Maine Laws and Legal Materials

Our goal is to provide a brief, clear summary of the laws and legal information relevant to Maine. This article aims to simplify the rules and regulations specific to the state, making them easier to understand.

Maine Debt Collection Laws

As a consumer, you should file a complaint or take legal action if a debt collector harasses you or violates federal or state debt collection laws. The Maine Bureau of Consumer Credit Protection regulates debt collector licensing in the state. If you face any debt collection issues you can get help from Legal Aid organizations.

Federal Law: The Fair Debt Collection Practices Act (FDCPA) has rules about how debt collectors can communicate restrictions on harassment and abuse requiring written validation of debts and allowing consumers to dispute debts.

State Law: The Maine Fair Debt Collection Practices Act (MFDCPA) involves licensing requirements for debt collectors limits on how frequently they can contact you providing notice of your rights and prohibited practices by debt collectors.

Statute of Limitations in Maine

In Maine, the SOL (time limit) for collecting debt depends on the debt type. The SOL clock starts ticking from the date you missed a payment or defaulted. After the SOL expires, your creditor is not allowed to take you to court over that debt. But the debt will still show up on your credit report, and the creditor can try to get you to pay it back.

Written Contracts: For stuff like credit card agreements and personal loans with written contracts, the SOL is 6 years from your missed payment or default date.
Oral Contracts: For verbal agreements without anything in writing, the SOL is also 6 years from missed payment or default.
Promissory Notes: If you signed a promissory note agreeing to pay back a personal loan or other debt, the SOL is 6 years after you stopped making payments.
Open Accounts: For open-ended accounts like credit cards with no set end date, the 6-year SOL starts after your last payment or default.

Wage Garnishment and Exemptions in Maine

There's a limit on how much of your wages can be garnished (taken). It's either 25% of your disposable earnings or the amount over 40 times the federal minimum wage - whichever is less.
Some types of income can't be garnished at all, like Social Security benefits and unemployment benefits.
As a consumer, you have 30 days from when a debt collector first contacts you to dispute the debt and request verification that you actually owe the money.

Where To Get Help If You Face Abusive Debt Collection In Maine

To stop debt collectors from contacting you, send a "cease communication" letter to each agency and keep a copy for your records. By law, both federal and state, they then cannot try to make you repay the debt once you've told them not to contact you anymore. If they keep bothering you after that, report them to the Maine Bureau of Consumer Protection by calling 1-800-332-8529 or submitting a complaint online.

Debt settlement details in Maine

Debt settlement is a way for debtors to negotiate with creditors to reduce the total payoff amount and interest rate, making the debt more affordable. You can negotiate directly with creditors yourself or hire a debt settlement company to do it for you.

A debt settlement company will negotiate with your creditors on your behalf to reduce your payoff balance. They can usually get the principal amount reduced by 40-60% through their expert negotiating skills. But you'll have to pay the company upfront fees and monthly charges for their services.

Study out these resources if you want to learn more:

Debt help resources for consumers in Maine

Additional Consumer Law Resources in Maine

Bankruptcy Laws in Maine

According to the 2005 Bankruptcy Act, if you're filing for bankruptcy you need to go through credit counseling within 6 months before filing. You also have to complete a financial management instructional course after filing.

The 2005 Act says your income and expenses have to be analyzed to determine which type of bankruptcy you qualify for. You need to pass the means test which looks at your income to see if you're eligible for Chapter 7 bankruptcy. If your income is below Maine's median, you can likely file for Chapter 7. If it's above the median, you may have to file under another chapter like Chapter 13.

Types of Bankruptcy in Maine

Chapter 7: This is a liquidation bankruptcy for individuals and businesses. Any non-exempt assets get sold off to pay creditors.
Chapter 13: This is a reorganization bankruptcy for individuals with a steady income. It allows you to keep your property while repaying debts over a 3-5 year period.
Chapter 11: Reorganization bankruptcy that businesses primarily use. It lets them restructure and repay debts while continuing operations.

Federal Bankruptcy Code in Maine

Bankruptcy cases in Maine follow the federal bankruptcy laws laid out in Title 11 of the United States Code. If you need to file for bankruptcy in Maine, you will go through the U.S. Bankruptcy Court for the District of Maine.

Bankruptcy Exemptions in Maine

Maine opted out of using the federal bankruptcy exemptions. Instead, the state has its own list of exempt properties that can't be liquidated or sold off to pay debts in a bankruptcy. Some key exemptions include:

A homestead exemption up to a certain dollar amount
Exemptions for your motor vehicles
Household goods and appliances are exempt
Tools and equipment you use for your job are exempt

The specific dollar amounts for these exemptions are detailed in Title 14, Section 4422 of Maine's state laws.

You can find more bankruptcy information and frequently asked questions online. However, it's also a good idea to consult with a local bankruptcy attorney to understand all your options.

Living Trust law in Maine

A living trust, also called a revocable trust, involves 3 parties: the settlor (person setting it up), the trustee (manager), and the beneficiary (who receives the assets eventually). Its purpose is similar to a will - to transfer the settlor's property to the beneficiaries after death. But for it to be valid, the settlor must transfer ownership of all their property into the trust.

A living trust can help avoid the probate process, but it doesn't necessarily provide tax benefits unless it's an irrevocable trust. Property in a revocable living trust is still counted as part of the settlor's taxable estate.

Probate can be long and require court approval for transactions. A revocable trust allows quicker distribution of assets to beneficiaries. However, it takes time/effort to administer and may require filing tax returns. Creating a revocable trust in Maine can be expensive, and a regular will may accomplish similar goals for less cost. Discuss your situation with an estate attorney.

Key Types of Trusts:

Revocable Living Trusts can be changed/canceled by the settlor
Irrevocable Trusts cannot be altered once created, providing tax/asset protection benefits
Testamentary Trusts are created by a will and activate after death
Special Needs Trusts benefit the disabled without disrupting public assistance

Maine follows the Uniform Trust Code which provides rules for trust creation, administration, and termination. Trustees have fiduciary duties to manage trust assets properly for the beneficiaries' interests.

Learn more about Company formation in Maine

Maine Uniform Power of Attorney Act

Maine Uniform Power of Attorney Act provides standard rules for setting up and using power of attorney documents in the state. This act lays out the proper way to create these documents and how they should be handled. The aim is to protect both the person granting power of attorney (the "principal") and the person/entity being appointed as the attorney-in-fact (the "agent").

Conclusion

This guide covered some of the major Maine laws dealing with debt collection practices, living trusts, debt settlement options, bankruptcy procedures and power of attorney rules. The goal was to explain these legal topics in a straightforward, easy-to-understand way.

Be sure to check out the additional legal resources provided if you need more details on Maine's laws and legal system. Don't hesitate to learn about your rights as a consumer or resident and take action if those rights are violated. Having the facts can help ensure you are treated fairly under the law.

Updated on: June 7, 2024