Q: I'm looking for a good online reference to help me with my legal limitations on collecting overdue accounts. What are the appropriate steps? How aggressive can I get?

-- G.M.

A: You can gather information on various federal and state debt-collection statutes by doing an Internet search. The U.S. federal law governing debt collection is called the Fair Debt Collection Practices Act. Each state also has its own laws on debt collection, so it's best to search using your state as the keyword and some variation of the phrase "debt collection" or "fair collection practices."

State and federal laws may limit your ability to take certain steps to collect bad debt, including repetitive, harassing telephone calls. So make sure that your efforts remain within the confines of the law.

Another major restriction on collecting debt is statutes of limitations, says attorney Stephen Dem, who specializes in collection matters in Encino, Calif. "Every state has statutes of limitations that limit the time frame you have to bring a cause of action against a bad debtor. Some are longer than others, depending on the nature of the collection action," Dem says. In California, for example, the statute of limitations ranges from two to four years.

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