What if you have a problem paying your power bill? What are your legal options?
I spoke with Charlie Harak, managing attorney at the National Consumer Law Center, to obtain answers to some of the most prevalent customer issues. He’s also a co-author of the book “The National Consumer Law Center’s Guide to Utility Consumers’ Rights.”
The first thing to remember, according to Harak, is that most consumer safeguards only apply to gas and electric services. “Water is typically given by a government supplier (municipal and rural electric cooperative), which is significantly less regulated,” he explained. Similarly, most propane and heating oil deliveries are not regulated. He further claims that there are no federal laws that particularly address utility customers’ rights. State laws govern these rights.
Gas and electric service are normally controlled by state Public Utility Commissions, according to the NCLC handbook (PUCs). Investor Owned Utilities (IOUs), government-owned enterprises (munis), and rural electric cooperatives may all supply services (co-ops). IOUs are frequently the most heavily regulated of the three.
With that in mind, here are five typical utility bill issues and what you can do to resolve them.
The federal Fair Debt Collection Practices Act regulates third-party debt collectors who collect consumer debts (including energy bills). If a debt collector contacts you about a debt, you have the right to get a debt collection notice in the mail (if they called you first) and to request documented validation of the debt. That allows you time to investigate the debt to see if you owe it and, if so, what you can do about it.
If you confirm that the obligation is past the statute of limitations, you can write to the debt collector saying that you are aware that the debt is past the statute of limitations and requesting that they not contact you again. (The FDCPA only applies to outside collection agencies; it does not apply to businesses that collect their own debts.)
What is Michigan’s electricity bill statute of limitations?
Michigan has a number of rules in place to protect consumers and assist them manage their debt. The laws are fairly thorough, going well beyond those enacted by the federal government and offering residents of Michigan substantially more protection than inhabitants of other states.
Statute of Limitations
The statute of limitations in Michigan is six years, and it applies to all forms of debts. This means that creditors cannot pursue legal action if a debt is more than six years past due or has not been paid in more than six years. Creditors and debt collectors lose their ability to collect money owed on a credit card, a one-time loan, or any other sort of debt.
Collection Practices Act
Michigan’s version of the federal Fair Debt Collection Practices Act is the Collection Practices Act (FDCPA). In the same way that the FDCPA forbids misleading, incorrect, or untrue statements or activities in the endeavor to collect a debt, the state law does as well. Threats, profanity, attempts to shame debtors, and harassing, abusive, or coercive debt collection practices are all prohibited.
The Michigan Collection Practices Act differs significantly from the federal Fair Debt Collection Practices Act in that it applies directly to creditors and lenders, but the federal legislation only applies to outside debt collectors – third parties hired by lenders to collect debts on their behalf. This provides consumers with an additional layer of security.
Credit Services Protection Act
The Credit Services Protection Act governs credit service businesses, such as those who provide lines of credit, credit restoration services, or related advice.
- Using alternative personal identifying information to create a new credit report for a client.
Unlawful Trade Practices Act
If such statements are inaccurate, the Unlawful Trade Practices Act bars vendors from advertising themselves as wholesalers or reduced-price shops. It also prevents stores from implying a relationship with the US armed forces, such as army surplus stores, unless such a connection exists.
Credit Reform Act
The Credit Reform Act specifies the sorts of fees that can be charged by lending organizations.
Late fees of up to $15 or 5% of the total amount due, whichever is greater.
Except in certain circumstances when the lender is a bank or credit union, the legislation also says that receiving a loan cannot be contingent on signing up for additional financial services.
Consumer Protection Act
The Michigan Consumer Protection Act is the state’s most comprehensive consumer protection legislation. It prohibits all unfair, misleading, and unconscionable trade and commerce practices.
- Obtaining a customer’s Social Security number before completing a transaction, unless the information is required for a background check or other legitimate reason.
- On receipts, just the final four digits of clients’ account numbers should be printed.
Gift certificates, vehicle rentals, and clothing donation boxes are all covered by the statute.
Is there a statute of limitations in Pennsylvania for electric bills?
Harassment is too detrimental to your health to put up with. The Pennsylvania Fair Credit Extension Uniformity Act forbids creditors from engaging in unfair debt collection practices. They are not permitted to harass or abuse you in any way. They are not permitted to use physical violence to threaten you. They are not permitted to speak in an obscene or abusive manner. Unless you have given them permission, they should not call you before 8 a.m. or after 9 p.m. Once they find that your workplace does not allow such calls, they are not authorized to phone you at work. Creditors that break the law can be sued for actual and punitive damages, as well as attorney expenses.
