A good credit score is essential for obtaining loans, credit cards, and even renting an apartment. But maintaining good credit can be challenging, especially when facing debt collection.
Debt collection is a process in which a creditor attempts to recover unpaid debts from a debtor. In Texas, debt collection is regulated by the Texas Debt Collection Act and the Fair Debt Collection Practices Act (FDCPA). These laws establish guidelines that debt collectors must follow when collecting consumer debts.
In 2022, the state of Texas implemented new debt collection laws that significantly impact how consumers are approached and pursued by debt collectors. These laws aim to protect consumers from abusive or deceptive practices by debt collectors, while giving them more control over their credit and finances.
At The Phenix Group, we understand debt collection’s impact on your credit score and overall financial well-being. We offer the best credit repair in El Paso, Texas.
This article will help you understand Texas’s new debt collection laws and how they may affect you. We’ll discuss the key changes in these laws and how they can impact your rights during debt collection proceedings.
What’s New as of 2022
Increased Transparency in Debt Collection Communication
The new Texas debt collection laws require debt collectors to offer additional information about the debt they’re attempting to collect. This includes a breakdown of the original amount owed, any added interest or fees, and the name of the original creditor.
Debt collectors must also offer consumers a notice of their rights under the Fair Debt Collection Practices Act (FDCPA) and the Texas Debt Collection Act.
Limitations on Debt Collection Calls and Text Messages
Under the new Texas debt collection laws, debt collectors are limited in the number of calls and texts they can make to consumers weekly. Debt collectors are prohibited from making more than seven phone calls per week to a consumer regarding a single debt. Debt collectors are also prohibited from sending more than three text messages per week to a consumer regarding a single debt.
Prohibition of Threats and Harassment
Debt collectors are prohibited from using abusive or threatening language when attempting to collect a debt. Under the new Texas debt collection laws, debt collectors cannot use profanity or threaten violence against a consumer. They’re also prohibited from using false or misleading statements to intimidate consumers into paying a debt.
Requirement of Validation Notice
Debt collectors must send a validation notice to consumers within five days of their initial communication. The validation notice must contain information about the debt being collected, including the original creditor’s name, the amount owed, and a statement informing the consumer of their right to dispute the debt.
Debt Collection Time Limitations
These laws limit the time debt collectors have to collect on a debt. Debt collectors are now required to file a lawsuit within four years of the date of default on the debt in order to collect in full. If the debt collector fails to file a lawsuit within four years, they may be barred from collecting on the debt altogether.
Expanded Consumer Protections
Consumers have expanded protections when dealing with debt collectors under these new laws. Consumers can request that debt collectors cease all communication regarding a debt.
If a consumer makes a request to cease the communication in writing, the debt collector must stop all communication. The only exception would be to offer legal notice or to inform the consumer the debt collector is taking legal action.
Restrictions on Wage Garnishment
Wage garnishment is limited to 50% of a consumer’s disposable earnings or thirty times the federal minimum wage, whichever is less. This means debt collectors can’t garnish a consumer’s entire paycheck or leave them with an amount below the poverty line.
Closing Thoughts
Texas’s new debt collection laws offer consumers important protections when dealing with debt collectors. These protections include increased transparency, limitations on communication, and expanded consumer rights.
If you face debt collection, you must remember your rights and seek legal assistance if necessary. With the help of these new laws and the expertise of The Phenix Group, you can take control of your finances and improve your credit!
Looking for more information on what a good credit score is in Texas and the statute of limitations on debt in Texas? Be sure to take a look at our recent posts.