Section 1 Short title
This Act may be cited as the “Fair Debt Collection Improvement Act”.
Fair Debt Collection Improvement Act
A BILL
To improve the Fair Debt Collection Practices Act by explicitly barring debt collectors from bringing legal action on a debt in which the statute of limitations has expired against any consumer, and for other purposes.
Sec. 2 Collection of time-barred debt
Legal actions on time-Barred debt— Section 811 of the Fair Debt Collection Practices Act (15 U.S.C. 1692i) is amended by adding at the end the following:
“(c) A debt collector may not bring, or threaten to bring, legal action against any consumer on a debt in which the statute of limitations has expired.”
Communication with consumers with time-Barred debt— Section 805 of such Act (15 U.S.C. 1692c) is amended—
by redesignating subsection (d) as subsection (e); and
by inserting after subsection (c) the following:
“(d) Communication with consumers with time-Barred debt—In connection with the collection of debt in which the statute of limitations has expired, a debt collector shall disclose to a consumer the following:
“(1) The debt has been transferred to the debt collector.
“(2) The creditor no longer holds the debt.
“(3) As a result of the expiration of the statute of limitations with respect to such debt, the debt collector may not bring legal action against the consumer to collect such debt.
“(4) Any payment by the consumer towards the debt may cause the statute of limitations for such debt to reset.”