Operations Guide: Out of Stat Debt

(This product is approved for DBA International Certification Credit. As a reminder, the deadline for debt buying companies to receive their CPRC designation is February 29, 2016.)

Debts have a shelf-life. From the moment a consumer defaults on payment, a clock starts ticking down. If the clock runs out entirely, the creditor or current owner of the debt cannot legally sue to recoup or collect on it.

That's an important distinction, however: a collection agency or debt buyer may not legally sue to recoup or collect a debt; that doesn’t mean that a collection agency can’t attempt to collect it at all.

This To the Point distills the information presented in our insideCompliance webinar. It comes complete with a link to the full video recording of the webinar -- great for use for all-staff trainings and quarterly in-services -- as well as a Certificate of Completion and the full transcript of the webinar. This is a great resource for tracking training, allowing regulators and clients to see your agency's commitment to continuing compliance and education!

Product: PDF Download, including link to webinar video and Certificate of Completion

Pages: 55 pp

Published: October 2015

Questions Answered

1. Is there any litigation/current issues on pulling credit reports on out of stat debt?
   
2. How do you determine statute of limitations if a borrower never does a payment but has had a defer of payment at one point?
3. I wonder how the regulators would respond if we gave a general notice about the statute of limitations in all cases? For example, we make no representation about whether your debt is outside the statute of limitations. But if it is, then you may not be sued for it, but the creditor may continue to report it to credit reporting agencies if allowed by applicable credit-reporting law.
4. Any consensus on which states statute of limitations to apply to credit cards? Our states have borrowing statutes but don’t seem to be insistent on if it is residence of debtor at time that account opened, location of bank, or where the payment is to be sent. So, if those are your options, what’s your safest pick?
5. What is the biggest pitfall that agencies should watch out for, if they are currently working or looking to get into out of stat debt? What advice would you give them, to make sure that they are staying on the right side of regulations as much as possible, knowing that there is almost nothing but gray lines throughout?

Table of Contents 

• About the Presenters

• How to Use This To the Point Guide

• Statute of Limitations: An Overview

• New York State Law: A Look at Specific Requirements

• Statute of Limitations: From a Regulatory Perspective

• Risks and Mitigations

• Encore Capital Group Consent Order

• Portfolio Recovery Consent Order

• Statute of Limitation Chart (up to date as of Nov 2015)

• Where Collection on Out-of-Stat Debt is Barred

• The Effect of Partial Payments

• Where Partial Payment Does NOT Revive the Debt

• Written Notification: Where and How?

• What Does the FTC Say About Out-of-Stat Language?

• Appendix A: insideOperations Out of Stat Transcript

• Appendix B: insideOperations Out of Stat PowerPoint

Contributors 

David Kleber, Bedard Law Group: David Kleber joined Bedard Law Group in 2015 after 20 years as a collections attorney, including 5 years as managing attorney of a national recognized firm. David is a frequent speaker and published author on such topics as bankruptcy and garnishment law. David is one of three Board Certified creditors’ rights specialists in the State of Georgia, and he has served as President of the Georgia Collectors Association.

Kelly Knepper-Stephens, Stoneleigh Recovery Association, LLC.: Kelly Knepper-Stephens is General Counsel and Chief Compliance Officer for Stoneleigh Recovery Associates, LLC, a debt recovery solutions company.  Her work focuses on government regulation, compliance, and civil litigation; she advises her employer and its clients on the FDCPA, FCRA, TCPA, GLBA, HIPAA, and other federal and state regulations.  She is a Debt Buyer Association International Certified Receivables Compliance Professional and has earned the Credit & Collection Compliance Officer designation from the American Collectors Association.