I am getting threatening phone calls from debt collectors. What can they do to me?`

First of all Texas law provides a number of exemptions to protect various assets. Your homestead is exempt from creditors. One (1) vehicle per licensed driver is exempt. There is no garnishment of wages in Texas.

Can debt collectors put me in jail?

More often than not, no. Civil debt is not a criminal matter in Texas. Many payday lenders ask for a postdated check as collateral. This is not Theft by Check under the Texas Penal Code

Can they serve me with process at my job?

Often collectors will threaten to send a process server to your place of business at a certain time and place. A process server will generally serve you wherever they can find you. That being said a private process server is an independent contractor, licensed by the Texas Supreme Court. They are not employees of the collectors. They are not subject to the direct control of the collectors. There is no way a collector could promise when a process server will get to you. In my experience only Texas lawyers with in house collection departments call first. The vast majority of the time when someone calls me having just been threatened with a lawsuit the call is an empty threat. The lawsuit never happens. Usually once Texas Lawyers are involved the game changes and the phone calls stop.

What can I do to research the debt collectors that are contacting me?

First of all anyone claiming to be a lawyer can be researched on the Texas Bar Website. www.Texasbar.com. If they are not licensed in Texas then how do they propose to sue you in Texas? Second, any 3rd party debt collector (anyone other than the person or entity who loaned you the money) must have a bond with the Secretary of State. See http://direct.sos.state.tx.us/debtcollectors/DCSearch.asp Third, look for a registered agent for service of process on file with the Texas Secretary of State, also on the Texas Secretary of States Website.

The debt collector is claiming that a suit has been filed and I will be served. What can I do?

Put the caller on the spot. Ask them who is the attorney filing the lawsuit. Ask them for the case number. Ask them what court the case has been filed in. If they cannot satisfactorily answer these questions,, they are probably not serious about filing suit against you. In order to file a lawsuit a lawyer must be hired, pleadings drafted, a filing fee paid, and a process server hired. Generally once these steps has taken place the phone collectors are out of the loop. Generally, if a debt collection lawsuit has been filed against you then you will be getting solicitation letters from other debt defense attorneys trying to get your business. Often getting a Texas Lawyer involved on the collector side can be to your benefit. One, they are regulated here, and two, they have a better idea of what they can and cannot do and often any negotiations can get more reasonable.

What else can you tell me about dealing with collectors?

Don’t let them intimidate you. Make sure that they are legitimate. Some collectors are fraudulent and have no real affiliation with the debt or the creditor and legal right to collect on it. A fraudulent collector will pocket the money that you give them and it will not be credited to your account. Any collector should be sending you something in the mail within Five (5) days of the first phone call. Every 3rd party debt collector must have a bond with the Secretary of State. Any business should have letters such as LLC, LLP, INC. at end of their name denoting their business structure. Every business should have a registered agent for service of process on file with the Secretary of State. Never do business with any collector who is not willing to do business by mail.

OK, someone came to the door and gave me some official looking documents. They did not ask me to sign anything. It was after hours on a weekend, they were in blue jeans and driving an unmarked vehicle. What are my rights?

Texas law allows for the use of private process servers. They are civilians who frequently have other jobs. They are licensed by the Supreme Court of Texas. They often have more scheduling flexibility than a uniformed Deputy from the Constable’s Office. The Plaintiff that has filed Petition against you may have used the services of a private server. In my experience this is the norm rather than the exception. If you have never heard of the company suing you, it is probably a commercial debt buyer. See the next question.

I have never heard of, much less dealt with, this company that is suing me?

Chances are they are a debt buyer. Debt buyers will purchase large portfolios of debt, generally for pennies on the dollar. In many cases there is little or no supporting documentation, or proof of ownership. While this trend seems to be changing in favor of the collectors, there are different grades of portfolios, and they have different values. Usually debt collection lawsuits take on the personality of the lawyers bringing the suits rather than that of the plaintiff.

I have no assets. Doesn’t that make me “judgment proof?”

I cringe when I hear the term judgment proof. First of all there is nothing under Texas law that exempts land that is not your homestead. Second, there is no exemption or protection for your checking or saving account. If a judgment creditor can find out where you bank they can do a writ of garnishment and take funds out of your account. Just because you have no money in the bank at the end of the month does not mean that you have no money in the bank a few days after payday. Furthermore a Texas judgment is good for 10 years, and is renewable in further increments of ten (10) years. Each collector has a different business model, but often suits are brought simply for purpose of obtaining a judgment, then sold in a judgment portfolio. Often they do not attempt to collect for years. The judgment shows up on your credit report, and probably in a title search as well, if it has been properly abstracted. The judgment becomes problematic when you need credit for a major purpose like a car loan or the purchase of a home. There is a way under Texas law to obtain a partial release of that lien for the sale of a homestead.

Can I just defend myself?

You can. You can also benefit from my experience in defending collection suits. I will make the court appearances. I will answer their discovery. I will serve my own discovery. I will answer their motions and file my own. Chances are I have done it before. Why reinvent the wheel?

What will you do for me?

A collection suit is a lot like a poker game. Part of my job as a collection defense attorney is to force the other side to put their cards on the table. In some cases a mere discovery request is enough to convince a collector to non-suit their case. Other times discovery responses show that the proof of ownership of the account is lacking. Maybe the majority of the debt sought after consists of interest and fees. Maybe the collector is attempting to have documents from one entity introduced with testimony from an employee of another. While I’m not going to go into an in depth discussion of the rules of evidence, this is in many cases an example of inadmissible hearsay. Sometimes it will come to light that the debt is stale and too old for collection, or some other violation exists. Each case is unique, and you need an experienced debt defense attorney reviewing your case to help you evaluate your case. Furthermore I have argued in front of a lot of the local judges, and I have a better idea what to expect in a particular court.

