Debt Collection Agency in the United States
Your claim in the United States is handled by Direct Recovery Associates, Inc., a debt collection agency licensed by the California Department of Financial Protection and Innovation. Your local partner starts amicable contact fast, while you track progress in one dashboard. No upfront fees. Prefer to learn first? The complete United States debt collection guide follows below.
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Why Choose Debitura for Debt Collection in the United States
Fast, simple and risk-free debt collection in the United States
Debitura is a global, tech-enabled collections platform working with locally licensed agencies and law firms in 183 countries. In the United States, your case is handled by Direct Recovery Associates, Inc., a debt collection agency licensed by the California Department of Financial Protection and Innovation and based in Agoura Hills, California.
- Risk-free pricing: No fees unless we succeed.
- Quick setup: Submit invoices in a few clicks.
- Real-time tracking: Live status, actions, and payments in one portal.
- Compliance: Actions follow the federal Fair Debt Collection Practices Act (15 U.S.C. §1692) and the applicable state's debt collection law.
Start recovering your United States claims in minutes
- Submit your claim: Upload your unpaid invoice through the dashboard, the REST API, or a plug-and-play ERP integration such as Xero or QuickBooks.
- Local collection begins: We assign your case to Direct Recovery Associates, Inc., who starts amicable contact with the debtor. If court action is needed, you choose 1-3 fixed-price legal quotes before anything proceeds.
- Get paid: Funds are remitted on recovery. If escalation is needed, only pre-approved, fixed-price legal steps move forward.
Transparent, success-based pricing
With Debitura you only pay when we succeed. Pre-legal collection is No Cure, No Pay: a success fee deducted from recovered amounts, invoiced locally by your partner. Fees depend on the debtor's country, not yours.
- Debtors in Europe (EU, Iceland, Liechtenstein, Norway, the UK and Switzerland): success fees from 6% depending on claim size.
- Debtors in the rest of the world: success fees from 7.5% depending on claim size.
- Older claims: a surcharge applies for claims 12–24 months overdue and for claims older than 24 months.
- Legal action is optional: you approve fixed-price quotes before any legal spend.
See the pricing page for the full fee schedule, or get an instant estimate when you upload a claim.
How does debt collection work in the United States?
Debt collection in the United States starts with an amicable phase handled by your licensed local partner, Direct Recovery Associates, Inc.: reminders and a formal payment demand under the federal Fair Debt Collection Practices Act, aimed at full payment or a written instalment agreement. Most straightforward claims resolve at this stage. If the debtor still does not pay, escalation to court is a separate, approved step, never automatic, and the process that follows depends on the state.
- Submit in 2 minutes: upload unpaid invoices via the dashboard, REST API or ERP integrations.
- Local action fast: your licensed local partner contacts the debtor on your behalf.
- No Cure, No Pay: pre-legal collection is success-based, no setup fees or subscriptions.
- You stay in control: legal escalation is never automatic; it only happens after you approve a fixed-price quote.
- Get paid: recovered funds are remitted to you; fees are deducted on success only.
The four steps from unpaid invoice to recovered cash
- Step 1 - Amicable collection: reminders, a formal payment demand and negotiation, handled locally by Direct Recovery Associates, Inc. under the federal Fair Debt Collection Practices Act. Most undisputed claims resolve in this phase, without going to court.
- Step 2 - Enforceable title: if the debtor still does not pay, your partner assesses the legal route in the debtor's state and you approve a fixed-price quote before anything proceeds. The court, filing costs and timeline all depend on the state.
- Step 3 - Enforcement: with a judgment, the applicable state enforcement mechanism, such as wage garnishment or a bank levy, can be used to recover the claim, within the federal wage-garnishment cap.
- Step 4 - Insolvency: if the debtor files for bankruptcy under the federal Bankruptcy Code, your proof of claim is filed and distributions are monitored on your behalf.
Every step is tracked in your dashboard, and nothing escalates without your approval. The full legal detail for the United States, including the federal rules and how they interact with state law, follows in the guide below.
