Texas offers more protection to debtors than many other states. It has greater protections against garnishments and liens for credit card debt. The Texas Fair Debt Collection Practices Act is a nearly direct copy of the Federal Trade Commission's Fair Debt Collection Practices Act, with stronger customer protections. Consumers can report violations of collections laws to the Texas Office of Consumer Credit Commissioner as well as the Federal Trade Commission.
Limits on Collections
The statute of limitations for credit card debts in the state of Texas is four years. After this date, the creditor cannot sue, because Texas is a community property state. Credit card debt acquired by one spouse while married in the state of Texas is the joint responsibility of both spouses. Even if the divorce decree states that one spouse is to pay off a credit card debt, the other spouse can still be held liable and can be pursued for the full amount. However, a former spouse is not liable for debt incurred before the marriage.
Limits on Garnishment
In Texas, credit card debt cannot be collected through garnishment. Bank accounts, however, can be garnished. If a consumer gives a creditor electronic access to the bank account, the full credit card debt amount can be taken out of the account without a courts approval for garnishment.
Texas Laws Protecting Debtors
If a debtor declares bankruptcy to shed all debt, including credit card debt, Texas allows debtors to retain their home regardless of how much the home is worth. However, this protection is only for the first home. Second homes, RVs and any other property must be sold to resolve credit card and other debt. However, they can place a lien on the home to be paid at the time of sale.
In Texas, retirement funds such Individual Retirement Accounts and 401k accounts are protected from credit card collections. These accounts cannot be garnished or liquidated by creditors, nor can they be taken in bankruptcy to pay credit card debt. However, the debtor can choose to liquidate these accounts to pay off the debt.
Credit Card Debt Collector Rights
For credit cards, a creditor cannot demand immediate and full payment of the amount owed unless the debtor is in default. Credit card collectors can sue for payment while a consumer is challenging the debt. Consumers challenging a debt must do so in writing within 30 days of receiving the collection notice. If they do not challenge within that time, the collector can pursue payment. Texas law states that credit card collectors are allowed to pull a credit report for a debtor.
Texas Laws on Credit Card Payments
Credit card collectors do not have to accept any payment sent. They can choose to accept credit card payments below the minimum set by a payment plan. However, they can refuse payment and demand the whole payment due. If a check is written to make a credit card payment and it bounces, this can be prosecuted criminally.
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