Types of Debt
Categories of debts can vary greatly; however, most debts are considered consumer debts. Debt collection in Louisiana is subject to the Louisiana Fair Debt Collection Statute (LFDCS), as well as Fair Debt Collection Practices Act (FDCPA). A consumer debt, under the FDCPA, is generally one that is incurred “primarily for personal, family, or household purposes.” 15 U.S.C. §1692a(5).
An “open account” is defined as any account for which purchasers customarily purchase goods and services on credit and receive monthly account statements. A promissory note is any written note promising to pay a defined sum of money to a person in exchange for goods or services already provided.
Time Restrictions for Filing A Debt Suit
Filing suit over an unpaid debt does have a time limit. Different debts have different filing time requirements, called the statute of limitations. The statute of limitations for suing to collect debt on an open account is three (3) years and five (5) years for promissory notes.
Attempts to collect the debt
Louisiana law generally requires an “amicable demand” to be issued prior to the commencement of a suit. Louisiana also requires that all those who seek to collect a debt follow certain procedures and rules in communicating the debt collection attempts before filing suit. Some of the FDCPA and the LFDCS requirements include:
- Sending written correspondence to the debtor’s home address within 5 days of the first communication identifying who the debt collector is, who they are collecting on behalf of, and the balance owed. In addition, the correspondence must advise the consumer that they have the right to dispute the debt, and have 30 days to demand that the debt collector validate the debt.
- Communication to the debtor can only be for certain reasons, one of which would be to ascertain the whereabouts of the debtor when the creditor has reason to believe the debtor has changed his employment or has moved from his last known address.
Debt collectors are also limited by the LFDCA and FDCPA and may not:
- Call before 8:00 a.m. or after 9:00 p.m. or on designated days of rest
- Use any profane language or any language that is harassing and abusive
- Cause a telephone to ring an unreasonable amount of times
Debt Collection Lawsuit Process
The single most effective form of debt collection for any debt collector is the filing of a lawsuit. The judgment allows one to pursue assets and wages, and force payment through garnishing wages, garnishing or seizing funds from a checking or savings account, or placing a lien on personal property. In addition, an unpaid judgment continues to collect interest at a state specified interest rate.
Contact the experienced attorneys at Smiley Law today to handle all of your debt collection issues in Louisiana.