Business and law

Texas credit card laws are as big and imposing as the state itself. Their laws do much to prohibit creditors from collecting on a debt even when a judgement is involved. Revolving credit companies are very limited in ways they can use to collect debt in our Lone Star state.

Using plastic for purchases has reached an all time high. Unlike buying a car with a bank loan, these purchases have no collateral to back them up. A car could be repossessed for failure to pay but this is not how it works with charged purchases.

Garnishment of wages are also prohibited. Federal law states that creditors can take up to 25% of a person’s disposable earnings. Our Lone Star state is one of the few states that opted out of this law. Garnishing wages is only allowed when a person defaults on child support or owes Federal money in back taxes. Student loans can also be collected through garnishment.

There are also strict laws against taking possession or placing a lien on a person’s home. In fact, your home cannot be touched unless you default on your mortgage or line of equity; owe taxes to the federal government; or you fail to pay a contractor. These are the only conditions under which a lien can be placed against your residence.

The one option a credit company has is the opportunity to attach any funds that you may have in a savings account. Even then, this can only be done if the debtor has failed to file bankruptcy. The Texas laws are so difficult to work around, most creditors will try and negotiate a deal in the hope the debtor will be able to repay some of the funds owed them.

Harassment of a debtor is also prohibited. Collector’s are not allowed to use threats against your home or income. Neither are they allowed to become so consistent in their phone calls that they cause the debtors phone to ring incessantly. The creditor can actually be faced with a fine up to $500.00 for using such tactics. All a debtor need do is file a complaint within one year of each action.

Any company or representative that it chooses to use are liable for charges if any of these Texas credit card laws are broken. The Finance Code of the Lone Star state has to be followed strictly. In defense of charge accounts, if we use them, we should be responsible and pay back the debt.