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:

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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

Texas Debt Collection Exemptions

Not only are things "Bigger and Better in Texas", so is protection from debt collectors!

don't mess with texas Living in Texas (I grew up in Dallas) has a lot of advantages, but none as important as protection from debt collectors.

If you are facing overwhelming problems with too much debt and you are fortunate enough to be a Texas resident, then you have certain protection from creditors and debt collectors that other states do not offer!

 

 

For the sake of this article, I'm talking about UNSECURED DEBTS, such as:

  • Credit Cards
  • Store Credit Cards
  • Personal Loans
  • Private Student Loans
  • Medical Bills
  • "Pay-Day" Loans

When you can't make at least the required minimum payments on your unsecured debt, and miss a payment or two, here's what usually happens:

First, the original creditor (Visa, Master Card, US Bank, etc.) will most likely give you a call and send a letter reminding you that your account has become delinquent.  Sometimes the language is very...let's say, "firm or somewhat threatening".  Something like:

Dear Mr. So-n-so:

Your account with XYZ company has become seriously delinquent.  Missing payments on your account can have a negative effect on your credit report.  We understand that you may be facing a difficult time and want to work with you on this matter. 

Please give one of our customer service representatives a call to discuss your options. It is imperative that you bring your account current as soon as possible, to avoid legal action.


OK, so what do you do? 

If you think you will be able to get your account caught up, then give them a call to see what can be done.  Sometimes the creditor is willing to forgive late fees and other penalties if you can bring your account current.

But what if you know you can't "bring your account current"?

It has been my experience, that most people who need help with their debts are not someone who just "over-spent" foolishly.  They are people just like you and me who got into trouble. It's important to know how this process works so that you (or someone you know) is not taken advantage of by a debt collector.

There are all kinds of reasons why people get in trouble with their credit:

  • Loss of employment
  • Loss of a spouse or partner
  • Prolonged illness
  • Disability
  • Retired and on a fixed income not quite enough to keep up!
  • and many other reasons that are beyond your control!

 

After the original creditor has made many attempts to contact you by both phone and mail, they may decide to write-off or charge-off your account and transfer or sell to a debt collector.

Now the DEBT COLLECTOR starts sending "nasty" letters and making call after call!

STOP Collection Calls Free Sample Letter

If you have only missed a payment or two, and have the means to get caught up, I think it is a good idea to contact your original creditor to discuss trying to bring your account current. 

But, I do not believe it is your best interest to call a debt collector.

There are those that disagree with me on this, but my experience in dealing with debt collectors over many years has taught me that they only have one job and that is to get as much money in the shortest period of time.

They don't really care about your situation and for the most part are not sympathetic at all.  In fact, I had one of my retire clients who had also lost her husband of over 50 years tell me that a debt collector told her that she should go get a job and quit making excuses for her debts.  Really?  72 years old and a widow!  And not only that, rather than file for bankruptcy protection as she could have, she has chosen to settle as many debts as possible.

Many debt collectors are fine, professionals and you can work with them. But some are, well... you know!  So, my advice is not to try and call to explain your situation, especially if you live in Texas!


What happens if a debt collector takes LEGAL ACTION?

A debt collector has the option to FILE A COMPLAINT in your county's court.  This is a legal option they can use in order to scare or force you to pay your debt.

Once the COMPLAINT is filed, you will receive a SUMMONS.  The summons will state that the PLAINTIFF (that's the credior or debt collector) CLAIMS that you owe this debt.  It will also state that you have 30 days (some state 20 days) from the receipt of this summons to file an ANSWER.

An ANSWER is a legal brief explaining why you legitimately do not owe this debt.  There is usually a cost to file the ANSWER, and most likely you will need an attorney to file it so it is in the proper "legal" form. About 99.9% of the time, you owe the debt, so there is no need to dispute it.  The key is to know how to handle it.

I've written several blogs over the years explaining what to do if you recieve a summons.  If you live outside of Texas, I would encourage you to not only read about your options, but you will need to take action.

