Debt collection laws for accounts that go into default vary from state to state with different laws applied to both secured and unsecured debt. Within the state of Texas you, the consumer or debtor, are largely protected from more extreme debt collection measures when dealing with credit card account issuers.
Credit Card Debt Collection Basics
When you quit paying your credit card bills, the account goes into default after a period of time specified on your credit card company's cardholder agreement. After the account goes into default, the card issuing bank steps up collection efforts in the form of repeated mailings and phone calls. When the collection efforts go unanswered, most creditors refer accounts to third-party collection agencies who again attempt to collect on the debt. The third-party collection agencies are typically the creditors who try to collect through suits and judgments.
Unsecured Debts
Debts can be broken into two different categories, secured and unsecured debt. Within the state of Texas, the category the debt falls into determines the collection powers allotted to a creditor. Debts attached to your home through an agreement between you and the creditor are secured as are debts involuntarily attached to your home by a court's judgment or through tax issues. Debts not tied to your property through agreements or judgments are categorized as unsecured.
Texas Debt Collection
The state of Texas has debt collection laws that are highly favorable to the consumer. Texas law keeps the wages of a debtor from being garnished and protects the debtor's home with full homestead protection. Homestead protection prevents the creditor from forcing the sale of your primary home.
Liens in Texas
Credit card debt is considered unsecured debt as it is not directly connected to you home. The bank that issued your credit card cannot put a lien on your property as a method of debt collection. If your creditor sues you, however, the court may issue a judgment against you that allows the card issuer to put a lien on your property. When this happens, you are not forced to sell your home to pay the debt. Instead, you must pay the creditor off with any profits you earn from a future sale or future refinancing of your home.
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