Who Can Collect Debts in Virginia?

The state of Virginia does not have a debt collection act of its own and therefore complies with the Federal Fair Debt Collection Practices Act. The federal law, however, puts no real restrictions on who can collect a debt. It only places restrictions on how debt can be collected to ensure that debtors aren't unduly harassed or treated unfairly. As a general rule, anyone who is owed money can attempt to collect it, or he can have agents or agencies attempt to make collection for them.

Offset Program

The state of Virginia itself, before issuing state tax refunds or other programs, submits information to the U.S. Department of Treasury's Offset Program. This program was put in place to attempt to collect money owed to the Internal Revenue Service or other federal agencies. Under the program, the federal government can deduct money owed to it from state tax returns before those returns are issued to taxpayers.

Debt Collectors

The Fair Debt Collections Practices Act imposes restrictions on debt collectors and provides a definition of what it means by debt collectors. According to the act, a debt collector is an employee or officer of a creditor; any person attempting to collect a debt to which she is a party; or any officer or employee of any company that performs credit counseling services or obtains debt as part of a commercial transaction.

Notification

Anyone attempting to collect a debt is required to notify the debtor and verify the debt. Within five days of initial contact, a creditor or debt collector must present the debtor with written notice stating the amount of the debt and the creditor to whom the debt is owed. The statement must give the debtor 30 days to dispute the debt. The debtor has 30 days to notify the debt collector that the debt is disputed. If the creditor does not dispute the debt or any part of it, it is considered validation of the debt by the debtor.

Restrictions

The Fair Debt Collection Practices Act places severe restrictions on how debt collectors can communicate with debtors or attempt to make collections. Debt collectors cannot threaten debtors with the use of violence or other physical harm. They also may not threaten the person's reputation or property, use obscene, profane or abusive language or make public any list of debtors. For a list of other restrictions on debt collectors, read the Fair Debt Collection Practices Act (see Resources).