But hey, ya'll...if your a Texas resident, I've got good news!

The purpose of filing the claim is to get you to:

1)  Take action to pay your debt out of fear of what may happen if you don't!

2)  The debt collector hopes to be awarded a JUDGMENT, so they can either GARNISH YOUR WAGES, place a LIEN ON YOUR HOME or even LEVY YOUR BANK ACCOUNT.

In the great state of Texas, you have laws that protect you from creditors like few other states. 

Your wages cannot be garnished for unpaid, unsecured accounts, but even in Texas, they can be garnished for child support or alimony, unpaid taxes and defaulted student loans, so be advised!

Your home is also protected from a lien with a wonderful Texas Homestead Protection!

Although there a some restrictions to the homestead law, basically it means that a creditor cannot apply a lien against your property for unpaid, unsecured debts.

So, your wages and home are protected in Texas, what about your bank account?

As in all states, if your only source of income is from Social Security and/or a Retirement Plan or Fund, Disabily Income, etc. and those monies are directly deposited in your bank account, THEY ARE EXEMPT FROM GARNISHMENT OR LEVY.

HOWEVER, although your wages are exempt in Texas, once they are deposited in your bank account, they would be subject to a garnishment or levy (after a judgment is awarded to the creditor)!

I advise any client who has earned income to NOT DEPOSIT to your bank account with a judgment against you!  I know it can be a hassle, but think about what it would be like to start bouncing checks on Monday after your bank account was FROZEN over the weekend!

Bottom line for all of you Texas Residents:

  • Your home (including a mobile or manufactured home) is exempt from a LIEN
  • Your wages are exempt from garnishment
  • But, you need to take caution with your bank account!

 

Photo credit: 

https://www.flickr.com/photos/tomjmac/3695294596



Tags: debt collection, credit card debt, debt settlement in Texas, exemptions, can a creditor levy my bank account, can social security be garnished, can a debt collector garnish retirement income, debt collection in texas, debt relief in Texas, exemption from garnishment

Can a Debt Collector Garnish Retirement Income?

can a debt collector garnish retirement incomeCan a Debt Collector Garnish Retirement Income?

The answer is NO!

First of all, if you fall behind on your credit card or other debt payments, your creditors don't have the right to automatically garnish any sort of income.  Before a creditor can get a writ of garnishment, they have a whole set of hurdles to get over.

The creditor will write you multiple harsh letters and call you over and over!  They will use many dirty tricks of debt collection to try and collect the debt.

If the collector is unsuccessful in getting you to pay up, then they may decide to file a complaint and you would receive a SUMMONS.  If you owe the debt or you decide not to appear in court to fight the summons, your creditor will be awarded a DEFAULT JUDGEMENT adn they can apply for a WRIT OF GARNISHMENT.

For a great article about What To Do If You Receive A Summons <--- Click This Link

If your only source of income is from one of the following, they CANNOT GARNISH IT!!!

  • Social Security benefits
  • Supplemental Security Income (SSI)
  • Welfare or public assistance
  • Spousal support or child support
  • Public or private pensions
  • Veterans benefits and/or loans
  • Disability proceeds of life insurance policies
  • Cash surrender value of life insurance policies

WARNING:

If you deposit your retirement income (pension, Social Security...) together with any other source of income (part-time job...), then THE ENTIRE ACCOUNT COULD BE SUBJECT TO A BANK LEVY!

As long as you DO NOT CO-MINGLE your retirement income with any other source of income, then the retirement income is safe!

If you are struggling to pay off your debt, or know someone who is being threatened with a garnishment, our Debt Settlement team can help you settle your debts for 50% or less that what you owe!  Give us a call at 1-877-492-4109 or click this link for a FREE Debt Consultation.

can a debt collector garnish social security

 

 

 

Tags: stop the collection calls, can a debt collector garnish retirement income, default judgment