H.R. 2704: Fair Debt Collection Improvement Act

The Fair Debt Collection Improvement Act aims to amend the existing Fair Debt Collection Practices Act. Here’s a breakdown of its key provisions:

Purpose of the Bill

The main goal of this bill is to establish clearer regulations regarding the collection of debt. Specifically, it seeks to prevent debt collectors from collecting or attempting to collect debts that are classified as "time-barred." A time-barred debt is one for which the statute of limitations has expired, meaning that a creditor cannot legally enforce the debt through legal action.

Key Provisions

• Prohibition on Collection of Time-Barred Debt: The bill explicitly states that debt collectors are not allowed to initiate or pursue collection efforts on any consumer debt for which the statute of limitations has expired. This protection is intended to prevent consumers from being harassed or pressured into paying debts that they are no longer legally liable for.
• Amendment of Existing Laws: The bill will modify the Fair Debt Collection Practices Act by adding a new section that outlines this prohibition. This addition requires amendments to the Act's table of contents to reflect the new regulation.

Impact on Consumers

If passed, this bill would provide consumers with additional legal protections. It would help shield individuals from debt collectors who may otherwise attempt to collect old debts that cannot be enforced in court due to the expiration of the statute of limitations. As a result, consumers could experience reduced financial pressure and anxiety from unwarranted collection attempts.

Implementation

Once the bill is enacted, it will require debt collectors to ensure that the debts they are pursuing are within the legal timeframe mandated by the statute of limitations. This will likely involve adjustments in their policies and practices to comply with the new regulations.

Relevant Companies

None found