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Notification requirements for collectors

There is no federal law requiring certain bill collectors to send a debtor notice of a debt that is owed. Many South Carolina consumers find out about debts only when they check credit reports, which may be months or years after the debt was originally incurred. There is a practice known as "parking debt" whereby a collector makes no collection efforts and waits to collect the debt until the consumer needs to obtain credit such as a mortgage.

The federal Fair Credit Reporting Act does require entities that regularly extend credit, such as financial institutions, to send notice prior to or within 30 days of sending negative information to a credit reporting agency. Many companies are exempt from this provision if they do not regularly extend credit. There is also a risk that the debtor won't find out until after the negative information has already been reported.

It is possible for debtors to dispute a debt that shows up on a credit report. Negative information is supposed to be about paying late and should not include information about a bill that the debtor never received. This can be done by contacting a credit bureau, preferably in writing. If the debt cannot be confirmed within 30 days, it must be removed. Negative information may also be removed if the debtor obtains an agreement that it will be removed if it is paid.

Consumers who are unable to pay back their debts may want to consider bankruptcy. The filing of a petition can often result in at least a temporary halt to collection efforts, and the successful completion of the process can give debtors a fresh financial start. There are several eligibility requirements that an attorney can outline.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
Suite 201
Columbia, SC 29201

Phone: 803-764-1558
Fax: 803-764-1563
Columbia Bankruptcy Office

Columbia Office

Charleston Office
925-D Wappoo Road
Charleston, SC 29407

Phone: 843-509-0039
Fax: 866-481-2325
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Charleston Office