Professor Richard M. Alderman, Associate Dean at the University of
Houston Law Center, who is known to many as "The People's Lawyer", answers your most common questions. If you have a question pertaining to the law in Texas, please e-mail Richard at peopleslawyer@www.law.uh.edu. This page answers your questions on Debt Collection
|
Banking Bankruptcy Contracts Credit Cards Divorce |
Employee Rights Fraud Liens Loans Medical Leave |
Miscellaneous Property Rights Taxes Wage Garnishment Wills/Probate etc. |
and...
I am being harrassed by collectors, even though I am sending them all that I can. Is this legal?
A. A debt collector does not have to work with you. If you did not pay in full, and they won't take less than the full payment, they don't have to. On the other hand, they have no right to harass or abuse you. They always can sue, but that is usually throwing good money after bad. Hopefully, they will work with you once they know you are making reasonable efforts to pay.
Q. I owe a credit card company a lot of money. The debt collector said he will take all the money I have in the bank, and put a lien on my house. Help.
A. First, until a creditor sues you and wins, it generally may not take any of your assets to collect the debt. Once the creditor sues and gets a "judgment" against you, however, it may take your "nonexempt" property to collect.
Under Texas law, much of your property is "exempt" from your creditors. Primary among the property most creditors cannot take is your home. A credit card company may not take your home, even if it sues you and wins. In fact, threatening to do so probably violates both State and Federal debt collection laws.
On the other hand, money you have in a bank account generally may be taken by your creditors. The major exceptions are your IRA or retirement money. If you were sued, and lost, the credit card company could take the money in your checking account or savings account to satisfy the judgment.
My advice is to talk with the debt collector and try and work out a settlement you both can live with. Let them know you know your rights. If they continue to threaten to take property they cannot take, you should consider your rights under our debt collection laws.
Q. I have an ex-girlfriend that used to live with me. When she moved out she took some of my things. I want them back. Can I sue her in Small Claims Court?
A. You can sue her in Small Claims Court, but the court cannot force her to return your things.
In Small Claims Court you may only sue for money damages. In other words, you cannot sue to try and make someone do something, or stop doing something.
In your case, this means that you may sue your ex-girlfriend for the value of what she took. If the court finds in your favor, it will enter a judgment for you. It may not, however, order her to return your things. Hopefully, however, she will return them to avoid having a judgment entered against her.
Finally, if you want to try and use the courts to force the return of your goods, you will have to sue in either County or District Court. This will probably require an attorney and will be much more time consuming and expensive.
Q. About two years ago a "friend" stole some of my stuff. Is it too late to take him to court?
A. Generally a claim such as this must be brought within two years. I suggest you promptly file your claim and see if the other person objects.
Q. I owe a local store about $1,000. I was paying as much as I could, but it apparently wasn't enough. A few weeks ago I received a letter from a collection agency saying that if I didn't pay in full they would sue me. Now they are calling me every day, bothering me at work, and generally making my life hell. I have told them I am paying them all I can. Now I just want them to stop harassing me. What can I do?
A. Under the Federal Fair Debt Collection Practices Act, a debt collector may not harass you. If you want to stop the harassment, the easiest thing is to send a letter, preferably certified mail return receipt, demanding that they stop contacting you. Under the law, the debt collector must then stop all communication, except to send one more letter telling you what the next step will be.
As you probably know, the debt collector has the right to sue you to try and collect the debt. In most cases, however, once they understand that you are paying all you can afford, they will work with you. I suggest you let the debt collector know your financial situation, let them know how much you will pay and explain that you will continue to pay until you hear otherwise. Hopefully, this will resolve the problem and give you time to pay off the debt in a manner you can afford.
Q. A person I loaned money to won't pay me. What can I do to force him to pay me back?
A. Unfortunately, there really is no way to "force" someone to repay a loan. You do have the right, however, to file a lawsuit and get a judgment against the person.
Because the amount you loaned is less than $5,000 you can file your claim in small claims court, without the assistance of an attorney. Hopefully, the person will pay you once he discovers you are serious about collecting.
