PA Debt Collection Laws

For today’s blog post I want to talk about some general collection issues and terms that we get asked about quite often.   Let’s start with the Statute of Limitations.   The Statute of Limitations (SOL) for credit card debt in Pennsylvania is 4 years (3 years on some cases).   Well, 4 years from when, exactly?   The best guideline that I can give is 30 days after your last payment.  Once you stop making payments, you are in default.  Payments on credit card accounts are typically due every 28-30 days.  So once you miss a payment, the 4 year clock starts.

So many people who call my office are concerned with the SOL and I’m not sure why.  The typical caller says “Well, my last payment was 3 years ago so I’m going to lose”.   Nothing could be further from the truth.  The Statute of Limitations is used on less than 10% of the cases that we win.  Frankly, I bet its less than 5% if I were to really look at the statistics.  Just because they file on time does not mean that they are going to win and you are going to lose.   We have many other defenses that we use, including lack of standing, payment, lack of documentation, lack of privity or standing, unauthenticated documents and so on.   These are the defenses that win the cases for us, not the SOL.

Another issue that comes up quite often is a Writ of Execution.  This is bad stuff.   If you’re calling me about a Writ of Execution you are in pretty big trouble.  A Writ of Execution is an attempt by the creditor to enforce its judgment against your assets.  In other words, you were sued, you lost, and you still didn’t pay.   Look, I can help you when the lawsuit arrives.  In most cases (but not all) its difficult for me to offer much assistance after the judgment is entered and the case is over.  Now in some instances I can work a settlement for you, most times because of my professional relationships with the collection attorneys, but in certain cases there is nothing that I nor any other attorney can do for you.  The time to consult with and hire an attorney is when you receive the lawsuit, not 3 months after the judgment is already entered.

Moving on, let’s talk about the Fair Debt Collection Practices Act (FDCPA for short).  The FDCPA is a federal law that protects all of us from illegal debt collection activities.   Frankly, its a very strong law.  It limits the times and manners in which a debt collector can contact you.  It also protects you from harassment, from lying, from all sorts of misrepresentations from debt collectors.  In the event that a debt collector lies, misrepresents, harasses or in any fashion violates your rights, then you have the ability to file a lawsuit against them.  The great part about this federal law is that it provides you with a free attorney.  We don’t actually work for free, obviously, but our fees get paid by the offending debt collector.  This is a very powerful tool.  The more that they fight the lawsuit that you file, the more in legal fees that they will pay.  As you can imagine, this induces settlements all the time.

Wage Garnishment is another big issue.  Can my wages be garnished?  The answer in most cases is NO.  Pennsylvania has pretty strong protections with regards to wage garnishment.  A simple credit card debt is not one of the exceptions to the no garnishment rule.  There is a caveat there, and that caveat is that if you are sued in another state and a valid judgment is entered, and then that judgment is transferred to PA, then you can be subject to wage garnishment.  So, in essence, the rule is no wage garnishment unless you were sued somewhere else.  You cannot move to PA and expect to gain protection under the no garnishment rules.

I’d like to explain a few other wage garnishment issues.  First, there is no possibility of a wage garnishment unless they sue you and win.   In other words, you have to lose the case first.  Then, they would have to fit the case into one of the no garnishment exceptions (which credit card cases do not fit under).  So the threat of wage garnishment is illegal, its wrong, and it just cannot happen to a PA resident on a PA credit card case.   Having said all of that, there is one major exception to the no garnishment rule that comes before our office quite frequently….. Federal Student Loans.   If you default on a Federal Student Loan the Department of Education or one of its debt collectors can garnish your wages without a hearing.  This is called Administrative Wage Garnishment and it can be enacted after the debt collector sends a 30 day letter.  If you receive a letter from the Department of Ed or one of its collectors and it says that they are going to garnish your wages, CALL US IMMEDIATELY.  We can likely stop the garnishment and help to get you on a much better payment plan.

That’s it for today.  As always, call our office at 412-823-8003 for a free consultation on most consumer related cases.

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