Debt Consolidation

Texas Credit Card Debt Laws

As compared to other states in the United States of America, consumers get better protection under Texas credit card debt laws, especially when it comes to protection against liens and garnishments for debts related to credit cards. Though the Fair Debt Collection Practices Act introduced by the FTC (Federal Trade Commission) is applicable in Texas, the state has enacted additional laws that ensure much stronger protection to debtors. If you notice that your lenders are violating the state collection laws, you have the legal right to file a compliant against them not only with the Federal Trade Commission but also with the Texas Office of Consumer Credit Commissioner. Following is a brief rundown on some of the most common points of the Texas laws that you must be well aware of, especially if you are a resident of this state and are struggling with overwhelming amount of credit card debt.

Credit Card Payments

As per Texas credit card debt laws, the debtor has to be very careful while making payments toward credit card debts. If they are issuing a check for the payment and the check bounces because of non sufficient fund in the debtor’s bank account, it is considered as a criminal offence. In such cases, lenders have the right to file a criminal lawsuit against the debtor. Besides that, if a payment plan has been agreed upon between the collection agency and the debtor, the collection agency has the right o accept or refuse any payment made by the debtor if the amount of the payment is less than what has been agreed upon. In such cases, the credit card debt collection agency can demand the debtor to make full payment.

Legal Rights Of Debt Collectors

Though it is true that Texas credit card debt laws have been designed in a way to provide optimum protection to borrowers, the laws provide certain legal rights to debt collectors also. For example, even if the borrower is challenging the debt, the debt collectors have the right to file a lawsuit against the debtor for payment. Besides that, if you want to challenge a particular debt, you must do so within one month of time after getting a notice regarding the same. If the challenge is not filed within this time frame, the debt collectors have the right to pursue payment. It is also important to note that credit card debt collection agencies also have the right to access the credit reports of the borrowers from major credit reporting companies.

Protection To Borrowers

As per Texas credit card debt laws, the debt collectors cannot recover debt by liquidating or garnishing retirement funds of the debtor, such as 401k accounts and other individual retirement accounts. These funds are also exempted in case the debtor chooses to avail bankruptcy protection. However, here it is important to note that these restrictions are applicable on the debt collectors only; if the borrower wants to use those funds to pay off credit card debts, they are free to do so.

Legal Limits On Garnishment

Texas credit card debt laws strictly prohibit collection of this type of debt through garnishment. However, there can be certain exceptions in some cases. For example, if electronic access has been provided to the lenders by the debtors, the lenders do not need to wait for approval for garnishment from court; they can directly withdraw full payments from the debtor’s bank account.

Statute Of Limitations

In Texas, the statute of limitations for these types of debts is four years. It means if four years have passed and the debts have still not been collected, the creditors lose the right to collect those debts. They cannot sue the debtor for the payments. After four years, debtors cannot be made legally liable to make the payments toward those old debts.

Joint Responsibility In Case Of Married Couples

Even if just one spouse has acquired the credit card debts, both spouses can be jointly held liable to make the payments toward the same. In fact, even if they take divorce and the divorce decree states that the debts are owed by only one of the spouses, debt collectors still have the right to pursue the payments from both spouses. However, if the debts were acquired before marriage, it does not result in joint responsibility.

Overall, Texas credit card debt laws have provided protections to both debtors as well as to creditors. The more you are aware of your legal rights, the better you will be able to protect yourself.


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