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How To Get Out of Debt: A Texas Debt Settlement Primer
This is the first in a series of articles we will publish on the subject of debt during which we will cover the following topics. The purpose of the series is to guide you through the process of getting out of debt while avoiding the pitfalls, sham practices and charlatans who dominate this type of service. The only caveat is that as Houston Bankruptcy Attorneys we can only advise and provide debt settlement services if you live in the great state of Texas.
Here is a brief overview of what we are going to cover in this series of articles:
- Debt Settlement Primer
- Step-by-step timeline
- Beware of the charlatans
- Fees & Costs
- Interchangeability of terms
- Do’s and Don'ts
There are two sets of debt collection laws that help distressed consumers. They are the Texas Debt Collection Act and the Fair Debt Collection Practices Act.
The Texas Debt Collection Act (“TDCPA”), which as its name implies is a Texas law, may be read here: http://www.statutes.legis.state.tx.us/Docs/FI/htm/FI.392.htm
The Fair Debt Collection Practices Act (“FDCPA”) is a federal law which may be read here:
The laws themselves are pretty straightforward, but there are a few exceptionally important points to remember:
1. Both laws ONLY apply to individual consumers. If you are some type of incorporated entity, like XYZ, Inc. or Joe Bob’s Fisheria, LLC, you are not protected by these laws.
2. Both laws ONLY apply to consumer debts. If someone is calling because you breached a commercial lease, or because you did not make payments on inventory for your business, you are not protected by these laws.
3. The FDCPA only applies to third parties collecting someone else’s debt or to debt buyers. If you owe money on a Discover card, and Discover is calling you, you are not protected by the FDCPA. If Discover hires Beadum Down Collections to contact you regarding the debt, you are covered by this law, because Beadum Down is collecting someone else’s debt. If Discover sells its right to collect the debt to BloodfromTurnip Receivables, and BloodfromTurnip calls you, you are covered by the law because BloodfromTurnip is a debt buyer.
4. The TDCPA applies to original creditors, third parties, AND debt buyers, but it lacks one very important provision found only in the FDCPA--the right to be left alone. If you read through the FDCPA, you’ll see that you have the right to be left alone. So long as you put in writing that you want the debt collector or debt buyer to cease communication with you, they must stop contacting you (be sure to send that writing in a way that you can prove it was received by the collector, such as by certified mail return receipt requested or by fax, where you keep the confirmation page). The TDCPA does not have this provision. Hence, if Discover card is calling you directly, you cannot make them stop. The TDCPA does have a provision that prohibits a creditor from calling repeatedly with the intent to harass or annoy, but it’s hard to know where the line is crossed, and what “repeatedly” means.
5. Both laws give you significant rights. READ THE LAWS. If you take it slowly, they are really not that bad. ALWAYS REMEMBER POINTS 1 AND 2 ABOVE. If you are pressed for time, just read subsection D of the TDCPA, you’ll be amazed at what debt collectors and creditors are not allowed to do. If you are still pressed for time when you look at the FDCPA, consider reading sections 804-808
Click this link to download the Texas Debt Settlement Primer (PDF)