There are certain debt collection laws in Texas that protect borrowers from the unlawful activities of collection agencies. When your debt is passed on to third-party debt collectors or a collection agency, you risk becoming the subject of a lawsuit, having property seized, and having your credit report tarnished.
If you owe money, through a credit card debt, car loan, or other consumer debt, it is important to learn about your rights under debt collection laws in Texas. Collection agencies are known for their unethical practices towards borrowers, and if you do not know your rights under the law, you cannot fight against these practices.
Hiring an experienced debt collection defense attorney is the best way to handle any unpaid debts in Texas. An experienced attorney can deal with collection agencies on your behalf, ensure that your legal rights are respected at all costs, and fight to get your debt reduced or forgiven.
Ronald Arthur Stearns Sr. PLLC
Ronald Arthur Stearns Sr. PLLC has been helping Texas citizens deal with debt collection issues for over 26 years. He has an in-depth knowledge of local rules and regulations and knows what to do to protect your best interests. Our law firm prioritizes protecting the rights of ordinary taxpayers and we dedicate our time to fighting against injustice.
When it comes to debt collectors in Texas, it is essential to have strong legal representation by your side. Ronald Arthur Stearns Sr. PLLC has handled hundreds of similar cases to yours and will fight aggressively on your behalf.
Contact us today for an initial consultation at 210-853-2135.
Texas Debt Collection Law
The Texas Debt Collection Act, in combination with other federal laws, regulates debt collection practices and ensures that consumers are protected from abusive or coercive behaviors. Traditionally, debt collectors have engaged in unethical behaviors to recover money from customers, including abusive language, repeat phone calls, false accusations of lawsuits, and harassment of family members.
Texas debt collection laws aim to provide a more transparent experience for those who go into debt and ensure that they are given full protection under the law. There are some basic protection laws covered in this Act, including the requirement of creditors to provide documentation to consumers regarding their debt, a requirement to be honest about the debt owed, and a prohibition on being abusive or aggressive towards consumers.
There are also legal requirements for creditors and debt buyers to get a court order before garnishing wages, placing a lien on their property, or taking assets from the person who owes money. If a collection agency or creditor does not adhere to the regulations and protections provided under the law, they risk facing civil and criminal penalties and fines.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act is an Act under federal law that applies to collectors working for a professional debt collection agency. This federal fair debt collection act, in combination with Texas debt collection law, aims to protect borrowers from unfair treatment by debt collectors.
Texas Law
The Texas Debt Collection Act prohibits debt collectors from engaging in certain behaviors and collection activities, including:
- Using abusive or threatening collection tactics – This can include false accusations of fraud, threatening violence, using profane or obscene language, making anonymous or repeated phone calls, or threatening repossession or seizure of property.
- Using fraudulent tactics for collection – This can include sending fake court documents, using false identification, misrepresenting the services of the debt collector, lying about the amount of debt, lying about whether the statute of limitations has passed, or trying to collect more than what is owed.
Federal Law
Under federal law, there are some added protections for borrowers, including:
- Debt collectors cannot call borrowers at work or before 8 am or after 9 pm
- Engage in “unfair or unconscionable means to collect or attempt to collect a debt”
- Abuse or harass borrowers, which can include repeated phone calls or oppressive behavior
It is important to note that Texas law only applies to debt collectors working for a professional agency. However, third-party debt collectors are subject to federal law protecting against unethical behaviors of debt collection. If a third-party debt collector harasses, abuses, or engages in unlawful activity to recover a debt from you, speak with an attorney as soon as possible.
Secured Debts vs Unsecured Debts in Texas
There are two main types of debt in Texas: secured debt and unsecured debt. When you have secured debt, or take out a secured loan, you collateralize the debt with property or an asset that can be seized if the debt cannot be paid. When you take out a loan that is secured, you must disclose your assets and likely supply assets that can be used as collateral.
Some common examples of secured debt include a home equity loan, a mortgage, or a car loan. If you default on this debt, the collection agency or original creditor can then seize or use these assets to pay back the debt that you owe.
Unsecured debt is the opposite. If you take out unsecured debt, you do not provide assets or property as collateral in the event of a default. Unsecured loans are based on a person’s credit rating and they enter an unsecured contract regarding repayment of the debt. These debts will be subject to interest rates, penalties, or a lawsuit if they are not paid.
Some common examples of unsecured debts in Texas include credit card debt, personal loans, student loan debt, and medical bill debt. If you cannot pay back these debts, you risk your credit rating and your ability to take out a loan in the future.
Can I Be Sued For a Debt in Texas?
If you owe a debt in Texas, it is possible for the collection agency or original creditor to bring a lawsuit against you to recover it. Collectors may threaten to sue you to coerce you into paying a debt. However, if you receive written notice of a pending lawsuit against you to collect debts, you must respond to the letter fast.
Failing to respond to a lawsuit for debt collection may lead to a default judgment. If the court imposes a default judgment, the creditors can take further action against you to recover the debt, such as placing a lien on your property, imposing collection fees, wage garnishment in some cases, and further interest rates. By responding to the letter, you buy time to contact an attorney and discuss your options.
Is There a Statute of Limitations on Debt Collection in Texas?
As per the statute of limitations in Texas, debt collectors have four years from the last payment date to collect a debt in Texas. Once these four years have passed, the borrower still legally owes the debt, however, the collection agency is limited in how they can recover this debt.
A debt collector cannot bring a lawsuit against you to recover the debt once the four years have passed. If they try to do this, you can use the statute of limitations as a defense strategy in court. They may try to set up a payment plan with you with repayment terms after the limitations period has passed. However, Texas law provides that paying an old debt does not restart the clock on the limitations period.
If you believe your debt has passed the limitations period, speak with an experienced debt collection attorney as soon as possible. Avoid giving out financial information or agreeing to a payment plan with a collection agency before speaking with an attorney.
What Are The Debt Collection Laws in Texas? – Ronald Arthur Stearns Sr. PLLC
Owing money for a credit card loan, student loan, or property loan can be extremely stressful. This is particularly difficult if you have a debt collection agency harassing you to recover the debt or if you have received notification of a pending lawsuit against you. The first step to overcoming debt is being aware of your legal rights. With knowledge of debt collection laws in Texas, you will know if your rights are being violated and how you can deal with a difficult collection agency.
The best way to learn about collection laws in Texas is by speaking with an experienced debt attorney. Ronald Arthur Stearns Sr. PLLC has decades of experience helping clients with all tax and debt-related matters. He has a deep understanding of Texas laws on debt collection and he wants to use this knowledge to help your case.
Our law firm understands how difficult it is to deal with a collection agency, particularly when they are being abusive or manipulative. If you owe a debt, it is probably because you are in a difficult financial situation. We want to help you get out of this difficult situation and set up a payment plan that works for you, or get your debt dropped completely.
Ronald Arthur Stearns Sr. PLLC has the experience and skills necessary to advise you on Texas debt laws and defend your rights in court.
Call our law firm today at 210-853-2135 to arrange a consultation.