October 11, 2012

Debt Judgment - Texas

Debt settlement is an option for consumers who are in unmanageable debt situations. Debt settlement companies negotiate with creditors on behalf of consumers to settle the debts by 40-60% of the original payment. Usually the consumer opens a separate "debt settlement" savings account at the bank of their choice. They make deposits into the account as the debt settlement company negotiates with creditors, lawyers and collection agencies on behalf of consumers to get the debt settled. Debt settlement does not guarantee results or that collectors will not continue to call. Debt settlement stays on credit report and creditors can still sue for the full balance. Most states have laws that protect the consumer. Texas however, is known as a "debtor friendly state" and has laws that go further than most when it comes to protecting consumers against creditors.

Communication with Creditors

The Fair Debt Collection Practices Act enforced by The Federal Trade Commission prohibits third party debt collectors from contacting a consumer at inconvenient times or places. A third party debt collector includes collection agencies, lawyers and companies that buy delinquent debt and then try to collect it from the consumer. This federal act only applies to third party collectors, not the original debtor. In Texas, debt collection is regulated by the Texas Debt Collection Act. In this state, the consumer has legal protections against the original debtor as well. They cannot harass the consumer with threaten phone calls, call early in the morning or late at night, fail to identify who holds the debt, give a false name or identification, misrepresent the debt, or employ any other deceptive acts. Theses protections go beyond what consumers in other states experience since they apply to the original creditor as well as to the third party collectors.

Property and Wages

Some states allow creditors to take money directly from a debtor's check to get money owed or a consumer could lose their home. In Texas it's handled differently.

Some collectors will threaten to take your home or wages to pay for a debt. In Texas, if you residence has been declared a homestead, it cannot be taken to pay a debt except for debts taken from the purchase of the home (i.e. a mortgage in default) for home improvements, for home equity loans or to pay certain taxes. Wages may be garnished only to pay debts related to court-ordered child support, back taxes, and defaulted student loans. Debt collectors' cannot garnish wages for repayment of consumer debt.

It is best to check with a licenses state of Texas attorney to find out specifics on how to settle debts and judgments in Texas.


Michael Weston provides Judgment Defense in all cities of Texas, USA :