Q. How late at night may a debt collector call me? I am being hounded at all hours of the day and night.
A. Under federal law, a debt collector may not call you before 8:00 am or after 9:00 pm.
Q. I have been told that a judgment was entered against me by one of my creditors. How do I find out if this is true?
A. If someone sued you and won, they would get a "judgment" against you. In order to enforce a judgment, it is necessary to file what is known as an "abstract of judgment." This may be filed in any county where you own property.
You can find out if a judgment was entered by checking the records in the county clerk's office where you were sued. If an abstract of judgment is filed, it will be on record in the county clerk's office in a county where you own property.
Q. I am being sued in small claims court in the precinct where the plaintiff lives. The judge is one of his best friends. I thought I had the right to be sued where I live? What can I do?
A. Generally, you may sue someone either where they live, where the contract was to be performed, where the problem arose, or where the work was to be done. If the problem arose where you live, you have the right to be sued there. I suggest you speak with the clerk of the court about a "change of venue" to get the proceeding moved to the proper precinct.
Q. Can a creditor take a person's homestead after his death? Are the heir's liable for any judgments against the deceased?
A. No. As you know, a person's homestead generally may not be taken by his creditors, even if they sue and win. The same rule applies after a person's death. The homestead will pass to their heirs free of the claims of creditors. Of course, the homestead will still be subject to any mortgage on the property.
A person's heirs also are not liable for any judgments against the deceased. The judgments must be paid from the estate, and if there is not enough money they will go unpaid.
Q. We recently loaned a friend some money so that his daughter could come on a vacation with us. He promised he would pay us back in two to three months. It has now been much longer than that, and we have not seen a penny.
A. Sounds like a case for small claims court. An oral promise to pay back a loan is enforceable.
I suggest you contact the person one more time, in writing. Make it clear that you expect to be paid as promised, and if you are not you will file a claim in small claims court.
Q. A so-called friend asked to use my credit card to rent a car. She told me it would only be for two days and that she would bring me the cash. To make a long story short, she kept the car for several weeks and ran up a bill of over $900. I had to pay the credit card bill and she still has not paid me back. What can I do?
A. Small claims court is made for problems like yours.
I suggest you send your so-called friend a certified letter and let her know you expect to be paid, and that you will consider legal action if you are not. If she still doesn't pay you, you can file a claim in small claims court. If you prevail, you will be entitled to the amount you paid plus court costs.
Although it may be difficult to collect even after you win in small claims court, your judgment will begin earning interest and will effect your friend's credit until it is satisfied. Hopefully, however, this matter can be settled without the need for any legal action.
Q. We sued a former tenant in small claims court. The judge entered a judgment in our favor for $3,000. We filed an abstract of judgment as we were told to do. The person still has not paid. The court told us there is nothing else we can do. Why did we waste our time and money to sue?
A. In Texas, it can be difficult to force someone to pay after you win in court. There are, however, some things you can do to force payment.
You have already taken the first step, filing an "abstract of judgment." This gives you a lien on any real estate the person owns and makes the judgment public record. You should consider filing your abstract anywhere the person may own or acquire real property.
If the person you sued has any real property, other than his homestead, your abstract creates a lien on that property and can force the sale of it.
If he doesn’t own any real estate, other than his homestead, there are several other devices you should consider.
First, if you know where he banks, or if you can find out where, you can get a "writ of garnishment." This lets you take the money he has in a savings or checking account to pay your judgment.
Next, even though there is no wage garnishment in Texas, many people are self employed and do not work for "wages." If the person you sued is self-employed, you can use the writ of garnishment to go after any customers or clients that may owe him money.
Texas law also allows you to take any "non-exempt" property the person has to satisfy the judgment. Basically, up to $30,000 of an individual’s property is exempt, $60,000 for a family. The person you sued, may, however, have property not considered exempt under state law.
Finally, there is a device called a "turn-over order." This lets the judge order the person to turn-over non-exempt property to you. For example, if you know he is receiving money from work as an independent contractor, but you do not know where (so you cannot get a writ of garnishment), you can ask the court to order him to turn over a portion of this money.
Texas is very favorable to debtors when it comes to forcing them to pay a judgment. This doesn’t mean you shouldn’t try and collect. I suggest you go back to the court and try one or more of these collection devices.