Debt Collectors...Don't Mess with Texas!

There are a few states that will not allow a debt collector to garnish wages, and Texas is one of them.  

If you live in Texas and have too much debt or are having trouble with debt collectors, here are some valuable tips that you need to know:

texas_flag.jpg

If you, or someone you know, has gone through a time where you were not able to keep up with your debts, then you also know how stressful it can be!

Add to that a debt collector who calls all the time and may even make threats as to what they can do to you if you don't pay, and, well, it is really a bad experience.

But, if you live in Texas (and this will help everyone else as well), I have some good news and tips for dealing with and going through this tough financial nightmare:

We've been helping people solve their debt problems and deal with debt collectors for over 15 years.  

Once in a while, a prospect or new client tells us that they really don't know h

We take time to counsel and/or interview a prospect about their particular situation.

Even though each of our clients has too much debt in relation to their income and ability to repay their debts, each has a unique "reason" that led them to us.  

See if any of these sounds familiar:

  • Loss of employment
  • Divorce
  • Illness or disability
  • Too little fixed income after retirement

Once you start to fall behind or stop making the minimum payments required by the creditor, here's what happens:

At first, you start getting letters from the creditor warning you of the missed payment(s).

Then the calls start!  Lots of calls!

Now, at this point you cannot stop them from calling you (they have the legal right), you do not have to put up with harassment!  Such as:

  • threaten violence or other criminal acts;
  • use profane or obscene language;
  • falsely accuse the consumer of fraud or other crimes;
  • threaten arrest of the consumer, or repossession or other seizure of property without proper court proceedings;
  • use the telephone to harass debtors by calling anonymously or making repeated or continuous calls;
  • make collect telephone calls without disclosing the true name of the caller before the charges are accepted.

The penalties for violation of these laws by a creditor or debt collector are severe.  If you believe they have violated these laws, contact your state's attorney general's office (online is best) and file a complaint.  

We are in Oregon, so an Oregonian would go here:

Oregon Consumer Financial Protection

If the original creditor cannot get you to start making payments again or will not work with you to modify your account, then they may decide to charge it off and send it or sell it to a debt collector.

So, the letters and calls start again, but now, you can put a stop to these calls! 

STOP Collection Calls Free Sample LetterIf a debt collector cannot get you to start making payments or will not agree to a modification of your account, they may decide to FILE A CLAIM against you.

This would be done in your county's courthouse, and then you would be SERVED A SUMMONS.

I've written numerous blogs over the years that explain the who "Legal Process" that a debt collector may take.  For more information, click below:

"Don't Panic if you Receive a Summons!"

But for now, let me explain to Texas residents how they are protected from debt collectors as opposed to those who live in other states.

Once a judgment has been awarded (usually called a "default judgment" as the plaintiff/creditor wins by default), a creditor usually has several options:

  • Apply for a writ of garnishment for your wages
  • File a LIEN on your home or property
  • Apply for a writ to LEVY the funds in your bank account

In Texas, the Texas Consumer Protection Laws specifically state that a creditor/plaintiff CANNOT:

  • Garnish wages or
  • Place a lien on your home (provided it is homesteaded properly)

They can apply for a levy to take funds from your bank account, so be very careful!!!

Here's a link to help you protect your bank account funds.

However, as far as your home or place of residence, you need to make sure it has been properly HOMESTEADED.  

I found a great site that I recommend that you visit:

Ken Paxton, Attorney General of Texas

Bottom line...

Good news:

If you live in Texas, debt collectors cannot garnish wages or place a lien on your home.

HOWEVER...

That doesn't mean that the responsibility for your debts goes away!

You have several options, such as:

  • Debt Management
  • Debt Settlement
  • Bankruptcy

If you would like help in deciding which option is best for you, click below:

FREE  Debt Elimination Summary

 

 

 

 

 

Tags: Texas, can a debt collector garnish retirement income, debt collection in texas, exemption from garnishment

Everything is Bigger in Texas, Including Debt Settlement!


