Debt Collection Laws in Vermont

Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Vermont's Consumer Protection Rule 104 regulates debt collection activity. It outlines what debt collectors cannot do and protects consumers against unfair practices. Debtors can also count on the Fair Debt Collection Practices Act to further defend their rights.

Consumers struggling with debt would appreciate an understanding debt collector. Unfortunately, that isn’t always the case. Many debt collectors resort to harassment and other illegal methods to scare consumers into paying debt.

Federal and state governments have established laws and regulations to protect you. Understanding these laws can prepare you for debt collection lawsuits and subsequent judgments.

SoloSuit has compiled this simplified summary of Vermont's debt collection laws to help you beat unprofessional debt collectors. We will discuss resolving debt in collections and standing up to debt collectors if they sue you. Let's start with the basics.

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Who is a debt collector in Vermont?

Vermont Rule CP 104.07 defines a debt collector as any person engaging or aiding directly or indirectly in enforcing claims. In other words, anyone who follows up on delinquent accounts to seek payment is a debt collector. Creditors and their agents fit the definition if they contact debtors about past-due accounts.

Has a debt collector contacted you? Do you have any rights? Find out below.

Vermont debt collection laws protect you

Vermont Rule CP 104, also known as Vermont's Consumer Protection Rule 104, regulates debt collection practices in Vermont. Below, we’ll break down this law, section by section, to help you understand your consumer rights as a Vermont resident.

CP 104.01 Threats of Coercion

This law is basically saying that if someone tries to force or scare a person into paying back a debt that resulted from buying consumer goods or services, it’s considered an unfair trade practice.

Here's a simpler summary of debt collection practices that are deemed unfair or illegal under this section:

Threatening or using violence or any criminal means to harm someone, their reputation, or their property.
Falsely accusing someone of a crime or conduct that would disgrace them or make people think less of them.
Telling others, like credit agencies, that a consumer is refusing to pay a valid debt when it’s not true.
Falsely suggesting that selling or assigning the debt to another collection agency will result in loss of defenses to the claim or lead to harsh collection attempts.
Threatening to arrest, seizure, garnishment, attachment, or sale of any property or wages without proper notice and a court order, unless such action is legally permitted and the debt collector intends to do it.
Threatening any action that is not usually taken in business, unless it was actually intended to be taken in that case.
Threatening any action that is prohibited by this Rule.

In simple terms, it is against the law for a debt collector to use dishonest threats or harmful actions to collect a debt in Vermont.

CP 104.02 Harassment

Anyone trying to collect a debt can't use actions or behaviors that are meant to oppress, harass, or abuse anyone involved in a consumer transaction; if they do, it's considered unfair and illegal. More specifically, Vermont debt collectors cannot:

Use rude or offensive language.
Withhold the name of the business or company they represent when calling.
hey can’t cause anyone extra expense by hiding the true purpose of any communication.
Call so frequently that it becomes harassment or call outside of normal waking hours.
Call someone at their workplace if instructed not to.

Basically, debt collectors have to be clear, respectful, and follow specific rules when trying to collect a debt, and not doing so is against the law.

CP 104.03 Unreasonable Publication

Under this section, publicly sharing information about someone’s debt from consumer transactions in an unreasonable way is unfair and illegal. For example, debt collectors cannot share debt information with the debtor's family members or employer unless there’s a judgment, they have written consent, or they are trying to locate the debtor without revealing the debt.

In addition, Vermont debt collectors are prohibited from using any communication form that displays or conveys any information about the debt to anyone other than the debtor, except telegrams, which can only show the name, address, and phone number of the debt collector..

Note that sharing information about a consumer debt to a consumer reporting agency or to persons with a legitimate business need for such information is not considered a violation of this section. In summary, sharing someone’s debt information is restricted and can only be done under specific conditions or with the debtor's consent, otherwise, it's against the law.

CP 104.04 Deceptive Representations

It’s illegal for Vermont debt collectors to use dishonest or misleading methods to collect a debt or get information about debtors, this includes:

Using a fake business name.
Failing to clearly communicate that they are collecting a debt in all written communications.
Pretending to have information or something of value for the debtor.
Failing to disclose the real name and full business address of the person to whom the debt has been assigned when they first demand payment.
Giving false impressions about the amount, character, or legal status of a debt.
Pretending to be affiliated with the government or any official agency.
Using, distributing, or selling any document that falsely seems to be authorized by a court or government authority.
Claiming to add extra fees to the existing debt if it’s not legal to do so.
Giving false impressions about the true nature of the debt collector or their business.

So, basically, debt collectors have to be truthful and clear about who they are and what they are doing, and they can’t use deceptive methods to collect debts.

CP 104.05 Unconscionable Means

Under this rule, Vermont collectors are not allowed to use unfair or harmful ways to try to collect a debt, as it’s considered an unfair trade act.