What type of results can I expect?

I can never promise a particular result, but the single most common result I have encountered in a debt buyer suit is a non suit without prejudice. In the context of an original creditor suit a settlement is usually more in order. A number of factors come in to play here, and each case is different, but the vast majority of my clients have been better off because they have hired me.

What effect will this have on my credit report?

It depends. A non suit without prejudice will generally not effect a credit report. A dismissal with prejudice would be a good reason to dispute a tradeline with the Consumer Reporting Agencies. In some instances I have been able to negotiate a tradeline deletion as a part of a settlement, but this is usually in response to a counterclaim. Each case is different.

At one point should we talk bankruptcy?

It is a good idea to have at least a basic conversation about bankruptcy sooner, rather than later. This does not mean I am going to encourage you to file, but it is better to get a big picture idea of your debt picture, income levels, and types of assets sooner, rather than later. Bankruptcy is not all that I do, and it is not a one size fits all solution, but it can be a very powerful tool to discharge or reorganize your debt and put you back in control of your financial future.

There are several different types of Bankruptcy. How can I know which type is right for me?

As a consumer, you will be primarily interested in Chapter 7 or Chapter 13. A Chapter 7 bankruptcy is generally called liquidation. It is usually the most attractive option. You are going to be asked to fill out a pretty lengthy information packet, describing your assets and liabilities, but a Chapter 7 is generally over and done within six (6) months. Any debt that is able to be liquidated (credit card debts, medical bills, personal loans, judgments for old consumer debts, etc.) if the court grants discharge. If neither the courts nor the creditors object a discharge will be granted. On the other hand a Chapter 13 is a three (3) to five (5) year reorganization process. A Chapter 13 is the more attractive option if you are behind on a secured debt. A secured debt is a debt where an asset has been put up as collateral on the debt. Common examples of secured debts are the house that serves as collateral for your mortgage or your vehicle on a car note. A Chapter 13 may be your only option if you have too much income to qualify for a Chapter 7. A means test calculation of your income and certain expenses is one of the first steps when discussing filing for bankruptcy.

What effect will filing for a bankruptcy have on my credit?

Most, but not all, of the clients who approach me about a bankruptcy already have less than optimal credit. The effect of filing for bankruptcy is that you officially hit rock bottom and now can begin to rebuild your credit. The filing itself will be reported on your credit report for 7 to 10 years. In the context of a Chapter 7 a debt that has been discharged will be reported as discharged in bankruptcy or in some instances will just fall off as some creditors may elect not to continue to report the debt. I have had clients tell me that from the time of filing until we meet at the meeting of creditors (6 weeks to 2 months later) that they will often receive numerous offers of credit. How fast you can rebuild your credit depends in part on having a good payment history after you file for Bankruptcy.

I want to buy a new home. I currently have a home. I have a judgment against me on an old credit card lawsuit?

The first question here is were you properly served on the original suit. If you were never served and a default judgment was granted you may qualify for a Bill of Review. A Bill of review is a collateral attack on the judgment. It is a brand new law suit and the debtor has the burden to prove that he or she was not served. Your word against the process servers will not suffice, but something like a hotel receipt for the date of service, or proof that you had already moved might be enough to get the old suit reopened. Another alternative is called an affidavit for partial release of lien for sale of a homestead. There is a process and it takes time. Call me for a free consultation.

I recently pulled my credit report and I noticed a number of oddities. Several of these accounts listed are not mine. I was sued over an old debt but I was ultimately granted a take nothing judgment. Some of these debts are really old. What should I do?

The Fair Credit Reporting Act ensures that you have the right to maximum possible accuracy in regards to your Credit Report. Some of the issues described may be a merged file. This is where your information is mixed with someone else’s. This is especially common where the consumer has a common name, or has the same name as a parent or child. You may also be the victim of identity theft. The cutoff for reporting old debts is seven and one half (7 ½) years from date of first delinquency. The statute of limitations does not start over every time the debt is sold. This is known as re-aging the debt. It is actionable under the Fair Credit Reporting Act. The first step is to dispute the account, also known as a tradeline, with each Consumer Reporting Agency that is listing them. There are numerous CRAs out there, but people primarily think of the Big 3 credit bureaus (Trans Union, Equifax, and TRW). Once a proper dispute has been initiated, a legal duty on behalf both the CRAs and the furnishers (the entity providing the information) to reinvestigate the debt and either delete the debt, block the reporting of it (in case of identity theft), or validate it. Failure to reinvestigate, or failure to have procedures in place to prevent inaccuracy may be actionable under the fair Credit Reporting Act. Furthermore, the FCRA regulates who may view your credit report. The viewing, or pull, of your credit report, must either be with your permission, or for some legally permissible purpose.

A dispute should be done in writing and should be sent to each Consumer Reporting Agency, at its proper address. It should contain enough information about you to properly identify you and the account in question. It is usually a good idea to include your full name, including spelling out your middle name, your full social security number, and any documents you have to support your contention, such as a dismissal order from the court in your case or maybe a copy of an account statement showing that the account was paid.

Please call me for a free consultation!