Legal Question in Credit and Debt Law in Iowa
is there a time limit for a collection company to collect debt?
Is there a law of limitations for a collection agency to collect a bill. We are being threatened by a company that insists a phone bill had not been paid. They say it's from 1992. We believe it has been paid but don't have a reciept to prove it. They will not send us a copy of the phone bill. They threatened to guarnish our wages, is this legal?
1 Answer from Attorneys
Re: is there a time limit for a collection company to collect debt?
They can't garnish your wages without a judgment, and they can't get a judgment unless they can prove that the bill is actually owed. They can't do that if the bill is more than 10 years old (on a written contract) and more than 5 years old (on an unwritten contract).
Generally the way to handle this is to tell them you are invoking your rights under the Fair Debt Collection Practices Act. This law gives you the right to tell them to stop calling you. Moreover, if they threaten to garnish you without telling you that they must get a judgment first, that violates the FDCPA and permits you to go after them for up to $1,000 in a civil penalty.
Write them a certified letter telling them to cease all communications with you as of the date of receipt. If you hear back from them after that date, then you may want to consider a Small Claims Court action against them.
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