They must follow several rules and regulations, including the Illinois Employee Credit Privacy Act, the Illinois Collection Agency Act, and the Fair Debt Collection Practices Act.
If you are concerned about being pursued by a collection agency, please contact the Chicago, Illinois credit repair team at The Phenix Group for more advice.
Rules for Illinois Collection Agencies
A statute of limitations prevents collection agencies from suing individuals after a certain period.
How long before debt becomes uncollectible in Illinois? If you have a written contract relating to the debt, it is no longer collectible after ten years–this drops to five years for unwritten agreements.
There is also the potential that you will win legal action; notice of legal proceedings does not automatically mean you will lose. A collection agency may have purchased the debt from the original company or service provider. They must provide evidence of the debt and proof that it remains outstanding, including:
- Proof of assignment showing any transactions where the debt has been bought or sold before the legal action began
- Written contracts–the collector will need a copy of the original agreement that shows the details of the loan or financial product
- Timeline of events–if a collection agency has not complied with the various regulations and codes of practice, a court may dismiss the case
While being contacted by a collection agency can be stressful, there are many things you can do to protect yourself from legal action and prevent the matter from escalating to this level.
How to Deal With a Collection Agency in Illinois
Debt collectors must provide a written notice within five days of their initial contact, detailing what you owe, to whom, and what to do if you wish to dispute the debt.
If you do not believe that the debt is owed, you can send a letter within thirty days of first contact stating that you do not owe the amount they are attempting to recover; the collection agency is not permitted to contact you further. However, if the collector can provide proof of the debt, they can resume activities.
Collection agencies cannot:
- Harass you or make threats
- Make incorrect claims, such as implying that you have broken the law
- Behave unfairly, such as charging excessive fees
You can also instruct the collection agency not to contact you; they can issue notices of formal action but cannot make any further contact. If the debt collector breaches any of these rules, you have the right to sue them (or counter-sue) within one year of the violation.
What to Do if You Have Been Contacted by a Debt Collector
If you have been contacted by a collection agency or received notice of potential or pending legal action, the next step is to speak to a professional as soon as possible. In some cases, you may not have a legally valid claim against you, and in others, you should respond as quickly as possible to put a repayment plan in place.
Ignoring a collection agency letter or legal notice is never wise. This inevitably will mean that the debt collector will proceed with any ongoing formalities, which could, in the long run, cause much greater damage to your credit rating and financial position.
At The Phenix Group, we offer a free consultation process where one of our credit experts can assess your circumstances and create a targeted action plan to help you move forward.