Girl with pencilFrom time to time, a Guest Blogger shares voice at the New Mexico Bankruptcy Law Blog. Today, we welcome Deborah M. DeMack.  Deborah is a former Assistant Attorney General in the Consumer Protection Division of the New Mexico Attorney General’s Office. A solo practitioner now in private practice in Santa Fe, NM, Ms. DeMack practices consumer law, debt collection defense, and consumer bankruptcy. She can be reached at 505.471.3302. Her website is:

This post discusses points 3 – 5. The first 2 things to know were discussed last week, here.

3.         Not All Debt Collectors Are Treated The Same Under The Law.   Both federal and state law treat different debt collectors differently when it comes to collecting debts.  Generally speaking, original creditors trying to collect monies owed to them are not subject to many of the laws regulating debt collection activities.

             However, debt collection laws, both federal and state, do apply to third-party debt collectors.  Thus, for example, under the federal law known as the Fair Debt Collection Practices Act (“FDCPA”), a debt collector cannot use obscene or profane language to abuse the person from whom the debt collector is trying to collect monies.  The FDCPA contains many protections for consumers against the abuses of debt collectors, but only third-party debt collectors.  Further, under the FDCPA, junk debt buyers and their attorneys are considered to be “debt collectors,” therefore, the restrictions of the FDCPA apply. 

             4.         New Mexico Law Requires Collection Agencies to Have a License.   Under state law known as the “Collection Agency Regulatory Act” or “CARA,” third-party debt collectors fall within the definition of  a “collection agency,” therefore, they must have a collection agency license in order to collect on a debt.  If the debt collector doesn’t have a license to collect debts when it should, any attempt  to collect on a debt is unlawful under CARA, and is considered a fourth-degree felony.

             However, as written, the definition of a “collection agency” under New Mexico law is not precisely the same as a “debt collector” under the federal law, the FDCPA.  While many junk debt buyers are third-party debt collectors and thus, most likely fall within the definition of a “collection agency”– in which case, they do need a license in order to collect on a debt from a New Mexico resident — it’s not always crystal clear.  It will depend on the facts and circumstances.  

 5.         The Lawyer Suing on Behalf of a Debt Collector Must be Licensed to Practice Law in the State of New Mexico — And The Lawsuit Must be Brought in a New Mexico Court.  The overwhelming majority of junk debt buyers and third-party debt collectors are out-of-state entities.  Many debt collectors hire out-of-state law firms who do not have attorneys licensed to practice law in the State of New Mexico. 

             However, in order to sue you on a debt in a New Mexico court, the lawyer representing the junk debt buyer or debt collector must be licensed to practice law in the State of New Mexico.  If the lawyer whose name appears at the bottom of the lawsuit is not licensed to practice law in New Mexico, he or she cannot represent the debt collector in New Mexico courts.

             Generally speaking, if you are a New Mexico resident, you must be sued in a New Mexico court of law (unless you have knowingly waived that right and consented to be sued elsewhere).  Many out-of-state debt collectors and junk debt buyers bring debt collection lawsuits against New Mexico consumers in other state courts.  With some exceptions, other courts in other states do not have jurisdiction over you or the lawsuit.  Therefore, if you are a NM resident but you are being sued in an out-of-state court or by an attorney who is not licensed to practice law in the State of New Mexico, you may have a legal defense to the lawsuit.  Consult with an attorney if you have questions about any lawsuit.  

Links to earlier guest posts by Ms. DeMack are:

Debt Collection Abuse and the FDCPA

To Whom Does the FDCPA Apply

What Debts are Covered?

How May a Debt Collector Contact You?

What Acts or Practices are Prohibited by the FDCPA?

How Do You Stop a Debt Collector from Contacting You?

The 30 Day Validation (Verification) Notice

Statutes of Limitations

Other Types of Illegal Debt Collection Acts

What are Your Rights and Remedies under the FDCPA?

When Debt Collectors Call

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