If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a “debtor”. If you fall behind in repaying your creditors, or an error is made on your accounts you may be contacted by a “debt collector”.
You should know that in either situation the Fair Debt Collection Practice Act and state law require that debt collectors treat you fairly by prohibiting certain methods of debt collection. Of course, the law does not forgive any legitimate debt you owe. The laws apply only to personal, family, and household debts. This includes money owed for the purchase of an automobile, for medical care or for charge accounts.
A debt collector is any person, other than the creditor, who regularly collects debts owed to others. This can include attorneys who collect debts on a regular basis or a company that purchases debt after it is already in default.
You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Keep a copy of your letter and send the original to the debt collector by certified mail, return receipt requested. Once the debt collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a debt collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.
If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a debt collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Debt collectors usually are prohibited from contacting such permissible third parties more than once. In most cases, the debt collector is not permitted to tell anyone other than you and your attorney that you owe money.
Within five days after you are first contacted, the debt collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe money. A debt collector may not contact you if, within 30 days after you receive the written notice, you send the debt collector a letter stating you do not owe money. However, a debt collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
The debt collector may not use unfair or unconscionable means to collect a debt.
The following are some specific examples of collection practices that are prohibited:
Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, debt collectors may not:
- make threats of violence or harm against the person, property or reputation
- publish a list of consumers who refuse to pay their debts (except to a credit bureau)
- use obscene or profane language
- repeatedly us the telephone to annoy someone
- telephone people without identifying themselves
- advertise your debt
Debt collectors may not make any false statements when collecting a debt. For example, debt collectors may not:
- falsely imply that they are attorneys or government representatives
- falsely imply that you have committed a crime
- falsely represent that they operate or work for a credit bureau
- misrepresent the amount of your debt
- misrepresent the involvement of an attorney in collecting a debt
- indicate that papers being sent to you are legal forms when they are not
- indicate that papers being sent to you are not legal forms when they are
Debt Collectors May Not State
- you will be arrested if you do not pay your debt
- they will seize, garnish, attach, or sell property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so
- they cannot garnish wages in Texas except for child support, IRS taxes owed for the previous three years, or student loans
- actions such as a lawsuit will be taken against you which legally may not be taken, or which they do not intend to take
Debt collectors may not:
- give false credit information about you to anyone
- send you anything that looks like an official document from a court or government agency when it is not
- use a false name
Debt collectors may not engage in unfair practices in attempting to collect a debt. For example, collectors may not:
- collect any amount greater than your debt, unless allowed by law
- deposit a post-dated check prematurely
- make you accept collect calls or pay for telegrams
- take or threaten to take property unless this can be done legally; or contact you by postcard
Report any problems you have with a debt collector to the:
Texas Attorney General’s Office
Federal Trade Commission
1999 Bryan Street, Suite 2150
Dallas, Texas 75201
or call toll free
New Justice Court Rules for Debt Collection Cases
In addition to the information already required for justice court petitions, for debt claim cases the debt collector’s petition must include:There are special rules in justice court for debt cases. A “debt claim case” is a lawsuit brought by people who are in the debt collection business. Debt collectors, collection agencies, assignees (someone who acquires ownership of the debt from someone else), and financial institutions are examples of people in the debt collection business. These special rules do not apply to an individual making a one-time loan to another individual.
For credit card suits: The account or card name; the account number; (which may be masked); the date of issue, if known; the date of charge-off or breach of the account, if known; the amount owed as of a specific date; and whether they are asking for ongoing interest.
For suits on a promissory note: the date and amount of the original loan; whether repayment was accelerated; the date final payment was due; the amount due as of the final payment date; the amount owed as of a specific date; and whether plaintiff seeks ongoing interest.
If the plaintiff is seeking ongoing interest, the petition must also include: the effective interest rate claimed: whether the interest rate is based upon contract or statute; and the dollar amount of interest claims as of a date certain.
If the debt was assigned (sold to or transferred to a new owner), the petition must also include: that the debt claim has been transferred or assigned; the date of the transfer or assignment; the name of any prior holders of the debt; and the name or description of the original creditor.
If the defendant (debtor) does not file an answer to a claim by the answer deadline, the judge must render a default judgment against the defendant/debtor. The judge does not have to have a hearing to enter a default if the plaintiff has submitted sufficient written evidence to prove its claim. If the judge does not enter the default without a hearing, the plaintiff may request a hearing and appear in person or by telephone or other electronic means to prove its case.
Evidence may be in the form of a sworn statement or live testimony and may include documentary evidence. A sworn statement may be made by the plaintiff or its representative, a prior holder of the debt or its representative, or the original creditor or its representation, that attests to the following: the documents were kept in the regular course of business; it was the regular course of business for an employee or representative with knowledge of the act recorded to make the record; the documents were created at or near the time or reasonably soon thereafter; and the documents attached are the original or exact duplicate of the original.The evidence can be either attached to the petition or submitted to the court after the defendant/ debtor has defaulted.
A judge is not required to accept a sworn statement if the source or method of preparation indicates a lack of trustworthiness but a judge may not reject a sworn statement only because it is not made by the original creditor or because the documents attested to were created by a third party and subsequently incorporated into and relied upon by the business of the plaintiff.
The amount of money owed is established by evidence:
That the account or loan was issued to the defendant and the defendant is obligated to pay it;
That the account was closed or the defendant breached the terms of the account or loan document;
Of the amount due on the account or loan as of a date certain after all payment credits and offsets have been applied;
and, That the plaintiff owns the account or loan and, if applicable, how the plaintiff acquired the account or loan.
If a defendant who did file an answer on time fails to appear for trial, the court may proceed to hear evidence on liability and damages and render judgment.
If the defendant files an answer or otherwise appears in a case after his answer was due but before the judge signs a default judgment, the judge must set the case for trial.