Here’s the breakdown in simpler terms:

Debt collectors can't get any written statement from a debtor affirming any obligation without clearly explaining the nature and consequences of such affirmation, especially if the debtor is not legally obligated to make such affirmation.
Debt collectors can’t try to collect any part of their own fees or charges from the debtor unless they are legally entitled to such fee or charge.
They can’t collect any interest, fee, or expense besides the main debt unless it’s allowed by the agreement or by the law.
If a debtor has an attorney and the debt collector knows this, the collector should only communicate with the attorney about the debt, unless the attorney allows communication with the debtor.

In a nutshell, debt collectors have to be fair, they can’t add extra fees unless it’s legal or agreed upon, and if a debtor has a lawyer, they should mostly communicate with the lawyer about the debt.

CP 104.06 Practice of Law by Debt Collectors

If someone who isn’t a licensed attorney tries to act like one in order to collect consumer debts, it’s considered dishonest and unfair trade practice under law 9 V.S.A. Section 2453(a). This includes doing legal services, giving legal advice, or falsely implying they are an attorney. It’s also unfair and deceptive to communicate with a debtor using an attorney’s name or anything written with an attorney’s name on it if they are not an attorney.

In other words, only real lawyers can perform legal actions or give legal advice when it comes to collecting debts, and pretending to be a lawyer to do so is illegal.

I am receiving debt collection calls in Vermont. What are my options?

The law allows debt collectors to call you, but aside from being disruptive, another downside to phone communication is a lack of tangible evidence. The best communication option would be written correspondence to give you a record for future reference.

A legal option to stop calls is to Send a Debt Validation Letter. Rather than ask the caller to give details of the debt on the phone, send them an official written request.

When a debt collector receives this letter, they must provide documents and other evidence demonstrating that the debt is yours and every detail is correct. Meanwhile, they should stop calling, giving you time to find other means of resolving the debt.

Send a Debt Validation Letter.

You can also stop debt collection calls by:

Requesting the debt collector to contact your attorney
Sending a Cease Contact request
Asking debt collectors to communicate exclusively in writing

The Fair Debt Collection Practices Act or FDCPA allows debt collectors to send you messages on Facebook and other social media platforms.

The Fair Debt Collection Practices Act also protects you

The above prohibitions are closely related to those found in the FDCPA regulations. Debt collectors who violate these rules may be liable for $1,000 per violation.

Let’s consider an example of an FDCPA violation.

Example: Collection company VDCS sues Silas for a $1500 credit card debt. Silas uses SoloSuit to respond to the case and decides to counter-sue for these two FDCPA violations: VDCS had called him several times a day at work, and the caller shouted profanities at him. When VDCS receives the Summons for the counter-suit, the company withdraws the original lawsuit. VDCS lawyers realize that if Silas wins the case, they will owe him more money than the debt itself.

If a debt collector fails to receive payment despite numerous calls and letters, they may decide to sue you. If they do, the law still protects you.

Respond to a debt collection lawsuit in Vermont

If you have a debt that is still within the statute of limitations in Vermont, the creditor or debt collector can decide to sue you. Different accounts have varying statutes of limitations. For example, credit card debts last six years, while a debt collector has 14 years from the day you default on your mortgage to sue you.

You have 21 days to file your Summons response in Vermont. Keeping time is crucial to avoid a default judgment in favor of the debt collector.

You can also settle the debt with the plaintiff to stop the lawsuit. It is common for debt collectors to accept an amount less than what you owe, especially if you offer a lump sum amount. However, if you suggest a settlement after they have filed the lawsuit, you must first respond to the Summons.

Sometimes state and federal laws use difficult-to-comprehend legalese. It's SoloSuit's mission to break them down for you. We also help individual consumers who cannot afford expensive attorneys to create legally binding documents when fighting debt.

Knowing what debt collectors cannot do also liberates you. Yes, you owe money, but this is not a reason for them to harass and abuse you. You can stand against debt collectors and even sue them if they violate your rights in Vermont, and the first step is typically to respond to your debt lawsuit.

Settle your debt in Vermont

After filing an Answer to your Vermont debt summons, you will have some time to work out a debt settlement agreement. If you go about this wisely, you can usually settle your debt for less than you originally owed.

In a debt settlement, you offer to pay your creditor a fraction of the total owed, typically around 60% or more of the debt's worth. By providing a one-time payment, the creditor consents to waive any legal actions against you and absolve you of the outstanding balance.

If you decide to settle your obligation, you’ll want to ensure you get the terms of your agreement in writing and pay the creditor before your court date. If you’ve never tried debt settlement before, consider working with a professional organization that will guide you through the process.

To learn more about how to settle a debt in Vermont, check out this video:

SoloSettle, powered by SoloSuit, is a tech-based approach to debt settlement. Our software helps you send and receive settlement offers until you reach an agreement with the collector. Once an agreement is reached, we’ll help you manage the settlement documentation and transfer your payment to the creditor or debt collector, helping you keep your financial information private and secure.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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