The New York Times is reporting that more consumers will now be informed if old debts can be collected through the court or if they have passed the statute of limitations.
Bill collectors in New Mexico will be soon required to inform borrowers they can’t be taken to court for long-overdue debts, changing the landscape for consumers and creditors in the state.
A handful of states and cities have addressed the issue, which has gained attention from the Federal Trade Commission as debt-collector complaints have risen.
Since April 2010, New York City has required debt collectors to notify consumers in writing if the debt has passed the statute of limitations, known as “time barred.”
Statutes vary by state but nearly all have a time limit for credit-card debt.
In New Mexico, Attorney General Gary King adopted a rule in December requiring debt collectors to inform borrowers if the loan they are inquiring about has passed the statute of limitations—four years for most credit-card debt in that state. By law, lenders can’t go to court to collect on such loans.
Read the full story, here.
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