What Creditors Need to Know About Debt Collection in Texas

Texas is known as being one of the most difficult states to collect debts in. Even if you went to court to obtain a judgment against a debtor, then you may still encounter difficulties in actually turning the judgment into money, especially if you’re in another state and trying to collect in Texas.

The reality is that federal and state laws tightly restrict the actions debt collectors can take, but with the right legal help, you can still collect what is rightfully yours in an ethical and professional manner.

To collect from an elusive or uncooperative debtor, it is crucial that you know what is permitted and what is not permitted by law.

In Texas, engaging in prohibited debt collection practices can result in civil and criminal penalties. To protect yourself and your business, speak with an experienced debt collection attorney before taking action.

The Fair Debt Collection Practices Act is the federal law that establishes guidelines for what is and what is not acceptable in debt collection efforts. This law only covers collectors who have been hired by debt collection agencies and lawyers who have been hired to collect a debt. Texas laws are broader in reach.

The Texas state laws that restrict creditor actions are the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act. These statutes apply not only to collection agencies and lawyers, but also to anyone who is trying to collect a debt.

What communication rules should creditors be concerned about when trying to collect a debt?

The state and federal laws are similar in that they generally prohibit abusive, harassing and fraudulent collection practices. Creditors may also encounter legal trouble with regard to how and when they communicate with debtors. The law specifies the time and manner in which a debtor can be contacted. For example, collection-related phone calls should generally not be made before 8 a.m. or after 9 p.m., unless those before- and after-hours times are known to be more convenient for the debtor.

Consumer protection laws also control the manner in which creditors can acquire location information about debtors. For example, in efforts to obtain a debtor’s location information from someone other than the debtor, a collector is not allowed to:

• Send a post card
• Communicate more than once with the third party unless the debtor requests otherwise, or unless the information provided by the third party is believed to be incomplete or erroneous
• Indicate in the communication with the third party that the collector is a collector or that the communication relates to debt collection

For more information about legal issues related to collecting debts in Texas, please see Slater Pugh, Ltd. LLP’s overview of commercial debt collection.