Being contacted repeatedly by collections agents may be the result of not paying your credit card bill. In addition to numerous calls and letters, you should have another concern. Your credit card issuer can take you to court to force you to pay your balance. By this time, you may be faced with owing more due to the interest and penalties that accumulate over time. Know your rights as a consumer residing in Texas and understand the statute of limitations in your state to protect yourself from unwarranted acts of collections.
Collections
Collection practices in the state of Texas are governed by the Texas Debt Collection Act. It's legal to be contacted by debt collectors, but there are parameters to the type of actions that they can take to make you pay your bills. For example, collection agents cannot lie to you to collect a debt. If the debt is too old and the statute of limitations has passed, then you are no longer responsible for paying back the credit card companies.
Satute of Limitations
A statute of limitations is the length of time that a creditor has to try to force you to pay your bill. Collections agents will take action against you before the statute of limitations expires. Therefore, you can be taken to court and have a judgment placed against you for the money that you owe. In Texas, the statute of limitations on debt is four years, so your creditor can sue you for not paying your bill any time up to four years after the date of your last payment.
Garnishments
In some states, a credit card company with a judgment against you is allowed to garnish your wages until your account is made current. However, in Texas, wage garnishments are not permitted to pay back credit card debt. Therefore, your creditors may choose to place a lien on your home. If they are successful, then they will be repaid upon the sale of your home after your mortgage holders, and any other liens that came before, are satisfied.
Negotiate
It may be in your best interest to stop credit card debt collections before the statute of limitations passes. Besides negatively impacting your credit rating, you risk allowing the collection process to disrupt your life and risk your home. It may be possible to negotiate a debt settlement with your credit card company before it's too late. Call the customer service line or collections department, if your debt has not been sold to a third-party agency, and tell them that you cannot afford to pay your bill. However, say that if the balance on your account were less, you might be able to settle it right away. Some credit card companies would rather settle on a low amount than risk collecting nothing.
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