According to the most recent Survey of Consumer Finances, did you know that the average American between the ages of 35-54 is more than $130,000 in debt? That number can add up quickly — a mortgage, a car or two, a few credit cards, student loans, and unexpected expenses.
Conversations about money can be challenging, especially if money is in short supply or you’re carrying a lot of debt. You might think you’re managing just fine. Before you know it, you have more bills each month than your paycheck can cover, or you lose your job and can no longer cover all your costs.
You use all your savings, but the bills — and the phone calls from creditors — keep coming. You’re considering a debt protection and bankruptcy attorney, but you don’t know where to start. In this challenging financial landscape, you may feel scared, stressed, and alone. Below you’ll find some useful information about Texas Debt Collection law for your consideration as you decide what to do. Because there are several options available to you, you want to hire an attorney that can help with whichever option you choose.
Protection Under Texas State Law
As a debtor or person who owes money, you still have protection under Texas law. The Texas Debt Collection Act prevents debt collectors from using abusive or fraudulent means to collect.
Some things debt collectors are not allowed to do include:
- Contacting you using a phony name or ID
- Failing to state the true nature of the services provided by the collection agency
- Falsifying letters and other paperwork, so the documents look like the court or another official agency issues them
- Claiming to have something of value to trick you into revealing information
- Withholding the identity of the debt holder
- Falsifying the amount of the debt you owe
- Seeking more than the amount of money agreed to (This does not apply to interest, attorney’s fees, collection fees, etc.)
Also, collection agencies may not employ abusive methods, including:
- Harassing you with constant phone calls
- Making anonymous calls
- Using foul language
- Falsifying an accusation of criminal behavior
- Threatening debtors with violence, criminal behavior, arrest, or repossession without appropriate court proceedings.
Debt collectors may face civil or criminal penalties for violating the Texas Debt Collection Act. If you believe you’ve been subject to any of these debt collection methods, contact a debt protection and bankruptcy attorney.
Will You Lose Everything?
Though someone in debt may fear losing all worldly possessions, you probably won’t. Debt falls into two different categories: secured debt and unsecured debt.
Secured debt has collateral or property behind it. Examples include a mortgage, home equity loan, or a car loan. If you don’t pay these bills, the creditor may seize the home or vehicle.
Like a credit card, unsecured debt is not secured by property, and creditors won’t seize items you bought with the credit card if you can’t pay the bill.
Under Texas law, the house where you live and the land it’s on are known as your homestead. Creditors can’t take this property to recover debt unless the money you owe is for property taxes, a mortgage, a home equity loan, or work completed on the property and performed under a contract.
You also have the right to retain your personal property, like furniture, clothing, and pets, up to a specific limit. The limit on this personal property is $50,000 for one person and double that amount for a family.
Wages that you have not received yet can’t be seized to pay off debt. Once that money goes into your bank account, all bets are off, and creditors may be able to garnish your bank account. Your wages may be garnished to pay income tax, child or spousal support, or student loans in default. If you have money in a retirement account, those funds are safe until you withdraw them from the account.
If you cannot pay your debts, the creditor may take you to court and get a judgment against you to recoup its losses. If you’re married, you may be responsible for your spouse’s debts. Creditors may seize community property (property you obtained together).
Texas debt collection law may seem overwhelming, especially if you’re already in a high-stress financial situation. A debt protection and bankruptcy attorney can answer your questions, help you find a path forward, and put your mind at ease.
Should You File for Bankruptcy?
Filing for bankruptcy is strictly a personal decision. It halts or stays any civil collection actions, but only for a limited amount of time. Bankruptcy does relieve some debt pressure, but it negatively impacts your credit score and stays on your record for ten years.
A qualified bankruptcy attorney can help you understand the pros and cons of filing bankruptcy. A lawyer with knowledge of Texas debt collection laws should provide you with options, allowing you to choose the best alternative.
What other options do I have?
Bankruptcy is not right for everyone, and you do have other options. A qualified debt protection attorney can help you understand all of your options, not just bankruptcy.
Contact a Knowledgeable Bankruptcy Attorney
If you want to resolve your debts, protect your rights, and rebuild your credit, you want our dedicated team on your side. YOUR goals are OUR goals. Give us a call at 281-937-3949 to schedule your free consultation.
The team at Ciment Law Firm, PLLC, is committed to helping clients overcome financial hurdles, meet their goals, and move forward. We have experience in consumer protection, debt collection defense, and bankruptcy. We can help you understand Texas debt collection law and advise you on your next steps so that you can find steady financial ground again.
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Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
Ciment Law Firm, PLLC
24275 Katy Freeway, Suite 400
Katy, TX 77494