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I get asked this question a lot.  And the answer is (like so many things in life) “it depends.”

In the past 20 years in the United States, many collection agencies that used to collect only debts for others started buying that debt (insiders call this debt “paper.”).  Sometimes the debt is very old (perhaps years beyond the statute of limitations which, in South Carolina, is typically 3 years from the last payment).

These debt collectors – or debt buyers more accurately – can sue you to collect this debt.  If you live in South Carolina, they will typically sue you in South Carolina in the County where you live.  Although they can sue for the amount of the debt, they can add no other amount not authorized by the original contract. In other words, a debt buyer can only get what the original creditor was entitled to under the contract.

Are there defenses to these suits?

Absolutely.  The easiest one is the statute of limitations.  Every state has a time limit for suing.  In South Carolina, an original creditor – or a debt buyer – has three years from your last payment to sue.  If they don’t sue in that time, you have an absolute defense.

A few warnings about the statute of limitations, though.  First, it runs from the date you last paid on the debt.  So, if you make a new payment (even for only 1 cent!!!) you can give the collector a whole new 3 years to sue you (this is why debt collectors sometimes try to trick you into making small payments “as a show of good faith” – don’t fall for it).

Second, if you make any written promise to pay, like with a payment, you’ll restart the statute of limitations clock all over again.  So, don’t do that either.

The last thing to remember about the statute of limitations is that it’s an affirmative defense.  That means if you get sued, and don’t answer – in writing – stating the statute of limitations has run, you lose.  It won’t matter how much time has passed.

How will you know if you’ve been sued?

You’ll get in the mail (or delivered by a Sheriff’s deputy or a process server) documents called “Summons” and “Complaint.”   You have 30 days from the date you get these to make a WRITTEN answer.  If you don’t, you lose.

OK, so now that you know about debt defense, let’s talk about playing offense.  While a debt collector – if it owns the debt – can sue you, you can also sue the debt collector (or original creditor).

What can you sue the debt collector for?

Lots of things.  Here are a few:

• Debt collectors cannot say or do “abusive” things.  They cannot curse at you, or call you names, or imply you are dishonest or a “deadbeat.” You can sue a debt collector for harassment.
• Debt collectors cannot contact you too often (more than once a day can be considered abusive).  Continued contacts after you’ve requested contacts stop can also be considered abusive, and violates the law.
• Debt collectors cannot tell other people about your debt.  Like your job, your friends, your family, or even your spouse.
• Debt collectors or creditors cannot make false statements to you.  That means they cannot tell you they will do something that they can’t legally do (or don’t intend to do).  For example, in South Carolina – where we have no wage garnishment for consumer debt  – a debt collector cannot tell you it will take money from your paycheck.  A debt collector also can’t say you will be sued if it cannot sue you (or does not intend to do so).

We’ve written more about debt collection harassment here.

These rules apply not only to debt collectors (whether or not they’ve bought the debt) but to original creditors like banks, credit card companies, and auto finance companies.   The federal Fair Debt Collection Practices Act covers debt collectors, and the South Carolina Consumer Protection Code makes these practices illegal for both collectors AND creditors.  And these rules apply even if you don’t owe the debt, such as when you’re an ID theft victim.

Do you have to wait to get sued if a debt collector or creditor is abusing you?

No!  You can bring your own complaint.  We rarely defend debt collection cases, and in the vast majority of abusive collection cases, our clients are the Plaintiff. We can help you in filing a lawsuit, because the best defense is a good offense.

Think you may be the victim of abusive collection conduct or harassed by a debt collector?  Click here to see if you have a case.