Debt collection is the process by which a person or entity who is owed money or property seeks payment for the debt. Debt collection may be performed by the person or entity who is owed the debt (the creditor), or may be performed by a third-party debt collector hired by the creditor to collect the debt on behalf of the creditor. Sometimes creditors sell the debt to another entity at a discounted value, and the entity that purchases the debt becomes the creditor.
Debts that are often the subject of debt collection efforts include (1) credit card debt; (2) car or auto loan debt; (3) medical debt; (4) student loan debt; (5) unpaid utility and telephone bills; and (6) personal loan debt.
If you owe money, you have a legal obligation to repay it. But state and federal laws—such as the Fair Debt Collection Practices Act—prohibit debt collectors from using deceptive or abusive tactics to collect the debt.
In Texas, debt collection is regulated by both state and federal laws. The federal Fair Debt Collection Practices Act (FDCPA) provides a framework that protects consumers from abusive, deceptive, and unfair debt collection practices by third-party debt collectors. This includes restrictions on the times debt collectors can call, prohibitions on the use of threats or obscene language, and the requirement that collectors must validate the debt if requested. Texas state law complements the FDCPA with the Texas Debt Collection Act, which similarly prohibits abusive practices and extends the rules to include original creditors, not just third-party collectors. Texas law also provides consumers with the right to dispute the debt and request verification. Creditors and debt collectors in Texas must adhere to these regulations when attempting to collect various types of debts, including credit card, auto loan, medical, student loan, utility bills, and personal loan debts. If a debt collector violates these laws, consumers may have the right to seek damages through legal action. It is advisable for individuals dealing with debt collection in Texas to understand their rights under these laws and to consult with an attorney if they believe their rights have been violated.
