Tennessee debt collection laws

How long can someone sue you over a debt in Tennessee?

Six years is the general rule for a debt owed under a contract. Section 28-3-109 of the Tennessee Code says “The following actions shall be commenced within six (6) years after the cause of action accrued”, and its list includes “Actions on contracts not otherwise expressly provided for”.

Ten years once there is a court judgment. Section 28-3-110 says “The following actions shall be commenced within ten (10) years after the cause of action accrued”, and its list includes “Actions on judgments and decrees of courts of record of this or any other state or government”.

“Not otherwise expressly provided for” matters: some debts have their own periods elsewhere in the Code, including sales of goods under the Uniform Commercial Code, which this page does not quote. Which period applies to a particular account, when it started, and whether anything paused or restarted it are questions about the facts of that account, and they are for a lawyer rather than this page.

Sources: Tennessee Code Sections 28-3-109 and 28-3-110 · quoted 28 October 2026

Do debt collectors have to be licensed in Tennessee?

Yes, and the statute is direct. Section 62-20-105 of the Tennessee Collection Service Act says: “No person shall commence, conduct or operate any collection service business in this state unless the person holds a valid collection service license issued by the board under this chapter or prior state law.” The board is the Tennessee Collection Service Board, whose administrative work the Department of Commerce and Insurance carries out. A company’s staff are covered by its license: “Regular employees of licensed collection services need not procure a separate collection service license.”

How long a license lasts. Section 62-20-112 says “All licenses or identification cards shall expire the last day of the twenty-fourth month from issuance or renewal.” A late renewal is possible for a short time: “All licenses shall be subject to late renewal for a period of sixty (60) days following their expiration date by payment of the prescribed fee plus a penalty as set by the board.” A license is tied to its owner. Section 62-20-113 says that “Upon change of ownership of a collection service, the new owner shall apply for and obtain a new collection service license before commencing or continuing business.” So one company can have several license numbers over the years, and the register keeps the old ones on the record beside the current one.

Since when. The Act’s own history notes trace it to 1981, and it recognizes licenses issued under prior state law. On the Board’s register, licenses in force today carry original licensure dates back to 1975, which is what this directory’s bands measure.

Collecting without one. The Act does not undo what has already been paid. Section 62-20-105 says “no debt or obligation that has been collected by a voluntary payment or by a final judgment of any court may be set aside or challenged based on the lack of a license”, and that a person alleged to have collected without one “May be subject to sanction by the collection service board, but may not be subject to other civil action or defense based on such alleged violation.” Separately, Section 62-20-123 says “A willful violation of this chapter or of any rule lawfully promulgated under this chapter is a Class C misdemeanor.”

Sources: Tennessee Collection Service Act, Tennessee Code Sections 62-20-105, 62-20-112, 62-20-113 and 62-20-123 · quoted 28 October 2026 · original licensure dates from the Board’s public license search, read 28 October 2026

Who does not need the license?

Section 62-20-103 provides that “This chapter does not apply to:”

• “Any person handling claims, accounts or collections under order of any court” and “Attorneys at law”.
• “Any person engaged in the collection of indebtedness incurred in the normal course of business or the business of a parent, subsidiary or affiliated firm or corporation”, with a limit: “however, no person who is or represents the person to be a collection service is exempt from this chapter”.
• State or national banks, state or federal mutual savings banks and savings institutions, and their parents, subsidiaries and affiliates; “Any state or federal credit union”; and industrial loan and thrift companies and small business development corporations authorized under Title 45 of the Tennessee Code.
• “Any person that services or collects obligations secured by a consensual lien on a dwelling”, as federal regulation defines a dwelling.
• A debt owner that collects only through someone licensed, covered in the debt buyers section below.

And a second, broader rule sits in the same section: “Nothing contained within this chapter shall be construed to require an individual or business entity that collects only the individual's or its own unpaid accounts to submit to licensure or regulation by the collection service board.”

This matters when you look a company up. A lawyer, a bank or credit union, a home loan servicer, or a business collecting its own accounts can be operating lawfully in Tennessee and hold no collection service license. The list has no exemption for an agency collecting from another state by mail or telephone; Section 62-20-117 instead lets an out-of-state collector obtain a Tennessee license, “provided, that the nonresident applicant maintains a place of business in the other state and that state offers the same privilege to the licensees of this state.” Whether a particular out-of-state company needs one is a question for the Board or a lawyer, and this page does not answer it.

Sources: Tennessee Code Sections 62-20-103 and 62-20-117 · quoted 28 October 2026

The bond, and who it protects

An applicant for the license must file, under Section 62-20-106, “A surety bond executed by the applicant and a surety company authorized to do business in this state, made payable to the state of Tennessee.” The amount is set by the number of employees: $15,000 for one to four, $20,000 for five to nine, and $25,000 for ten or more, and a certificate of deposit in the same sum, assigned to the Board, can take its place.

