Tyler residents struggling to manage their debt are likely familiar with the types of tactics employed by collection agencies. On the one hand, creditors' rights do include attempting to contact the debtor (within certain limits) and perhaps even selling one's debt to a third-party company to collect. But both state and federal laws regulate the practice of collecting debt. Let's take a look at these two levels of legal protection -- as a general background on the subject only, not specific legal advice.
The Texas Debt Collection Act forbids collection efforts that rise to the level of abuse or fraud. That includes swearing at a debtor, accusing him or her of crimes or fraud, threatening a debtor with arrest or violence or threatening to repossess property without actually initiating the legal process to do so. Harassing phone calls are also prohibited, such as anonymous calls, repeated calls or calling collect and not revealing the reason until after the caller accepts the charges.
In addition, debt collectors cannot try to trick a debtor by hiding or falsifying their identities or the identities of the creditors. They have to be truthful about the actual amount owed, and they are prohibited from sending any purportedly legal documents that did not come from a court. They cannot threaten wage garnishment unless the debt is related to student loans, taxes or child support, and -- with just a few exceptions -- they cannot threaten to seize a Tyler resident's home if it has been declared a homestead.
Those are just a summary of the protections provided by Texas law; we will look at federal law in a follow-up post. And, of course, bankruptcy proceedings offer consumers an automatic stay, prohibiting virtually all collection attempts, as well as the possibility of a fresh financial start.