How Collection Agencies Work in Georgia
Georgians have some of the highest debt levels in the country when it comes to auto loans and school loans, the latter of which is particularly difficult to discharge or eliminate, even in bankruptcy.
With so much debt, you would think the state's lending and collection laws would be lax, but that is not the case. Instead, the state of Georgia is one of only a few states that has banned predatory payday loans, and community organizations provide free services or bill payment aid to those in need.
If you have substantial due balances and fall behind on payments, you may get a letter in the mail or phone calls from debt collectors for collection activities. This call could be from your original creditor, or it could be from a debt collection agency that bought your debt from your original creditor. If it is from a debt collector rather than your original creditor, you should be aware that you have some legal consumer protection under federal law.
Below, we deep dive into how collection agencies work in Georgia.
What Collection Agencies in Georgia Can Do
State and federal rules in Georgia govern how debt collectors communicate with you, including when they can call you and what they can say. Even so, there are some things they can do that you should be aware of:
- They have the power to garnish your wages.
Debt collectors and agencies might launch a lawsuit against you in order to get a civil judgement for the debt you owe. This court order permits the collector to deduct money from your paycheck through a process known as wage garnishment. Collectors can only seize a portion of your discretionary income. After taxes and other deductions, your disposable income is the amount of money you have left over.
- They have the ability to keep charging interest on your debt.
A debt collector can continue to charge interest on your debt until a judgement is obtained against you. The prejudgement interest rate is the maximum interest rate they can charge you before receiving a judgement against you for the debt. This rate is determined by whether you and your initial creditor agreed to an interest rate in writing.
- They have the power to seize money or property.
A debt collector can also ask your bank to send them money from your personal bank accounts if they obtain a legal judgement. A collector can also place a lien on your property after receiving a civil judgement against you. A lien can be placed on real estate or personal items such as fine art or automobiles. If your loan is secured, debt collectors may be able to seize property that you bought with the money you borrowed.
What Are the Legal Protections Available to Georgians?
When an agency collects debt from small business owners or individuals, they put a lot of pressure. When payment deadlines are missed, calls will be made, maybe accompanied by letters warning of dire repercussions if the debt is not paid.
The Fair Debt Collection Practices Act (FDCPA) was established to protect consumers from deceptive practices such as making false statements, phoning other individuals about your debt, excessive collector contact, or collecting more than is owed.
State laws are also in effect to protect Georgians:
- The Georgia Fair Business Practices Act (GFBPA) protects consumers from unfair business practices. You may have rights under the GFBPA if the debt collector engages in unfair commercial practices. The GFBPA protects Georgia consumers by preventing companies doing business in the state from making false statements about their services or the services of another company.
- If a debt collector wants to secure a court judgement to collect a debt, they must do so by a specific date in Georgia. The statute of limitations is the legal term for this deadline. Debt collectors may lose their ability to collect on past-due bills if the statute of limitations has expired.
- Georgia law also protects customers by limiting the amount of money creditors can collect from you to repay the debt. Georgia law prohibits explicitly creditors from seizing exempt property.
- The Georgia Industrial Loan Act (GILA) is a consumer protection statute that governs debt collection for loans of less than 3,000 dollars. It includes many of the same safeguards as the FDCPA, such as forbidding collection agencies from threatening, harassing, lying, or engaging in unfair activities in order to collect money from a customer.
To Wrap It Up
Debt collectors are prohibited from engaging in abusive activities when attempting to collect on a debt by Georgia’s federal and state legislation. These legal protections ensure that although debt can be crippling, there are methods to get out from it, rebuild your finances, and hope for positive credit reporting results.