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Debtor protections available in Texas

During financial duress, many Texas residents are unable to repay their loans. Delinquency in loan repayment can attract severe consequences for such debtors. One may find himself at the precipice of foreclosure as well as in a debt trap. Assuming that they follow the right legal channels, the creditors who had given the loan to such a debtor have the right to recover their loan by doing things such as auctioning off the assets that belonged to the debtor.

Creditors often prefer not to bring in a debt collection agency. In most cases where debt collection companies are brought in, it has been observed that the entire loan amount along with the principal and interest cannot be fully realized. It is thus in the interest of all parties to come to an understanding where a new repayment plan can be initiated in order to benefit everyone. Many find it beneficial to contact professional help in order to formulate a good repayment plan or to modify the existing plan.

Due to spurious activities by some fraudulent debt collection agencies, Texas authorities enacted the Debt Collection Act to ensure debtor protection. Under the Act, any kinds of coercive or fraudulent method engaged by debt collector in recovering the debt attract heavy penalties under the law. As an example of what kinds of activity this law prohibits, debt collectors have shown that the amount they were planning to recover exceeds the original amount of the debt and interest; such activities are patently prohibited under the Act.

Any act of harassment is prohibited under the Act. Harassment may include using abusive language, a threat or an act of violence, or even deceptive behavior. Debtor protection under the Act ensures that any debt collection agency that engages in such forms of abusive behavior may be appropriately punished.

Source: TexasAttorneyGeneral.gov, "Debt collection," accessed on Dec. 31, 2014

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