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Debt Collection Laws in Tennessee: A Comprehensive Guide

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (FDCPA) is a federal law that governs the behavior of third-party debt collectors – it doesn’t cover original creditors. The FDCPA prohibits debt collectors from using abusive, deceptive, or unfair practices to collect debts from consumers. Some key protections include:

  • Debt collectors can’t harass or abuse you
  • They can’t lie or mislead you
  • They have to identify themselves as debt collectors when contacting you
  • They can’t discuss your debt with others without your permission

Tennessee has its own debt collection laws that provide additional protections beyond the FDCPA. We’ll cover those in detail throughout this guide.

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Statute of Limitations on Debt in Tennessee

The statute of limitations is the time period a creditor or debt collector has to sue you over an unpaid debt. In Tennessee, the statute of limitations on most debts is six years from the date you missed your last payment or charged the debt.Some exceptions:

  • Credit card debt: 6 years
  • Promissory notes: 6 years
  • Oral contracts: 6 years
  • Written contracts: 6 years
  • Open accounts/accounts stated: 6 years

So if you made your last payment on a credit card debt in January 2018, the statute of limitations would expire in January 2024 and the debt collector couldn’t successfully sue you after that date.It’s important to note that making a payment or acknowledging the debt in writing can restart the clock on the statute of limitations. Debt collectors may try to trick you into doing this, so be very careful.

Tennessee Debt Collection Licensing Requirements

Tennessee requires debt collectors to obtain a license from the state in order to operate legally. The licensing requirements include:

  • Submitting an application and paying fees
  • Obtaining a $10,000 surety bond
  • Undergoing fingerprinting and background checks
  • Maintaining a physical office location in Tennessee

Unlicensed debt collectors operating in Tennessee can face fines and penalties. You can check if a collector is licensed on the Tennessee Collection Service Board website.

Debt Collector Harassment Protections in Tennessee

In addition to the federal FDCPA prohibitions on harassment, Tennessee law prohibits debt collectors from:

  • Threatening violence or criminal prosecution
  • Using profane, abusive, or intimidating language
  • Calling repeatedly to annoy or harass
  • Contacting you at work after being asked not to

Debt collectors also can’t publish a “deadbeat” list or advertise your debt publicly. If a collector violates these laws, you can report them and potentially sue for damages.

Debt Collection Call Restrictions in Tennessee

Tennessee limits when and how often debt collectors can contact you by phone:

  • They can only call between 8am and 9pm
  • They can’t call you at work if you’ve told them your employer prohibits such calls
  • After being notified you’re represented by an attorney, they must only contact your lawyer

The law also requires collectors to identify themselves and state the purpose of the call. They can’t pretend to be calling for another reason.

Garnishment Laws and Debt Collection in Tennessee

If a debt collector sues you and gets a court judgment, they may be able to garnish your wages or bank account to collect the debt. However, Tennessee exempts certain income and assets from garnishment, including:

  • 75% of your disposable earnings (after taxes/deductions)
  • Social Security, unemployment, disability, and other government benefits
  • Certain retirement accounts like 401(k)s and IRAs
  • Equity in your home up to $25,000 (or $50,000 for married couples)

So while garnishment is possible, debt collectors can’t take everything you have. It’s important to respond to any lawsuit so you can claim your exemptions.

Dealing with Zombie Debt in Tennessee

Zombie debt refers to very old debts that are past the statute of limitations. Debt buyers purchase these debts for pennies on the dollar hoping to collect.While zombie debt collectors can attempt to collect the debt, they can’t legally sue you over it in Tennessee if it’s past the 6-year statute of limitations. However, they may try to trick you into restarting the clock by:

  • Getting you to make a small “good faith” payment
  • Tricking you into admitting the debt is yours in writing
  • Pressuring you to make a new payment arrangement

If you’re contacted about zombie debt, you can simply tell the collector it’s past the statute of limitations and they have no legal way to force you to pay. But be very careful about anything you say or do in writing that could revive the debt.

How to Respond to Debt Collectors in Tennessee

If a debt collector contacts you, here are some tips on how to properly respond:

  • Request debt validation in writing within 30 days
  • Don’t admit the debt is yours or make any payments until it’s validated
  • Send a cease and desist letter if the collector violates laws
  • Respond to any lawsuits to protect your rights
  • Consider hiring a consumer protection lawyer if the harassment continues

You have rights as a consumer, so don’t let debt collectors bully or deceive you. Understand your protections under Tennessee and federal law.

Hiring a Tennessee Debt Collection Lawyer

If you’re facing aggressive debt collection tactics or a lawsuit has been filed against you, it may be wise to hire an experienced debt collection defense lawyer. An attorney can:

  • Analyze the validity and age of the debt
  • Ensure your rights are protected
  • Negotiate a settlement or payment plan
  • Defend you against an improper lawsuit
  • Countersue the collector for violations

At Spodek Law Group, our team has over 50 years of experience dealing with debt collectors and protecting consumers’ rights. We offer free consultations, so don’t hesitate to contact us if you need assistance with debt issues in Tennessee.

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