The State of Maryland has several collection methods not available to regular creditors. Of course, like others, they can garnish the person’s paycheck or bank account, but they have an advantage there, in that they know where you work and where you bank. In addition, they also have the Tax Refund Intercept Program, or TRIP, which means they can intercept the person’s state tax refund if they owe the state money.
However, the most coercive power the state has is the one to suspend the person’s driver’s license or vehicle registration, which can make it very difficult to get to work and make money to try to pay their bill. That means the State of Maryland has two advantage over every other creditor in collecting debt; the ability to intercept a tax refund and to hold their license.
What Happens If A Debt Is Not Paid Even After Wage Garnishments And Holding Of The License?
Many people come in to file a bankruptcy so they can get the State of Maryland to stop harassing them. The good news is the state would have to release the person’s license or their registration if they filed for bankruptcy.
One common reason people are sued by the State of Maryland is for insurance lapse. Sometimes a person has a vehicle that was repossessed, so they cancel the insurance without making sure the tags were turned in, so they end up being fined for not having insurance, despite the fact that the vehicle was sitting at an impound lot somewhere and they don’t have it.
Insurance lapse fines are common and the fees can add up very quickly, since Central Collections adds a 17 percent collection fee to the amount the person owed when the case was referred to them. The only debts that don’t incur that fee are Department of Human Resources debts, food stamps and things like that.
What Steps Does The Central Collection Unit Take?
If the agency to which the person owed a debt of $30 or more was unable to collect the debt for 90 days, they have to refer it to Central Collections. Once a debt is referred to Central Collections, they will send the person three letters to try to collect the debt. The next step, if the person doesn’t respond to the letters, and the debt is more than $750, the next step will be a lawsuit.
Someone who owed less than $750 probably won’t be sued, and if someone owes more than $750, the Central Collection Agency will do some research to see if they owned real estate or a job or an operating business. If the person has any of those things, they will file suit to try to collect the debt.
Like any other creditor, they will use common sense; they probably won’t waste much time trying to collect a debt from someone who is 65 years old, owns no real estate and whose only source of income is Social Security. They’re more likely to sue younger people with a job and real estate.
For more information on How Maryland Collects Debts, a free initial consultation is your best next step. Get the information and legal answers you’re seeking by calling (855) 4MD-BANK today.