State of Maine Enacts Provisions to Prevent Abusive Debt Collection Practices
by Robert Harrison, J.D.
October 1, 2015 The State of Maine amended provisions in regards to debt collection practices. Specifically, House Paper 753 aims to prevent abusive debt collection practices.
Payment schedules and settlements agreements must be in writing
Debt collectors may not enter into a payment schedule or settlement agreement unless:
- the payment schedule or settlement agreement is documented in open court; or
- approved by the court and in a court order; or
- reduced to writing.
If the court order does not include the payment schedule or settlement agreement the debt collector must provide, in writing, a copy of the payment schedule or settlement agreement to the consumer within 10 business days of it being entered into. The consumer is not required to make any payments on the payment schedule or settlement agreement until a written copy has been delivered by the debt collector.
Debt collectors may not initiate a collection action after the limitations period
Once a consumer has stopped all activity on a debt, a debt collector cannot initiate a lawsuit or arbitration to collect the debt from the consumer more than 6 years after that time. Shorter limitations periods under the laws of Maine will still apply. Once the 6 year limitation period expires no activity on the debt will revive or extend the limitations period. Debt collectors must not initiate a collection action if they know or reasonably should know that the 6 year limitations period has expired.
These provisions are effective on October 13, 2015 (or 90 days following adjournment of the legislative session).
About the Author
Robert Harrison, J.D. is a Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Boston University and earned his Juris Doctor at the Boston University School of Law. Robert is admitted to the Bar in Massachusetts. He can be reached at robert.harrison@bankersadvisory.com
Robert Harrison, J.D. is a Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Boston University and earned his Juris Doctor at the Boston University School of Law. Robert is admitted to the Bar in Massachusetts. He can be reached at robert.harrison@bankersadvisory.com
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