NM residents and the SOL

[bigun]

What is the name of your state (only U.S. law)?

Thought this article may be of interest.

(ALBUQUERQUE)---Attorney General Gary King announced today the adoption of a new Rule requiring debt collectors to inform debtors when a debt is so old that it is not enforceable through court proceedings.


The Rule, “Collection of Time-Barred Debt,” requires all debt collectors doing business in New Mexico to make a good faith determination of whether a debt is “time-barred” (beyond the judicial enforcement period established by the applicable statute of limitation). If the debt is time-barred, the debt collector must so inform the debtor in both written and telephonic communications. The Rule also requires the debt collector to tell debtors that they would “revive” the debt (start a new enforcement period running) by making a partial payment on the obligation in any amount, or by signing a written admission or new promise to pay.


"Under the state's Unfair Practices Act, the fact that a debt is so old that a person can not be sued to collect on it is considered material," says Attorney General King. "If it is material, New Mexico law requires that it be disclosed to the debtor. This Rule is intended to ensure that debt collectors provide important information to consumers so that they can make informed decisions when they are confronted with a demand to pay an old unenforceable debt."


Although the Rule is effective December 15, 2010, Attorney General King will not enforce the Rule for ninety days in order to give debt collectors the opportunity to implement the required changes.


The Attorney General's Office has been working for some time to develop stronger protections for consumers against unfair debt collection practices. Following lessons learned from previous litigation involving unfair collection practices it was determined that the agency would draft a specific rule to address the issue in New Mexico. The new Rule was then drafted by the AGO and the final regulation was published after hearings and comments from industry and consumer representatives.


NEW RULE IS PUBLISHED IN THE NM REGISTER AND AT NMAG.GOV

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[TigerD]

Doesn't that rule require collectors, who have no specific legal training, to make legal determinations and provide legal advice?

I look forward to see how it holds up under challenge.

DC

 

[Zigner]

Doesn't that rule require collectors, who have no specific legal training, to make legal determinations and provide legal advice?

No, it requires collectors to make a "good faith determination". If that entails having legal counsel on staff, then so be it.

 

[antrc170]

I don't see that the rule requires any need for legal training. The statutes outline the SOL on the debt. The rule requires that the company inform the person that the debt has exceeded the SOL for collection via courts unless a new agreement is made. There is no requirement to provide any type of legal advice either.

If the SOL is x years, any person can look at a date add x years and figure out the date the SOL expires. Since that is a simple funtion of addition then I don't see an argument for advanced training needed.

 

[Zigner]

I don't see that the rule requires any need for legal training. The statutes outline the SOL on the debt. The rule requires that the company inform the person that the debt has exceeded the SOL for collection via courts unless a new agreement is made. There is no requirement to provide any type of legal advice either.

If the SOL is x years, any person can look at a date add x years and figure out the date the SOL expires. Since that is a simple funtion of addition then I don't see an argument for advanced training needed.

Actually, it WOULD require legal training, as it really isn't that simple. There are a number of reasons why adding x years to the date may not yield a correct response.

 

[antrc170]

Zigner - as you pointed out that it requires a "good faith determination" of the SOL, not an exact determination. A good faith determination could easily be adding date plus x SOL, which would require no training. Legal counsel could certainly narrow the time down better than Joe Schmoe, but the rule doesn't specifically require any legal training.

 

[TigerD]

Zigner - as you pointed out that it requires a "good faith determination" of the SOL, not an exact determination. A good faith determination could easily be adding date plus x SOL, which would require no training. Legal counsel could certainly narrow the time down better than Joe Schmoe, but the rule doesn't specifically require any legal training.

The problem there isn't the good faith determination in house, but the requirement to provide that as advice to the debtor.

Once they are communicating their determination of the legal status of the debt, I find it difficult to believe that a consumer rights attorney isn't going to sue under the FDCPA for unfair practices and possibly pursue UPL charges.

This is another step in eliminating collections and forcing the system to go straight to legal process.

DC

 

[bigun]

I'd think the easy way to comply with NM law would be for in house counsel to pesonally vet the status of each NM account. If it appears to be beyond the SOL, don't assign it to a collector. Just deep six it or batch all SOL accounts together and sell them to another agency for whatever you can get.

 

[TigerD]

I'd think the easy way to comply with NM law would be for in house counsel to pesonally vet the status of each NM account. If it appears to be beyond the SOL, don't assign it to a collector. Just deep six it or batch all SOL accounts together and sell them to another agency for whatever you can get.

That is a lot of time and added cost. The CA would have to be able to add about $50-100 in collection fees to every collection account in order to make that work.

DC