If you request it in writing, a debt collector attempting to collect a debt owing to another company is compelled by federal law to stop contacting you. (Unfortunately, creditors are not covered by this federal statute.) You may be entitled to sue the debt collector for attorney fees and punitive damages if the debt collector continues to contact you after you deliver the letter. If you send a letter to a debt collector asking them to cease contacting you, you should send it certified mail and save a duplicate for your records. If you send such a letter to the debt collector, the creditor may feel compelled to launch a lawsuit against you, win a judgment, and ask the Sheriff to seize your property or garnish your bank account.
When it comes to dealing with overbearing creditors and debt collectors, there are three fundamental techniques.
- You can ask Advantage Credit Counseling Service (1-866-699-2227), a free service, to work with your creditors to come up with an affordable repayment plan.
- You are under no legal obligation to speak with creditors. When they call, you can simply hang up. You can obtain a telephone answering machine. If you do this, the creditor may feel compelled to launch a lawsuit against you, win a judgment, and ask the Sheriff to seize your property or garnish your bank account.
- By cooperating, you can try to “buy yourself some time.” You can give the creditor or debt collector some information about your condition, such as that you are unemployed or temporarily disabled. You have the ability to tell them when and where they should call you next. You can also ask that the creditor or debt collector not contact you while you are at work or during specific hours. If you can persuade creditors or debt collectors that you are doing your best in light of your current circumstances, they may postpone taking legal action against you and offer you additional time to bring your account current.
IMPORTANT: In Pennsylvania, most types of non-government debt are subject to a four-year statute of limitations (e.g., credit cards, medical bills, utility bills, etc.) The four-year period normally begins with the last payment on the account. If you are sued after more than four years, you may be able to defend yourself by claiming that the lawsuit was brought too late. This limitation period does not apply to all types of debts.
Is it possible for me to be held liable for a utility bill that is not in my name in the United Kingdom?
Normally, no. Landlords are not accountable for unpaid bills left over by renters as long as the bill is in the tenant’s name and it is indicated in the leasing agreement that tenants are responsible for utilities.
However, if you find yourself in this difficult situation as a landlord, there are several precautions you should take to protect yourself.
- When a new tenant moves in, always notify the local government. You will need to submit the names of the new tenants as well as the old tenants’ contact information so that they can contact you if necessary.
- Notify the property’s energy suppliers of any tenancy changes (this includes gas, electricity and water)
- Encourage new renters to update their utility invoices with their new names as soon as feasible.
- Keep a record of the meter readings at the beginning and conclusion of each tenancy for the utility companies.
- Make sure your leasing agreement expressly indicates that the tenant is responsible for utility bills.
- Keep a signed copy of the tenancy agreement somewhere safe and easy to find.
How long does it take for a debt to become uncollectible?
Some companies and debt collectors may lead you to believe that your financial commitments will continue to bother you indefinitely until you come up with some cash.
What they normally don’t tell you is that there are regulations that limit the amount of time you may be sued for unpaid debts.
Consumer debt has a four-year statute of limitations in California. This means that a creditor can’t win in court after four years, effectively rendering the debt uncollectible.
I bring this up in light of a strangely threatening letter sent to former customers by cable giant Spectrum, in which the firm offers to forgive past debt if the ex-customer agrees to rejoin service.
Spectrum claims that renewing your service will eliminate your previous debt. Consumers, however, should be wary of such offers, according to legal experts.
Is it necessary for me to pay an old electricity bill?
You might not have to pay for all of the energy you’ve used if you haven’t received an accurate gas or electricity bill in over a year. Your supplier is not allowed to send you a bill for energy you consumed more than a year ago under ‘back billing’ restrictions.
How long do you have to pay back a debt?
If you’re liable for most debts, your creditor must take action against you within a particular time frame. They take action when they send you court documents stating that they will take you to court.
The time restriction for most debts is six years when you last wrote to them or made a payment.
Mortgage debts have a longer time limit. If your home is repossessed and you still owe money on your mortgage, you have six years to pay down the interest and twelve years to pay off the principal.
After six years, what happens to a debt?
Your debt may be declared statute barred after six years. This means that the obligation still remains, but a CCJ cannot be issued to recover the amount owed, and the lender cannot pursue you through the courts to collect the bill.
In Michigan, how long may a debt collector pursue an old obligation?
- Your creditor has up to 6 years (from the date of your last payment) to collect on a debt, including getting a judgment on the obligation, according to Michigan law.
- If your creditor obtains a judgment or default judgment and renews it, the statute of limitations no longer applies.
- Just because a debt has been inactive for a while doesn’t mean your creditor won’t try to collect it again years later or sell it to a collection agency. When a debt is sold to a collection agency, the debt is usually subjected to fresh, more aggressive collection tactics.
- This third-party collection agency can also seek a judgment in order to extend their collection period and ask for a garnishment.
- The status of a charge-off (link to: ) The fact that a debt is attached to your credit report does not mean you are no longer legally responsible to pay it. This is essentially a creditor’s accounting procedure (s). This creditor could still go after a judgment or sell the debt to a debt collector (who could also pursue a judgment).