The bond is conditioned “that the applicant shall faithfully and truly perform all agreements entered into with its clients accounting for the net proceeds of all collections in accordance with this chapter”, and Section 62-20-110 says who can claim on it: “If any collection service violates the conditions of the bond or certificate of deposit, the injured client may maintain an action in the client's own name on the bond or certificate of deposit of the collection service in any court of competent jurisdiction.” So the bond stands behind the creditors who hire an agency, not the people it collects from. The register records the license, not the bond, which is why this directory describes Tennessee agencies as licensed, never as bonded, and measures years continuously licensed.

Sources: Tennessee Code Sections 62-20-106 and 62-20-110 · quoted 28 October 2026

Debt buyers: licensed if they collect, exempt if they hand it on

The Act’s definition of a collection service in Section 62-20-102 reaches purchased debt. It “means any person that engages in, or attempts to engage in, the collection of delinquent accounts, bills or other forms of indebtedness irrespective of whether the person engaging in or attempting to engage in collection activity has received the indebtedness by assignment or whether the indebtedness was purchased by the person engaging in, or attempting to engage in, the collection activity”.

Section 62-20-103 then exempts a buyer that does not collect for itself: “Any person that holds or acquires accounts, bills or other forms of indebtedness through purchase, assignment, or otherwise; and only engages in collection activity through the use of a licensed collection agency or an attorney authorized to practice law in this state.” So a debt buyer collecting its own accounts needs the license, and one that places them with a licensed agency or a Tennessee lawyer does not. The register does not separate buyers from agencies collecting for others; this directory does, from each company’s own published description, under the scope rule on the methodology page.

Sources: Tennessee Code Sections 62-20-102 and 62-20-103 · quoted 28 October 2026

What must a licensed collector do with your money?

Section 62-20-114 sets four duties. Every licensee shall “Keep and retain for a period of three (3) years accurate individual records of collections, including the amount and date of payment and the names of the debtor and creditor”, and shall “Issue, upon request, individual collection receipts, showing the amount and date of payment, names of the debtor and creditor and the balance, if any, remaining unpaid”. It must also keep a separate trust account with enough money to pay its clients, and monthly records of its bank accounts.

The Act limits what a collector may add to a debt. Section 62-20-115 lets the Board act against a licensee for “Collecting or attempting to collect from the debtor any fee, commission or other compensation not provided by law for collection services rendered to a client”, with one exception for bounced checks: “reasonable charges imposed by banks for processing insufficient fund checks; provided, that the charges do not exceed nine dollars ($9.00) per check”.

Most of the Act is about licensing and about the money agencies handle for their clients. For how a collector may contact and treat you, the main rulebook is the federal Fair Debt Collection Practices Act, which the Tennessee Act names itself (below).

Sources: Tennessee Code Sections 62-20-114 and 62-20-115 · quoted 28 October 2026

When an agency sues you in its own name

Section 62-20-124 lets a licensed collection service sue in its own name on a debt a creditor has assigned to it for collection, on conditions: the assignment must be voluntary and in writing, and it does not transfer ownership of the debt. The agency cannot go to court alone: “No collection service licensee shall commence any litigation authorized by this section, unless the collection service licensee appears by an attorney admitted to practice law in this state.”

It may combine several small accounts against one person in a single case, each no more than $200, and a dispute takes an account out of it: “If a debtor or codebtor files a sworn denial or otherwise raises a dispute concerning any account, bill, note or other evidence of indebtedness, the court shall dismiss the account, bill, note or other evidence of indebtedness, without prejudice.” The agency may then sue on that account separately within a year. And federal law still applies: “Nothing in this section relieves a collection service licensee from complying with the Fair Debt Collection Practices Act (15 U.S.C. § 1692) or deprives any debtor of the right to assert defenses as provided in that act.”

Source: Tennessee Code Section 62-20-124 · quoted 28 October 2026

How do you check a Tennessee collector?

Search the Department of Commerce and Insurance’s public license search and choose the Collection Service Board. Each record shows the license number, its status, its expiration date and its original licensure date. Ended licenses stay on the record, so a company can have several rows; the license in force is the one recorded as active with an expiration date still in the future. A lawyer, a bank, a home loan servicer or a business collecting its own accounts can be lawfully absent, under the exemptions above. Our step-by-step guide covers the traps.

The law also puts the check on the people who hire collectors. Section 62-20-118 says “Any person who places an account with a collection service is responsible for determining that the service is licensed as required by this chapter.” This directory’s Tennessee page lists agencies as they pass verification against the register.

Source: Tennessee Code Section 62-20-118 · quoted 28 October 2026