Sponsor
Stephen Cohen
Representative · D-TN
Representative · D-TN
The bill protects people from abusive pursuit of expired debts and reduces erroneous collections, but raises risks of consumer confusion and compliance costs and could shift some losses onto creditors and ultimately consumers.
People with time‑barred (expired) debts, especially low‑income individuals, will face less harassment and fewer collection lawsuits because collectors may no longer legally pursue those debts.
Consumers — particularly low‑income households — will likely spend less time and money contesting erroneous collections and resolving credit report disputes because invalid claims are less likely to be pursued.
Courts, regulators, and financial institutions will have clearer FDCPA guidance, improving enforcement against abusive collection practices and reducing legal ambiguity.
Low‑income consumers may be unsure whether a debt is time‑barred and could mistakenly ignore valid obligations, risking credit damage, collections, or legal consequences if not properly informed.
Creditors and debt holders may recover less on old debts, which could lead to higher prices, fees, or reduced credit availability passed on to taxpayers and other consumers.
Debt buyers and collection firms will face increased compliance costs and litigation risk to accurately identify time‑barred debts and adjust systems and practices.
Based on analysis of 2 sections of legislative text.
Prohibits debt collectors from collecting or attempting to collect consumer debts after the statute of limitations has expired.
Official title: To amend the Fair Debt Collection Practices Act to prohibit debt collectors from collecting, or attempting to collect, on a debt of a consumer with respect to which the statute of limitations has expired, and for other purposes.
Introduced April 8, 2025 by Stephen Cohen · Last progress April 8, 2025
Makes it illegal for debt collectors to collect or attempt to collect consumer debts after the applicable statute of limitations has expired. The bill adds a new explicit prohibition to the Fair Debt Collection Practices Act against pursuing time‑barred consumer debts and updates the statute table of contents accordingly.