FDCPA and Texas Debt Collection Laws

January 16, 2012
By Radack & Borunda, P.C. on January 16, 2012 11:39 PM |

Can I go to jail for not paying a debt? Will a warrant be issued for my arrest tomorrow? Will my wages be garnished if I don't pay my debt immediately?

Most likely, the answer is no. Debt collectors will do almost anything to get you to pay a debt. Of course, there are state and federal laws in place to protect consumers. The Federal Trade Commission regulates debt collection through the Fair Debt Collection Practices Act (FDCPA). In Texas, the Texas Finance Code (TFC) and the Texas Deceptive Trade Practices Act (DTPA) provide even more protections to Texas consumers. The FTC released this video for guidance on how some of the federal laws apply to consumers and debt collectors.

In general terms, the federal law is very similar to Texas laws governing debt collection. However, Texas laws do provide some added protections not otherwise available in other states. For example, it is illegal to garnish wages in Texas. With a few exceptions for taxes and child support, a debt collector may not garnish a Texas consumer's wages.

In addition, the Texas Finance Code provides additional regulations for third-party debt collectors. A third-party debt collector must have a bond on file with the secretary of state in order to collect in the state of Texas. If not, any collection attempt is a violation of the law and actionable under TFC and the DTPA. Also, a consumer may dispute the accuracy of a particular collection item in writing at any time. Upon receipt of the written dispute, the third-party debt collector must cease collection efforts and conduct an investigation of the accuracy of the debt. In Texas, the third-party debt collector must respond with the results of the investigation within 30 days of receiving the consumer's dispute.

If a debt collector fails to follow these Texas or federal laws contact an attorney, the Texas Attorney General or the Federal Trade Commission. In some cases, you can collect from a collection agency instead of the other way around.

For more information see the following helpful links:

http://www.statutes.legis.state.tx.us/docs/fi/htm/fi.392.htm
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
http://www.ftc.gov/