Consumer Law

New Mexico Rule Requires Debt Collectors to Disclose Time-Barred Debts

By Sam Glover

Debt collectors contacting New Mexico consumers must tell the consumer if the statute of limitations has expired. In other words, if a debt collector wants to collect a time-barred debt in New Mexico, she will have to say “we can’t sue you” first. Since clarity hardly favors the collector, the ACA recommends the following language:

We are required by New Mexico Attorney General Rule to notify you of the following information. This information is not legal advice:

This debt may be too old for you to be sued on it in court. If it is too old, you can’t be required to pay it through a lawsuit.

You can renew the debt and start the time for the filing of a lawsuit against you to collect the debt if you do any of the following: make any payment of the debt; sign a paper in which you admit that you owe the debt or in which you make a new promise to pay; sign a paper in which you give up (?waive?) your right to stop the debt collector from suing you in court to collect the debt.

“You can renew the debt . . . .” That may make some consumers think renewing a debt is a good thing, but I am guessing most will wonder why they would want to renew a debt that has expired.

If the New Mexico rule sticks, I expect we will see similar rules crop up around the country. Requiring debt collectors to do their jobs honestly should appeal to Democrats and Republicans alike.

(photo: http://www.flickr.com/photos/moneybernd/3858861114/)

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Full post as published by Caveat Emptor on January 03, 2011 (boomark / email).