It can be scary to face debt collectors. Creditor harassment is real, and it often leaves Texans on the edge of their seat frightened for their financial future. These debt collection practices may involve threats, late night phone calls and even personal visits that are intimidating in nature. The whole debt collection process can be embarrassing, too, especially when others find out about it and an individual continues to struggle to make payments.
Fortunately, a recently signed bill right here in Texas may help alleviate some debt collection practices. The law, which goes into effect in September, prevents a debt buyer from suing an individual in an effort to collect debt after the statute of limitations has run, which is currently set at four years after the most recent payment on the debt. Even if a debtor makes a payment on the debt after the statute of limitations has run, the debt buyer cannot restart the clock and initiate an action. The new law also specifies that if a debt buyer tries to collect a debt where a formal action is barred, those efforts can only occur after written notice is provided to the debtor notifying them of the legalities of the matter.
The law also provides an explanation for “debt buyer.” The important thing to remember here is that the definition is pretty broad, meaning that this new law will apply to most parties who purchase or acquire consumer debt from a creditor.
For Texans, this means that even though their debts may not be forgiven, they may not be legally obligated to repay some debts. This doesn’t mean that they won’t face debt collectors, and their credit score will likely take a big hit if they continue to not repay debt. Oftentimes, those who are struggling with overwhelming debt can find true relief by pursuing personal bankruptcy. Law firms well-versed in Chapter 7 and Chapter 13 bankruptcy are available to provide guidance for those who want to learn more about the process.