and the creditor or collector can no longer sue you for payment.

Remember that even if the statute of limitations has expired, the debt still exists, and you still owe it. The statute of limitations only affects a creditor or collector's ability to sue you in court to collect the debt.

The statute of limitations on oral contracts in Missouri is 6 years. For promissory notes, it is 3 years, and for open-ended accounts (credit card accounts, for example), it is 5 years. For written agreements, like personal loans, the Missouri statute of limitations is 10 years.

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How does wage garnishment work in Missouri?

Wage garnishment is a legal process where a creditor can collect a portion of your wages directly from your employer. The creditor must obtain a money judgment from a court before garnishing your wages, except for certain types of debt like taxes, federal student loans, child support, and alimony.

However, there are limits on how much of your paycheck can be garnished. Federal law limits the amount to 25% of your disposable earnings for that week, or the amount that exceeds 30 times the federal minimum hourly wage, whichever is less.

It's important to note that not all debt collectors can garnish your wages. For example, credit card companies must sue you and get a judgment before garnishing your wages. This can provide some protection, but it's still important to understand your rights and the legal limits of wage garnishment.

Missouri law limits how much a creditor can garnish from your wages in any given workweek. The amount they can take is determined by two factors: your disposable earnings and your status as a head of a family and resident of the state.

If you're not the head of a family or a Missouri resident, a creditor can garnish up to 25% of your weekly disposable earnings. But if you are, the amount they can take is reduced to 10% of your disposable earnings.

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How can consumers file a complaint against a debt collector?

If you feel that you have been mistreated by a bank, lender, debt collector, or other financial institution, you can file a complaint with the Consumer Financial Protection Bureau (CFPB), a government agency that aims to protect consumers.

The CFPB offers an online system on its website that allows individuals to submit their complaints.

Filing a complaint not only provides a way to resolve the issue but also helps the agency better understand the problems consumers face and improve its ability to enforce federal consumer protection laws.

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Dealing with overwhelming debt

Debt can profoundly impact our overall well-being. It doesn't just affect our financial stability; it can also impact our physical and emotional health. Unfortunately, aggressive debt collectors can worsen the situation when we fall into debt.

Thankfully, options are available to help individuals break free from this burden. Debt relief programs can provide a lifeline to those struggling to get back on their feet. These programs can help by renegotiating the terms or reducing the debt owed, allowing individuals to regain control of their finances and improve their overall quality of life.

Debt consolidation is a great option for people with multiple high-interest debts like credit card debt and payday loans. This process combined all these high-interest debts into a single low-interest debt with a reduced monthly payment.

Deb settlement might be a viable option for a single debt that has been eating away at your paycheck and mental health. Debt settlement means negotiating with creditors to agree on paying only a part of what you owe to settle your debt ultimately.

However, if nothing else seems to work and you are certain that you cannot repay your debts, bankruptcy may be your only option. Bankruptcy may have a negative connotation, but it can also be the only feasible solution for people overwhelmed by debt.

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Conclusion

Dealing with debt can be an overwhelming and stressful experience, especially if aggressive and deceptive debt collectors constantly hound you.

Fortunately, debt collection laws are in place to protect you from abusive practices. These laws not only prevent harassment and deception but also allow you to dispute and validate your debts.

While these laws may not eliminate the stress of dealing with debt, they offer some level of protection and support for struggling individuals.

You have multiple options to deal with overwhelming debt; do your research or contact a financial professional to determine the best solution for you.

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