Alabama Creditors and Legal Issues They Should Know
Debt is a fact of life, and those to whom it’s owed often depend significantly on the revenue associated therewith. Whether associated with medical services or the credit card industry, the financial health of your enterprise requires that you may—and potentially with the help of a collections law firm—collect on debt that is legitimately owed thereto. As many companies well understand, doing business is not an act of charity. That said, proper collections practices require that creditors and law firms representing them follow the law. On account of common law, state law and federal statutes alike, this is no less true in Alabama.
Whilst creditors are responsible for adhering to certain requirements, they also are entitled to legal protection, as well. So long as they follow the rules, they are allowed to pursue collection of debt via a variety of means.
Indeed, a Supreme Court case recently found that an Alabama woman could not legitimately sue a collections agency in spite of the fact that it had pursued debt after a six year statute of limitations had expired (in this instance, found to be legitimately attainable on account of prior bankruptcy). Ordinarily, the Fair Debt Collection Practices Act prohibits actions that might reasonably be interpreted as “false, deceptive, or misleading representation” or makes collection attempts via “unfair or unconscionable means.” A federal appeals court notified the Alabama woman that she might pursue redress against the creditor, Midland Funding, on account of said statute. On a 5-3 decision, the Supreme Court disagreed and thereby reminded those on both sides of the issue that creditors are not unconditionally liable for potentially controversial attempts made on behalf of collection.
Nevertheless, it is obviously essential that such creditors remain on the right side of the law in order to avoid potentially costly reprisal and legal action.
Legal Issues Creditors Should Look For
If you’re a creditor looking to collect debts owed thereto, there are a few things to generally consider. First, is there a verifiably open account or contractual agreement by which one party owes the other a debt in the first place? Second, has too much time passed since the closure of an account or last activity associated therewith? Depending upon the status of the account or contract, the statute of limitations for collection is generally between three and six years, while contracts under seal enjoy a limit of 10 years. Finally, the creditor must soundly demonstrate via documentation and support that a debt is in fact owed, and it must do so according to a burden of proof accordant with a preponderance of evidence regarding the nature and extent of debt owed.
While there are certainly additional and more detailed factors to consider, legal advisement may be helpful to clarify your rights and responsibility regarding the possibility of collection.
Finding the Right Legal Help
Alabama law isn’t one-sided. It considers the rights and interests of creditors, as well. If you require help in the pursuit of a debt that is legitimately owed to you, Cloud, Willis & Ellis has the pedigree and professional prowess to handle your affairs correctly. Reach out to us today for help.