In 2016, third-party debt collection agencies helped creditors recover an estimated $78.5 billion in total debts. Dealing with a customer who won't pay for products purchased or services provided can be really frustrating. In a situation like this, taking a legal and calculated approach is advisable to recover your money without violating consumer protection laws.
If you are a small business trying to recover debt from your customers, consulting with an experienced Virginia debt collection attorney is crucial for proper guidance. Our attorneys at AP Law Group, PLC can represent your best interests and determine the right strategies to help you recover payment. We proudly serve clients throughout Falls Church, Alexandria, Arlington, Manassa, and Fairfax County, Virginia.
There are several laws that businesses must comply with during their collection efforts:
The federal Fair Debt Collection Practices Act prohibits debt collectors from using any abusive, false, harassing practices, or misleading representation in an attempt to recover debts from consumers. It requires creditors to comply with specific communication requirements when collecting debts
The federal Fair Credit Reporting Act helps to ensure the accuracy, fairness, and privacy of all customer information collected by consumer reporting agencies, such as credit bureaus. The law regulates the way credit reporting agencies are able to collect, access, use, or share data available in consumer reports.
The Virginia Consumer Protection Act aims to promote fair and ethical standards of dealings between suppliers and the consuming public. The law regulates trade practices, representation of goods and services, and product safety.
Consumers are protected from abusive or harassing debt collection practices by the FDCPA. When collecting debt in Virginia, the debt collector must avoid the following actions:
Pretend to work for a government agency
Use false statements or misrepresentation
Issue arrest threats to the debtor
Publicly shame consumers into paying the debt
Harass the debtor through the threat of violence, constant calls, and demand letters
Contact the debtor at an unusual time or place, or at an inconvenient place or time
Also, if the debt collector knows that an attorney is representing the debtor, they must contact the debtor's attorney instead.
Pursuant to Virginia Code § 16.1-79, a creditor may file a "warrant in debt" action at the local General District Court of the debtor to recover money owed. Receiving a document titled "warrant in debt" indicates that an individual or business has been sued in Virginia General District Court (GDC) to recover an outstanding financial obligation. A debt collection claim must be filed within three years from the date the last payment or business transaction occurred.
Creditors who want to force the debtor into paying their debt must first seek a judgment from the court. The judgment is a court declaration that gives the creditor the legal right to recover debt from the debtor through wage garnishment, a lien on the debtor's property, or levy on the debtor's bank account. By placing a lien on the debtor's property, the debtor may sell the property and pay the judgment (or creditor) out of the proceeds.
When a debtor files for bankruptcy, the Virginia court places an "automatic stay" on their existing debts. The automatic stay protects the debtor and prevents creditors and debt collectors from collecting payments, garnishing your wages, or creditor harassments. As a creditor, you should:
Cease any collection efforts, including phone calls, text messages, or lawsuits
File a claim or proof of claim with the court
Share information with the trustee (an independent contractor appointed by the court to oversee the bankruptcy case)
Monitor the progress of the bankruptcy case.
Timely payments are essential to the health of your small business. Unfortunately, you're likely to encounter certain customers who constantly fail to pay for goods and services provided to them. Hiring a knowledgeable creditor rights attorney is important to protect your rights to recover debts from your customers.
At AP Law Group, PLC, our attorneys have dedicated their careers to providing outstanding representation in matters of unpaid accounts. Our attorneys will evaluate the debtor and determine the legal collectability of your claim. We will prepare your case and negotiate with the debtor on your behalf. If necessary, we will aggressively pursue your debt by filing a lawsuit against the debtor.
As your collection attorney, we can seek a judgment in your favor and take further collections actions to ensure that the debtor upholds the judgment terms and makes payment accordingly. Our team will handle the situation in accordance with applicable laws while ensuring that these laws are not violated during the debt collection process.
If you're trying to recover debts from your customers or understand creditors' rights, contact AP Law Group, PLC today to schedule a one-on-one consultation. Our attorneys will review your case and offer you the experienced legal guidance and advocacy you need. We are proud to serve clients throughout Falls Church, Alexandria, Arlington, Manassa, and Fairfax County, Virginia.