- If you receive a notice of complaint (a lawsuit filed against you) for a debt that is past the Statute of Limitations, you must still reply. The Limitation Period is a “affirmative defense.” Though you ignore the notice of complaint, your creditor can get a deficiency judgment and resume collection efforts, even if the Statute of Limitations has expired. This makes the debt legally enforceable once more, and the judgment can be reissued and/or sold to a debt collection agency until the debt is paid off.
- Unpaid debt lowers your credit score and makes it more difficult to receive new credit or acceptable interest rates.
- Your payment history accounts for 35% of your credit score. Delinquent accounts and negative credit reports, according to FICO, will have the greatest influence on a bad credit score.
- Your entire debt load accounts for 30% of your credit score. Even though a debt appears to be inactive, it still contributes to your overall debt-to-income ratio and can lower your credit score.
In Pennsylvania, how long does it take for a debt to become uncollectible?
Unfortunately, no matter where you live, you may find yourself in debt collection. However, where you live has an impact on how the debt collection process works. Here’s everything you need to know about Pennsylvania debt collecting tactics and protections.
The Fair Credit Extension Uniformity Act: This act regulates debt collectors’ and creditors’ debt collection actions in Pennsylvania. Debt collectors and creditors are prohibited from participating in certain unfair or misleading practices when attempting to collect debts under this state law. When and where a debt collector or creditor can contact you, how they locate you, and who they notify about your debt are all governed by rigorous restrictions. Threatening behavior, lying to the debtor, and other destructive or harassing activities are prohibited under this statute.
Wage garnishment is a legal proceeding in which a person’s earnings are withheld from them in order to pay a debt. This could happen if you owe the IRS unpaid taxes or if a lender obtains a judgment against you for a long-overdue loan. Wage garnishment is not the same as a wage assignment in that it is not voluntary. An employee can agree to enable their employer to turn over a specific amount of money from their paychecks to a creditor in exchange for a wage assignment.
The amount of your salary that can be garnished is usually limited. The Debt Collection Improvement Act, for example, allows federal agencies or collection companies under contract with them to garnish only up to 15% of disposable income to settle defaulted obligations owing to the US government. Under the Higher Education Act, only 10% of disposable income can be garnished to settle a defaulted federal student debt.
Certain activities performed against you in retaliation for wage garnishment are legally protected. The Consumer Credit Protection Act (CCPA), Title III, restricts the amount of money that can be garnished. Employees are also protected from being dismissed if their wages are garnished for only one debt. Title III covers all 50 states as well as all US territories.
Responding to collection letters
A debt collector is legally required to present you with a written notice containing some critical facts regarding the debt once you’ve been contacted in writing by a debt collector. If the agency contacts you by phone, you should request that it contact you in writing. You should not provide any personal or financial information until you have checked that the debt collector is real.
When a collection agency contacts you, you should take efforts to discover the following information, and do your best to obtain it as soon as possible. In some cases, you will only have 30 days to respond to a debt collector’s request for information.
- The total amount of the debt you allegedly owe, plus any expenses like interest or collection costs.
You should contact the Federal Trade Commission if you have a complaint against a collection agency (FTC).
How you proceed after proving that the debt is yours is determined by a number of factors. Here are a few scenarios in which you might find yourself.
If you’re not sure if it’s your debt, here’s what you should do: You can write to the debt collector to challenge the debt’s legitimacy or to obtain additional information about the debt.
If the debt is not yours: If you are convinced the debt is not yours, write the debt collector to let them know. Tell them you don’t want to be contacted about the debt in the future.
If the debt is yours, negotiate a settlement figure with the debt collector if you are not willing to pay the total bill. Agree on the amount of the debt that will be forgiven.
Understanding Pennsylvania’s statute of limitations
Creditors can no longer pursue you in court for debts that have past the statute of limitations they are now considered “time-barred.”
However, be aware that they may try to collect your debt in other ways, such as phoning you or sending you letters. Debt statutes of limitations differ by state and debt category. Auto loan, credit card, mortgage, and medical debt all have a four-year statute of limitations in Pennsylvania. State tax debt, on the other hand, has no time limit.
Check to see if the statute of limitations on an old obligation hasn’t expired before paying it, even if it’s only $1. Because making a payment resets the clock, giving the corporation extra time to suit you (further information on Pennsylvania’s statute of limitations can be found below). An attorney can assist you in navigating this process.
Take a look at the table below for a breakdown of Pennsylvania’s debt statute of limitations.
What should you do if your debt has outlived its statute of limitations?
If you’re still unsure, you have two choices: Contact the creditor and inform them that you believe the debt is statute-barred or prescribed, and request proof if they disagree. You must begin paying the debt once the creditor responds with proof of payment or a written acknowledgement of the debt.