The answer is... it depends. Laws vary from state to state. In many cases, property seizure by third parties is not permitted. However, other types of "legal claims," such as pursuit of garnishments or other means for collecting on a debt, may be allowed. Check with your state attorney general's office or state consumer protection office to find out what is legal in your state. These offices will also be able to help you fight an unfair collection practice if the third party is engaging in activity prohibited by law.
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Is there a law that states a third-party collection agency cannot pursue a legal claim because they did not sign the original loan paperwork?
Last Updated: January 08, 2012
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