Consumer debt consists of personal debts for goods purchased for personal or household consumption—as opposed to debts incurred for the operation of a business. Common examples of consumer debt include (1) credit card debt; (2) student loans; (3) home mortgage loans; (4) car or auto loans; (5) payday loans; (6) medical debts; and (7) unpaid utility and telephone bills.
In Texas, consumer debt is regulated by both state statutes and federal law. Credit card debt, student loans, home mortgage loans, auto loans, payday loans, medical debts, and unpaid utility and telephone bills are all considered consumer debts when they are for personal or household use. Texas law provides certain protections for consumers, such as the Texas Debt Collection Act, which prohibits abusive practices by debt collectors. Additionally, the Texas Finance Code regulates credit services organizations and includes provisions related to payday loans and auto title loans. Federal laws such as the Fair Debt Collection Practices Act (FDCPA) also offer protections against abusive debt collection practices. Texas has generous homestead protection laws that can shield a consumer's primary residence from being seized to pay off certain types of consumer debt. However, there are exceptions, such as for debts secured by the property like mortgage loans. Consumers facing issues with debt in Texas may seek the advice of an attorney to understand their rights and obligations under the law.