Debt collection in the United States - the complete 2026 guide
For in-house counsel, finance teams and cross-border creditors, this guide covers 2026 debt collection in the United States end to end: the federal rules that apply nationwide, how state law sets limitation periods and court routes, and the enforcement and insolvency mechanics you need to plan a claim.
Why you can trust this guide
At Debitura, we uphold the highest standards of impartiality and precision to bring you comprehensive guides on international debt collection. Our editorial team boasts over a decade of specialized experience in this domain.
Questions or feedback? Email us at contact@debitura.com , we update this guide based on your input.
Debitura By the Numbers:
- 10+ years focused on international debt collection
- 100+ local attorneys in our partner network
- $100M+ recovered for clients in the last 18 months
- 4.9/5 average rating from 621 reviews
Expert-led, locally validated
Written by Lars Holdgaard, Founder of Debitura (+10 years in global B2B debt recovery). Every page is reviewed by top local attorneys to ensure legal accuracy and practical steps you can use.
Contributing local experts:
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Debt collection in the United States - quick answers
There is no single national civil-procedure system in the United States: limitation periods, small-claims limits and court-fee schedules are set state by state (50 states plus the District of Columbia), while a handful of rules, most importantly the Fair Debt Collection Practices Act, apply nationwide. The answers below give the federal floor first, then illustrate the state-level variation using California and Maryland, home states of Debitura's two United States collection partners.
Is there a national statute of limitations for debt in the United States?
No. Each state sets its own limitation period for a written-contract debt, typically 3 to 6 years. In California, the limit is 4 years (Cal. Code Civ. Proc. §337); in Maryland, the general civil limitation is 3 years (Md. Cts. & Jud. Proc. §5-101). Always check the specific state where the debtor is located before relying on a figure.
Which court can I use to sue for a debt in the United States?
The route depends on claim size and the state: small-claims courts handle lower-value, undisputed claims without a lawyer, while larger or contested claims go to that state's ordinary civil court, and a claim between parties from different states that exceeds $75,000 can also be filed in federal court under diversity jurisdiction (28 U.S.C. §1332(a)). California's small-claims limit is $12,500 for an individual and $6,250 for a business; Maryland's is $5,000.
What interest applies to an unpaid judgment in the United States?
Federal-court judgments accrue post-judgment interest at a rate that floats with the 1-year Treasury yield (28 U.S.C. §1961), not a fixed percentage. State-court rates are set separately by each state: California, for example, applies 10% a year on most judgments (5% for smaller personal or medical debts since 2023, Cal. Code Civ. Proc. §685.010). Figures vary by state; check the state where judgment is entered.
Does a third-party debt collector have to follow federal rules?
Yes. A third-party collector working a US debt must follow the Fair Debt Collection Practices Act (15 U.S.C. §§1692-1692p) nationwide, which bans harassment, false or misleading statements and unfair practices, limits when and how a collector may contact a debtor, and requires a 5-day validation notice. The Act does not apply to an original creditor collecting its own debt, and it does not set the limitation period or court fees, both of which remain state matters.
What happens if the debtor's business goes bankrupt?
Insolvency is exclusively federal: the same US Bankruptcy Code (Title 11) applies in every state. Filing triggers an automatic stay that halts collection nationwide (11 U.S.C. §362), and a Chapter 7 liquidation or Chapter 13 repayment plan follows the same federal priority rules wherever the case is filed.
| Illustrative figure | California | Maryland |
|---|---|---|
| Written-contract limitation period | 4 years (CCP §337) | 3 years (Cts. & Jud. Proc. §5-101) |
| Small-claims limit | $12,500 individual / $6,250 business | $5,000 |
These two states are shown as examples only, because Debitura's two exclusive United States partners are based in California and Maryland. Figures for any other state must be checked against that state's own statute before relying on them.
Who does what in the United States debt collection?
Three types of actor handle a US debt claim: a licensed collection agency or law firm for amicable and legal work, the courts for judgments, and two federal regulators that police collector conduct nationwide. Collectors vs original creditors: the Fair Debt Collection Practices Act's conduct rules apply only to third-party collectors and debt-buying law firms, not to an original creditor pursuing its own invoice.
