While residents in Florida are working hard to keep above mounting debt, the United States government is trying to lend a hand when it comes to past due debt and the threat of debt collection. Every state has rules that govern the debt collection industry, setting a statute of limitations as to how long debt collectors can legally hassle consumers for money.

Recently the Federal Trade Commission (FTC) took a stand against one of the nation's largest consumer-debt buyers, claiming they were deceiving consumers when it came to their debt collecting practices. The FTC claims the company did not tell consumers that the debt they were seeking was too old to legally collect. They also sent inaccurate information to credit reporting agencies. Many debtors were also not aware that paying even a small portion of the debt would extend the statute of limitations.

In a recent settlement, which is still pending court approval, the company did not admit fault but did agree to some terms. Under the settlement, the company agreed to tell consumers that it cannot sue them for time-barred debt. That is debt that has run out of time in terms of the statute of limitations. They also need to explain to consumers that even if they make a partial payment, they still cannot sue them for the debt. Finally, among other agreements, the company agreed to disclose to customers in writing about a negative report before putting it on a consumer's credit report.

The government has also published a new publication to inform consumers about their rights when it comes to time-barred debts.

Source: Washington Post, "Have old debts? Read up on your rights," Michelle Singletary, Jan. 31, 2012