Texas Debt Relief
Lone Star State Offers for Debt Relief
Texas debt relief laws give more protections and rights to consumers than the laws of most other states. In accordance with Article VI of the United States Constitution, state laws are subordinate to federal laws which mean that states may not pass laws that restrict federal enactments but they can certainly enhance their coverage and intent.
The Texas Debt Collection Act and the federal Fair Debt Collection Practices Act regulate most debt collection activity in Texas. Both of these laws protect consumers from harassment and abusive collections tactics.
The federal act applies only to professional debt collectors employed by a creditor or third party, such as an attorney. It also applies to lawyers acting as debt collectors. Texas law takes that concept a step further and covers the activities of anyone acting in the capacity of a debt collector in Texas.
Texas debt relief laws also cover the original creditor who was exempt from regulation under the federal statute. Notably, under the federal act, a department store with its own credit card and collection department was exempt from coverage. This collection scenario does fall under the umbrella of the Texas law.
The Texas Debt Collection Act
The seminal Texas debt relief law, the Texas Debt Collection Act stipulates many protective provisions for debtors. A debt collector may contact the consumer in person, telephonically, or in writing. However, the collector must send the debtor written information regarding the debt within five days of the original contact. The information must specify the name of the original creditor, the amount allegedly owed, and tell the debtor what to do if he believes that this collection notice is erroneous.
If the consumer wishes to dispute the debt, he can send a letter to that end and also request a copy of the debt instrument. The collector has 30 days to verify the information and comply with the debtor’s request or they must cease collection efforts. For the debtor’s protection, he should send all letters by certified mail and keep copies of the correspondence and return receipts.
Under Texas debt relief laws the following creditor actions are forbidden:
- Threats of violence
- Use of obscene language
- False accusations of fraud
- Threatening to have the consumer arrested for failure to pay the debt
- Harassing the debtor with repeated or continuous phone calls
- Using a fictitious name or misrepresenting their purpose
- Proffering documents to a debtor disguised as official court proceedings
- Refusing to identify the original creditor
- Using fraudulent practices to discover information about the debtor
- Using a postcard to contact the debtor
- Asking for a post-dated check and intentionally depositing it prematurely
- Misstating the amount of the debt
A debt collector may not attempt to collect more that the original amount of the debt, however collection fees and attorney fees may be added only if such a provision was included in the debt instrument.
The Fair Debt Collection Practices Act also prohibits debt collection phone calls before 8:00 AM or after 9:00 PM. Language of this act widens the scope of the Texas debt relief law by adding verbiage prohibiting any conduct that oppresses or abuses the debtor.
Report Abusive Tactics
To file a complaint regarding the abusive collection practices of a collection agency, a consumer may call the Texas Attorney General’s Consumer Protection hotline at 800-621-0508. Additional help may be available from the American Collector’s Association of Texas which regulates collection practices of its members.
Texas Debt Relief—Other Protections
If a creditor sues a Texas debtor and wins a judgment, Texas debt relief laws are bolstered by other Texas legal doctrine. The most common methods of enforcing a judgment are garnishment of wages, filing a property lien, and seizing a debtor’s bank accounts. With certain exceptions, Texas law forbids wage garnishment unless it is authorized by the garnishee. Furthermore, a house that is declared as a homestead is afforded 100% protection from a creditor lien unless it is a federal tax lien, contractor’s lien, or if it is in actuality a second residence or rental property. However, bank accounts may be seized.
The statute of limitations protects debtors by disallowing the collection of stale debts. Credit card and contractual debt prescribes after four years while judgments have a 10 year lifespan but may be renewed indefinitely.
Texas debt relief laws afford more safeguards against creditors than many other jurisdictions. These laws are not intended to prevent the collection of a just debt but are for the protection of debtors from the overzealous tactics of collection agencies and creditors.
