Creditor and debtor law includes the rights and obligations of (1) creditors who extend credit and make loans to consumers and businesses and (2) consumers and businesses who seek credit and loans for their personal and business finances. Creditor/debtor law consists primarily of state and federal statutes.
In Texas, creditor and debtor law is governed by both state statutes and federal laws. Creditors are individuals or entities that lend money or extend credit, while debtors are those who owe money or have taken out loans. Texas law provides specific regulations on how creditors can collect debts, including the practices they can employ and the timelines they must adhere to. For example, the Texas Debt Collection Act outlines lawful debt collection practices and prohibits certain abusive tactics. Additionally, Texas has homestead laws that protect a debtor's primary residence from being seized by most creditors to satisfy debts. On the federal level, laws such as the Fair Debt Collection Practices Act (FDCPA) and the Truth in Lending Act (TILA) offer protections to consumers, regulating how debts can be collected and requiring clear disclosure of credit terms. These laws work in tandem to balance the rights and responsibilities of both creditors and debtors, ensuring fair transactions and protecting against exploitation.
