Many Texas residents may be aware that federal and state laws govern the practices that creditors and debt collectors can engage in if they want to recover from debt. One of those laws, the Fair Debt Collection Practices Act (FDCPA), which protects debtors, was discussed in an earlier blog post. However, in addition to protecting debtors, there are laws in the United States that allow creditors to seek what is rightfully theirs. Therefore, they are allowed to take certain actions to recover outstanding debt.
One way for creditors to recover debt is by taking legal action through the courts. Creditors generally take legal action after they have been unable to recover debt on their own or through debt collection agencies. In the event that a creditor chooses court-based solutions, the bankruptcy court may order one of two common prejudgment remedies, which are known as “replevin” and “attachment.”
When a court orders a replevin, the creditor, who holds the title to a property, will have the right to claim that property if the debtor did not repay his or her debt. However, before seizing such property, creditors usually need clearance from the court unless that property is in imminent danger. In that case, the creditor may proceed without the court’s order. Typically, the county sheriff will conduct the seizure and then hand over the property to the creditor.
Attachment orders, on the other hand, are governed by state laws and vary from state to state. A court issues an attachment order after a hearing. If the creditor’s plea is successful, the court will allow that creditor to seize the property or the title of the property in question. Like in the case of replevin, a court only orders attachment under extraordinary circumstances.
While it is true that credit collection efforts are under the jurisdiction of the FDCPA, which is meant to protect consumers, the fact remains that creditor harassment is a reality. Therefore, in order to avoid such harassment and to keep debt collectors and creditors at bay, it may be a wise decision for a debtor in Texas to retain an experienced bankruptcy law attorney.
Source: FindLaw, “Creditors’ Rights and Collection Options,” Accessed on Aug. 24, 2015