Third-party debt collectors and collection law firms
- Role: handle amicable outreach, negotiate payment, and where needed file suit or refer the claim to litigation counsel.
- Governed by: the federal Fair Debt Collection Practices Act (15 U.S.C. §§1692-1692p) plus the debt collection licensing law of whichever state they operate in.
- Debitura's advantage: your case is placed with a licensed, performance-tracked local partner instead of a generic call centre.
The Federal Trade Commission and the Consumer Financial Protection Bureau
- Role: enforce the Fair Debt Collection Practices Act nationwide and investigate collector misconduct.
- Scope: federal, not state, oversight; a state attorney general or state regulator can add further rules on top.
- Relevance to a creditor: a collector's FDCPA compliance record affects how safely a claim can be pursued and how a debtor's counterclaim risk is managed.
State and federal courts
- Role: issue the enforceable judgment a creditor needs before using enforcement tools such as wage garnishment or a bank levy.
- Which court: state small-claims or general civil courts handle most claims; federal court is available only where the parties are from different states and the claim exceeds $75,000 (28 U.S.C. §1332(a)).
- Debitura's advantage: your local partner determines the correct court and forum for the specific state before filing, so the claim is not misfiled.
Which laws and courts apply to debt collection in the United States?
The United States has no single national civil-procedure code: each of the 50 states plus the District of Columbia runs its own court system, limitation periods and filing-fee schedule. A small number of federal statutes apply on top of state law nationwide, chiefly the Fair Debt Collection Practices Act and the Bankruptcy Code.
The civil court system in the United States
- State courts: each state has its own small-claims court (for lower-value, often self-represented claims) and a general-jurisdiction civil trial court for larger or contested claims; monetary limits and procedure differ by state.
- Federal courts: hear bankruptcy matters (exclusively) and, under diversity jurisdiction, civil claims between parties from different states where the amount in controversy exceeds $75,000 (28 U.S.C. §1332(a)).
- Which one applies: almost all standard debt-collection claims are filed in the state where the debtor is located, following that state's own rules.
Key legislation
- Fair Debt Collection Practices Act (15 U.S.C. §§1692-1692p): the federal conduct floor for third-party collectors nationwide; covers harassment, false or misleading statements, unfair practices, contact limits and a 5-day validation notice. Enforced by the FTC and the CFPB.
- State civil procedure and limitation statutes: each state sets its own limitation period for a contract debt (illustrative: 4 years in California, Cal. Code Civ. Proc. §337; 3 years in Maryland, Md. Cts. & Jud. Proc. §5-101) and its own court-fee schedule; figures vary by state and must be checked individually.
- US Bankruptcy Code (Title 11): the single federal statute governing insolvency in every state; see Step 4 below.
Consumer and data protection
- Applies to: collector-to-debtor communications, especially for consumer (as opposed to business) debt.
- Federal floor: the Fair Debt Collection Practices Act's conduct rules, enforced by the FTC and CFPB, apply regardless of state.
- State add-ons: many states layer additional consumer-collection rules on top of the federal floor; a licensed local partner tracks which apply in its state.
Step 1 - How does amicable (pre-legal) debt collection work in the United States?
Amicable recovery is the non-court route: reminders, a formal payment demand, and negotiation, carried out by your licensed local partner under the federal Fair Debt Collection Practices Act (15 U.S.C. §§1692-1692p), which bans harassment, false or misleading statements and unfair practices and requires a 5-day validation notice on first contact. The goal is full payment or a written instalment agreement without going to court.
- Case criteria: undisputed and not time-barred under the debtor's state limitation period.
- Governing rule: the FDCPA applies to third-party collectors; an original creditor collecting its own debt is not covered by the Act's core conduct rules.
- Goal: full payment or a signed instalment agreement.
- Key actors involved: the creditor or a licensed third-party collection agency.
