Credit companies are having a hard time collecting bad debt and when it comes to the Lone Star state, the possibility of collection becomes even more difficult. Texas credit card laws are among the most strict in the nation. Only a handful of states have followed suit with them.
When a person chooses to charge an item using plastic, it is known as an unsecured debt. If you purchase a car with a bank loan, the car is the collateral against the money you owe. In this case it can be repossessed if the payments are not made. This is not the case when purchases are made using revolving credit.
Federal law holds that a company has the right to take up to 25% of an individuals disposable income to be reimbursed for money owed them. The Lone Star state chose to disregard these laws by opting out of them. Garnishment of wages is strictly forbidden by credit companies. Only money owed to the Federal government; becoming delinquent in child support payments; or owning a student loan can be collected by garnishing a person’s wages.
Another law that is strictly enforced in this state is the inability companies have to take a lien on your home for money due them. There are only certain ways in which your home can be attached. These include defaulting on your mortgage payments or home equity loan, as well as money owed to the Federal government. Failure to pay for work done on your home by a contractor is reason for them to take out a lien too.
If you have allowed an account to become past due, a creditor may place a judgement against any funds you may have in a savings account. The only deterrent to this collection strategy is of the debtor has filed bankruptcy. Texas laws are so strict when it come to the few ways a creditor can collect, that most of them will try and negotiate a deal with the debtor to get some of the debt paid. Even court judgements are of little use to creditors.
Collector’s or their agent’s are also expressly prohibited against harassing a debtor. Neither are they allowed to use threats against your income or residence. If their phone calls become incessant enough to keep the debtors phone ringing persistently, they can actually be charged with harassment and fined up to $500.00. An individual has up to one year to file these charges.
Creditor’s have no choice but to follow the Texas credit card laws with no exception. They all fall under the Lone Star states Financial Code. Although people who owe money find these laws working to their advantage, it is no excuse for running up a debt that they know they cannot repay. Regardless of what our state does or does not do to protect us, the responsibility of paying our loans lies with oneself.
Click here for more information on Credit Card Lawsuit and Court Credit Card and Credit Cards Lawsuit