Debt Collection Statute of Limitations Bill Passes in Maryland General Assembly

4/13/2016 11:35:00 AM

The state’s governor is expected to sign the legislation, supported by ACA, on the statute of limitations and actions by debt buyers or collectors working on their behalf.


The Maryland General Assembly approved legislation on consumer debt collection that updates the requirements for documentation of consumer debt and the statute of limitations.

Senate Bill 771, approved by the Maryland State Senate in March,  specifies that for debt buyers or some debt collectors, “certain actions may not revive or extend a certain statute of limitations prohibiting a debt buyer or a certain collector from initiating certain consumer debt collection action unless the debt buyer or the collector possesses certain documents.”

The amended legislation states: “Notwithstanding any other provision of law, on the expiration of the statute of limitations applicable to the consumer debt collection action, any subsequent payment toward, written or oral affirmation of, or any other activity on the debt may not revive or extend the limitations period.”

ACA International's State Government Affairs team and members of the Mid-Atlantic Collectors Association worked with legislators, Maryland Attorney General Brian Frosh and other industry groups on amendments to the legislation that define the role of debt buyers in the industry and documentation of consumers' debt.

Mike Hynum, the MACA legislative chair from Hynum Law in Harrisburg, Pa., said the unit worked with the Maryland Creditors Bar and DBA International as well as the legislators and attorney general to define who is, and is not, a debt buyer in the industry because the law could also affect collection agencies and attorneys collecting debt owned by a buyer.

“Even though this was aimed at debt buyers, it could also affect collection agencies and attorneys,” Hynum said. “I think it's just further evidence that, as we go forward, there is going to be an expectation that the more documentation you have the better.”

Debt buyers, as defined in the legislation, must adhere to statute of limitations requirements and those for documents proving existence of a consumer's debt or account.

MACA supported the final version of the bill passed by the Maryland General Assembly, and Gov. Larry Hogan is expected to sign the bill. Upon the governor's signature, requirements in the amended bill are expected to take effect on Oct. 1, 2016.

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