Amicable collection timeline (Day 0-90)
| Day | Action | What it includes | Outcome / next step |
|---|---|---|---|
| 0 | Invoice due | Amount, due date, interest basis | Start monitoring |
| 1-5 | First contact | Validation notice required under the FDCPA | Debtor has 30 days to dispute |
| 14-30 | Reminder and demand | Accurate sum, clear deadline | Pay, dispute, or proceed |
| 30-60 | Negotiation | Instalment plan or settlement offer | Agree plan or escalate |
| 60-90 | Escalation decision | Case file prepared for the debtor's state | File in the appropriate state (or federal) court if unpaid |
When to escalate to court in the United States
- Escalation triggers: a missed final demand, a dispute raised, the state limitation period approaching, or suspected asset dissipation.
- Prepare next: the contract or invoice, proof of delivery, correspondence, and an interest and costs calculation.
- Hand-off: your partner passes a complete file to litigation counsel or files in the correct court for the debtor's state.
Step 2 - How do you obtain an enforceable title in the United States?
A creditor needs an enforceable title, ordinarily a court judgment, before using enforcement tools such as wage garnishment or a bank levy. Which court hears the case depends on claim size and the states involved, and every detail below, the monetary limit, the filing fee and the process, is set by the individual state, not by federal law.
Is the claim within the small-claims limit?
- Below the state's small-claims limit: the claim can go to that state's small-claims court, generally without a lawyer.
- Above the limit, or contested: the claim goes to the state's ordinary civil trial court, where legal representation is normally needed.
Illustrative small-claims and jurisdiction figures (figures vary by state)
| State | Small-claims limit | Court |
|---|---|---|
| California | $12,500 individual / $6,250 business | California Small Claims Court |
| Maryland | $5,000 | Maryland District Court (small claims) |
These two states are examples only, chosen because they are home to Debitura's two exclusive United States collection partners; every other state sets its own limit and its own filing fee, and a licensed local partner confirms the correct figure before filing.
When does a claim go to federal court instead?
A federal court can hear an ordinary debt claim only through diversity jurisdiction: the creditor and debtor must be residents of different states (or the debtor is foreign), and the amount in controversy must exceed $75,000 (28 U.S.C. §1332(a)). Below that threshold, or where both parties are in the same state, the claim proceeds in state court.
More on court proceedings in the United States
- Typical duration: an uncontested claim ending in a default judgment resolves faster than a defended case that goes through discovery and trial; both timelines vary by state and by court caseload.
- Judgment interest: covered in the Fees section below, since it also varies between federal and state courts.
- Determining the right forum: claim value, the debtor's state of residence, and any contract venue clause all decide which state's court (or, rarely, federal court) has jurisdiction.
Step 3 - How does debt enforcement work in the United States?
Enforcement requires a valid judgment. Once a creditor has one, the available tools, wage garnishment, a bank levy, or a lien on real property, are largely state-law mechanisms, carried out through the state court and its local sheriff or marshal, though one federal cap applies nationwide to wage garnishment.
The federal wage-garnishment cap
Under the federal Consumer Credit Protection Act (Department of Labor Fact Sheet #30), a creditor can garnish no more than the lesser of 25% of the debtor's disposable weekly earnings or the amount by which those earnings exceed 30 times the federal minimum wage. States may set a stricter, lower cap than the federal one, but they cannot exceed it.
Ways to enforce a claim in the United States
- Wage garnishment: a portion of the debtor's wages is withheld by the employer and paid to the creditor, subject to the federal cap above and any stricter state limit.
- Bank levy: funds in the debtor's bank account are frozen and turned over to satisfy the judgment, following the state's levy procedure.
- Property lien: the judgment attaches to real property the debtor owns in the state, to be satisfied on a future sale or refinance.
- Sheriff or marshal execution: a state court order authorizes the local sheriff or marshal to seize non-exempt personal property.
The enforcement process
- Confirm the judgment is final: any appeal window in the state has passed or been waived.
- Choose the remedy: match the tool (wages, bank funds, property) to what is known about the debtor's assets.
- File and serve: submit the enforcement application in the state where the judgment was entered (or where the debtor's assets are located) and pay the applicable state fee.
- Execution: the state enforcement officer or the debtor's bank or employer carries out the order.
- Renew if needed: most states allow a judgment to be renewed before it expires if the debt remains unpaid.