If you live in Texas, you have special protection under the law concerning debt collection.  Debt Settlement in Texas has advantages!

texas flag at longhorn game

 

 When a debt collector decides that they cannot collect on a delinquent debt, they may decide to FILE A CLAIM and a SUMMONS will be issued to the DEFENDENT, the person who owes the debt.

In most cases, the DEFENDENT (you), owes the debt, so there is no need file an ANSWER or to appear in court.

An "ANSWER", is a legal statement that you do not owe the debt and why the CLAIM is invalid.  Sure, you object to the outrageous interest, fees and penalities tacked on the original balance, but you agreed to that when you signed that credit card application...sorry!

So, if you don't do anything about the SUMMONS, and I certainly DO NOT ADVOCATE THAT, then the PLAINTIFF (the filer of the claim and owner of the debt), will be awarded a JUDGMENT.

NOW WHAT?????

If an agreement (SETTLEMENT or STIPULATTED AGREEMENT) cannot be negotiated, then the PLAINTIFF most likely will apply for a WRIT OF GARNISHMENT.  In most states, this will force an employer to send 25% of your net "take-home-pay" (after any state, federal or other withholdings have been deducted from your paycheck).

While this is true in most states, the good news for all of you Texans is that Texas has laws that prohibits most creditors from any wage garnishment!

Notice I said "most creditors" and not "all creditors. 

Texas does allow for wage garnishment for debts such as:

  • Unpaid income taxes
  • court ordered alimony and child support
  • defaulted student loans

One more thing, if you earn wages from an "out-of-state" employer, these wages most likely WILL NOT be exempt from wage garnishment.

For more information about Texas Law and Wage Garnishment, visit:

                                Debt Collection in Texas

So now you understand that for most unsecured debts, Texas will not allow wage garnishment.

                       WHAT ABOUT A BANK LEVY IN TEXAS?

In other words, can a debt collector levy (get the bank to send them your money!) your bank account for unpaid debts???

YES!

Just because a creditor who has been awarded a judgment cannot apply for a writ of WAGE GARNISHMENT, doesn't mean that they cannot (and most likely will) apply for WRIT OF LEVY from your bank!!!

Therefore, you should be making every attempt NOT TO HAVE A JUDGMENT GRANTED in favor of you creditor (or debt collection agency)!

How can you do that?

Contact your creditor(s) as soon as you are having a problem keeping up with your payments.  They may help you get caught up or arrange for you to lower your payments for a while until you get back on your feet financially.

If you know that because of loss of employment or some other catastrophic financial issue that you not only cannot keep up with your payments and it is unlikely that you'll be able to make any payments for a long time, then you need to try and negotiate a SETTLEMENT.

DEBT SETTLEMENT is a method whereby you and the creditor agree on an amount (usually much less than the balance that you owe) that will be paid either in a lump sum or in payments.

DEBT SETTLEMENT is possible to do on your own, but after helping people for over 10 years now, it is very TIME CONSUMING and can be EMOTIONALLY AND PYSICALLY EXHAUSTING!


Please download our FREE e book below:

FREE EBook Debt Settlement  Basics

If after reading the basics about DEBT SETTLEMENT, you feel that you could use some help, just let us know.  We'll be glad to talk with you to see if you qualify for the DEBT SETTLEMENT PROGRAM, and this consultation is...

FREE, with NO OBLIGATION WHATSOEVER!

To summarize:

  • Your wages are exempt from garnishment in Texas
  • Other debts, such as, income taxes, alimony, child support and Federal Student Loans are not
  • You BANK account IS NOT EXEMPT from LEVY after a JUDGEMENT has been awarded, but,
  • YOU CAN AND DO HAVE OPTIONS

 

 

 

photo by Tiffany

 

Tags: wage garnishment, debt, Texas, debt settlement in Texas, debt collector, exemptions, bank levy