Debt Settlement and Debt Arbitration in Illinois
Illinois Credit Card Debt Settlement Laws
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One way to reduce your debt in Illinois is with debt settlement. Credit card debt settlement is a way to reduce your debts with the creditor or collection agency to only pay back a fraction of the original amount owed. This method works because you pay less yet the creditor still recovers some of their loss.
However, you may not have to even apply for credit card debt settlement if the statute of limitations is up in your state and the debt no longer appears on your credit report. Legally, credit companies must recover the debt in a period of time specified by the state or the debt is no longer recoverable after this time period. Read on to find out if the statute of limitations is up for you.
(This is intended to be a helpful and informational debt resource for Illinois consumers and does not constitute legal advice.)
Illinois follows the set of laws dealing with collection agencies (and law firms that collect debts) that are collectively known as the Fair Debt Collection Practices Act (FDCPA).
Debt collector cannot:
- Threaten to contact or contact a debtor’s employer unless the debt is more than 30 days past due.
- Threaten to disseminate or disseminate information regarding the debt to any third party other than a person who has a business need for the information.
- Attempt to collect a collection agency’s fee unless authorized to do so in the original agreement
- Take actions with intention of inflicting mental or physical illness to debtor or debtor’s family.
- At least 5 days prior to contacting the debtor’s employer, the debt collector must notify the debtor in writing of his or her plans to do so.
Maximum Interest Rate a Collection Agency Can Charge in Illinois: 5%
Illinois Wage Protection: 85% of net weekly income or 45 times the federal minimum wage
Statute of Limitations
A statute of limitations is a law that sets forth the maximum period of time, after certain events, that legal proceedings based on those events may be initiated. For debt, the statutes of limitation apply to the maximum period of time after a consumer has become delinquent on their payments. The key point to remember is that you are considered delinquent not from the date of your last payment, but rather the day after you have gone past due. In other words, if you made your last payment on 3/3/03 and your next payment was due the same day of the next month, the statute of limitations on the debt would not start running until 4/4/04. The statutes of limitations vary from state to state and depend on the type of debt and where the original transaction took place (i.e. if you took the loan out in Texas but currently live in Illinois, the applicable statutes of limitations would be Texas’).
Oral Agreements: 5 years
Written Contracts: 10 years
Promissory Notes: 10 years
Open Accounts (credit cards): 10 years
Whether you have unsecured credit cards, medical bills, personal loans or collection accounts, there’s help for you. The National Debt Relief Group offers a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.