Which of these tools is available, and their exact limits, again depends on the state where enforcement takes place; a licensed local partner confirms the correct procedure before filing.
Step 4 - How do insolvency procedures affect debt recovery in the United States?
Insolvency is the one area of US debt recovery that is exclusively federal: the same Bankruptcy Code (Title 11) applies in every state, administered by the federal bankruptcy courts. Filing a bankruptcy petition triggers an automatic stay that immediately halts collection calls, garnishment and demands for payment nationwide (11 U.S.C. §362).
Types of insolvency and likely outcomes
- Chapter 7 (liquidation): a court-appointed trustee sells the debtor's non-exempt assets and distributes the proceeds across six statutory priority classes of claim (11 U.S.C. §726); unsecured creditors are typically paid last and often receive only a partial dividend, if anything.
- Chapter 13 (individual repayment plan): available to an individual debtor with unsecured debt under $526,700 and secured debt under $1,580,125 (11 U.S.C. §§109(e), 1322(d)); the debtor repays creditors over a 3 to 5 year court-approved plan instead of liquidating assets.
- Chapter 11 (reorganisation): used mainly by businesses (and some individuals above the Chapter 13 ceilings) to reorganise debts under a court-approved plan while continuing to operate.
The insolvency process for creditors
- Detect and verify: identify the bankruptcy chapter, the court, and the case number, and note the automatic stay takes effect immediately on filing.
- Stop individual collection: suspend calls, demands and any enforcement action already in progress; the stay applies even to a case mid-lawsuit.
- File a proof of claim: submit the claim form with the bankruptcy court by the deadline set in the case, attaching the contract, invoices and a statement of account.
- Track priority and distributions: unsecured claims are paid according to the Bankruptcy Code's priority order, after secured and priority claims; monitor trustee reports for any dividend.
- After discharge: a completed discharge bars further collection on the discharged debt; a secured creditor may still pursue its collateral where the security interest survives.
Bankruptcy filing fees (national, fixed)
| Chapter | Filing fee |
|---|---|
| Chapter 7 | $338 |
| Chapter 13 | $313 |
| Chapter 11 | $1,738 |
Fees, interest and who pays what in the United States
Our fee: pre-legal collection in the United States runs on No Cure, No Pay, a success fee deducted from recovered amounts. See our pricing page for current rates, or get an instant estimate when you upload a claim.
Court and enforcement fees - only if the case escalates to legal
These are state (or federal) court fees, not partner charges, and they vary by state and by court. You advance them; some states let a creditor recover them from the debtor after a win.
Federal post-judgment interest floats, it is not a fixed rate
A federal-court judgment accrues interest at a rate tied to the 1-year Treasury yield, recalculated regularly (28 U.S.C. §1961), rather than a fixed percentage. State-court judgment interest is set separately by each state; California, for example, applies 10% a year on most judgments (5% on smaller personal or medical debts since 2023, Cal. Code Civ. Proc. §685.010). Figures vary by state.
Bankruptcy filing fees - fixed and national
Unlike court fees, a bankruptcy filing fee is the same nationwide: $338 for Chapter 7, $313 for Chapter 13, and $1,738 for Chapter 11 (see Step 4 below for what each chapter means for a creditor).
Who keeps what: the recovered principal is yours; statutory interest and any recoverable court costs follow the rules of whichever court entered the judgment.
Find a Local Debt Collection Lawyer
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Law Office of Emely Elizabeth, L.L.C. is a premier law firm in the USA offering effective risk-free debt collection services, established in 2023, recognized with the LII Gold award, and a member of the Commercial Law League of America; as an exclusive Debitura partner, it provides No Cure No Pay debt collection based on Debitura’s risk-free standard terms and pricing.
Direct Recovery Associates, Inc. is a premier debt recovery agency in Agoura Hills offering effective Debt Collection services in the United States, founded in 1992, with a global reach and performance-based billing, ensuring high recovery rates and client satisfaction.
Frequently Asked Questions
Explore our most common FAQs below, or reach out directly at contact@debitura.com if you need help with a specific case.
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