The average American has over $10,000 in personal debt, according to a February 2011 article on the Money Talks News website by Karla Bowsher. The highest levels of debt were found in the Northeast. If you are in debt and it is spiraling out of control, you have doubtless wondered what the laws on debt and loans are. Familiarizing yourself with these laws will give you firm legal ground to stand on in the event that you need to fight.
Statute of Limitations
Your debt is subject to a statute of limitations. This means that your creditors have a certain amount of time to collect your debt. After the clock runs out on this, the creditor can attempt to bring you to court, but you can use the statute of limitations as an affirmative defense. The state of limitations varies from one state to another, so check into the laws where you live. Remember that the statute of limitations running out does not prevent your creditors from sending letters, calling your home or using other legal means to collect the debt.
Illegal Practices
Federal law prohibits a number of practices by creditors under the Fair Debt Collection Practices Act. Creditors cannot harass you by using foul language, threats of violence or repeated phone calls. They are prohibited from making any false statements to you or anyone else regarding your debt. The law prohibits creditors from sending you postcards or any correspondence designed to look like it comes from a court when it does not. You may be eligible to receive damages in civil court if the law is violated.
Mortgage Law
There are several laws that pertain to mortgages. The Truth in Lending Act sets forth requirements for written disclosure regarding areas like finance charges, APR and your total payment, including interest. The Equal Credit Opportunity Act makes it illegal for you to be refused a home loan on the basis of race, gender, national origin, religion, marital status or age. The Real Estate Settlement Procedures Act requires disclosure from lenders to consumers for mortgages, home repair loans and home equity lines of credit.
Credit Report Laws
The Fair Credit Reporting Act describes a number of rights consumers have under the law regarding their credit report. You must be informed any time that your credit report is used to deny you credit or a loan. This includes the right to know which credit agency's report was used. You have the right to look at your credit file, including one free credit report per year. The law provides a method for resolving disputes that you may have regarding what information is in your credit file.
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