The Colorado Fair Debt Collections Practices Act applies to any collection agency, debt collector or solicitor in the state of Colorado or to anyone outside the state who attempts to collect from a consumer or business residing within Colorado.
Collectors must clearly identify his or her business and intent along with adhering to laws pertaining to how debt collection can take place:
- Collectors cannot communicate via postcard and cannot use correspondence on the outside of the envelope that identifies the company as a debt collection agency
- Unless given permission, debt collectors cannot pursue debtors at work and can only contact the debtor during the hours between 8am through 9pm.
- Creditors cannot harass or provide false or misleading information in an attempt to collect a debt
- If the debtor owes numerous debt and makes a payment toward the debt, the money cannot be used toward a debt that is in dispute
- Creditors cannot impose a fee or charge for collecting debt
Colorado debt relief law states that consumer rights information notice is required in writing along with validation of debts noticed to be printed on two separate pages and mailed or the debtor. Additionally, cash payments are accepted in Colorado and the collection agency must provide the consumer with a receipt for all cash payments within five (5) business days upon receiving the cash payment.
Colorado Statue of Limitations (SOL)
For an open account, the statue of limitations to collect on a debt in Colorado is three years. For a written contract, collection agencies have up to six years to collect. In terms of wage garnishment in Colorado, federal law applies, which is up to 25% of the worker’s wages. However, under federal law social security benefits or pensions are not subject to garnishment.
In addition to wage garnishment, the creditor has the right to take levy the debtor’s bank accounts to apply funds toward the judgment balance.
Colorado Credit Card Debt Relief Act of 2010
The Credit Card Debt Relief Act of 2010 has streamlined the methods for repaying debt and regulated how collectors work with debtors. The Act has impacted debt relief collections several ways:
- The number of fraudulent or weak performing credit card companies are gone
- Reduces the chances of falling victim to fraudulent debt settlement companies due to new Federal Trade Commission (FTC) reforms
- Increased, open communication from creditors--more information is provided to help you eliminate your loans
- Debt settlement companies cannot request upfront fees from clients