Collection Activity

• In the same way that a credit card company can operate in one state yet issue credit cards to consumers around the country, so too can a collection agency conduct business outside of its own state. The two most common tactics collection agencies use when contacting debtors are telephone calls and letters. A debt collector can just as easily call you or send you letters from another part of the country as it could if it were locally owned and operated.
  
  

State-Specific Regulations

• While collection agencies can contact you and conduct collection activity regardless of your state of residence, debt collectors must adhere to your state's laws when doing so. For example, if your state requires that collectors obtain a license to conduct collection activity in your state, an unlicensed collection agency would not have the legal right to either call you or send you letters asking for payment.
  
  

Legal Action

• Not only can an out-of-state collector contact you about your debt, but it can take legal action against you as well. If the collection agency is located in a different state, it must file its lawsuit in your state of residence rather than the state where the business is located. Doing so gives you the opportunity to defend yourself at the lawsuit hearing -- a feat that would prove financially impossible for many consumers if doing so required traveling to a different state.
  
  

Domesticating Judgments

• If a collection agency holds a legal judgment against you after winning a debt collection lawsuit, leaving the state doesn't help you avoid contact or collection activity. In order to collect from you in your new state, the collection agency files a copy of the judgment with the court system in your new state. This "domesticates" the judgment. A collection agency cannot enforce an out-of-state judgment against you without first domesticating it.
  
  

Stopping Contact

• Regardless of your state of residence, you can stop a collection agency from contacting you simply by sending the company a letter barring it from communicating with you in any way. After receiving the letter, the collector can only contact you again to either verify that it received and will honor your request or to explain any further action it intends to take when recovering your delinquent debt.