If you’ve been sued by a debt collector in Texas, you’re not alone. Thousands of Texans face debt lawsuits every year, and navigating this legal minefield can be overwhelming. As an attorney with years of experience handling debt lawsuits, I’ve represented countless clients in similar situations. In this blog, I’ll guide you through what you need to know about debt lawsuits in Texas and what steps you can take to protect yourself.
Understanding Debt Lawsuits in Texas
A debt lawsuit typically starts when a creditor or debt collector files a complaint against you in court, claiming that you owe a specific amount of money. You’ll receive a summons, notifying you of the lawsuit, and it’s crucial to respond within the designated time frame—usually 14 to 20 days in Texas.
If you fail to respond, the court may issue a default judgment against you, which means the creditor can take further legal actions to collect the debt, such as garnishing your wages or freezing your bank account.
Key Texas Laws Governing Debt Collection
Texas has unique laws and protections in place for consumers facing debt collection. Some of the most relevant laws include:
- Texas Debt Collection Act (TDCA): This law protects consumers from abusive debt collection practices. It prohibits debt collectors from using threats, harassment, or misleading statements when attempting to collect a debt. Violations of the TDCA can result in penalties against the collector.
- Statute of Limitations: In Texas, the statute of limitations for most debt is four years. This means a creditor must file a lawsuit within four years from the date of the last payment or acknowledgment of the debt. If they file after this period, the case can be dismissed.
- Homestead Exemption: Texas offers some of the strongest homestead protections in the country. Creditors generally cannot force the sale of your primary residence to satisfy a debt.
- Wage Garnishment: Texas is one of the few states that does not allow wage garnishment for most types of debt. However, there are exceptions, such as child support, student loans, and taxes.
Notable Debt Harassment Legal Cases in Texas
Several legal cases have centered around harassment by debt collectors in Texas, including (but not limited to):
Unifund CCR Partners v. Villa
- Who: Unifund CCR Partners (creditor) vs. Javier Villa (debtor).
- What: Unifund CCR Partners purchased a credit card debt from Bank One, which Javier Villa owed. After Villa filed for bankruptcy and had his debts discharged, Unifund sued him to collect the debt. Villa responded by seeking sanctions against Unifund for filing the lawsuit despite his bankruptcy discharge.
- Where: The lawsuit was initially heard in the 111th Judicial District Court of Webb County, Texas.
- When: The initial case was filed, and subsequent events occurred leading to an appeal decided on October 23, 2009, with a rehearing denied on January 15, 2010.
- Why: Villa argued that Unifund acted in bad faith by filing the lawsuit to harass him, as they should have known the debt was discharged in bankruptcy. The trial court agreed and imposed sanctions on Unifund, but the Texas Supreme Court ultimately reversed the sanctions due to a lack of admissible evidence supporting Villa’s claims.
- Learn more at https://casetext.com/case/unifund-ccr-partners-v-villa?q=debt%20harassment%20texas&sort=relevance&p=1&type=case&tab=keyword&jxs=
Montoya v. Bluebonnet
- Who: Deborah Olson Montoya (Appellant) vs. Bluebonnet Financial Assets (Appellee)
- What: Montoya appealed the trial court’s decision to grant summary judgment in favor of Bluebonnet Financial Assets. The case involved a credit card debt that Montoya defaulted on, which was subsequently sold to Bluebonnet, who then sued Montoya for the unpaid balance. Montoya counterclaimed, alleging harassment, violations of the Texas Deceptive Trade Practices Act (DTPA), and intentional infliction of emotional distress, among other things.
- Where: The case was appealed from the 30th District Court of Wichita County, Texas, to the Texas Court of Appeals.
- When: The opinion was delivered on October 28, 2010.
- Why: Montoya argued against the summary judgment, challenging the evidence and the basis of Bluebonnet’s claims, particularly regarding the amount owed and the legality of the debt collection practices. The appeals court upheld parts of the summary judgment but reversed others, citing issues with Bluebonnet’s evidence and Montoya’s claims..
- Learn more https://casetext.com/case/montoya-v-bluebonnet?q=debt%20harassment%20texas&sort=relevance&p=1&type=case&tab=keyword&jxs=
What to Do if You’re Sued for Debt in Texas
If you’ve been served with a debt lawsuit, here are the steps you should take:
- Don’t Ignore the Lawsuit: Ignoring the lawsuit will only make things worse. You must respond within the timeframe specified in the summons.
- Consult with an Attorney: Navigating a debt lawsuit can be complex, and having an experienced attorney on your side can make a significant difference. At Warren & Migliaccio, L.L.P., we offer free consultations to help you understand your options. Call us today at (888) 584-9614 to speak with our team.
- Request Debt Validation: Under Texas law, you have the right to request the debt collector to validate the debt. This means they must provide proof that the debt is yours and that they have the right to collect it.
- Consider Filing a Counterclaim: If the debt collector has violated the TDCA or other consumer protection laws, you may be able to file a counterclaim against them.
- Explore Settlement Options: In some cases, it may be possible to negotiate a settlement with the creditor. An attorney can help you achieve the best possible outcome.
What can happen if you lose a debt lawsuit in Texas?
If you lose a debt lawsuit in Texas, several potential consequences can occur:
- Judgment Against You: The court may enter a judgment in favor of the creditor or debt collector. This judgment legally establishes that you owe the debt, including the original amount, plus any interest, attorney’s fees, and court costs.
- Wage Garnishment: While Texas generally protects wages from garnishment for most types of debt (except for certain debts like child support, federal student loans, and taxes), a judgment creditor can pursue other collection methods.
- Bank Account Seizure: The creditor may obtain a writ of garnishment to seize money directly from your bank accounts. Texas law protects certain exempt funds (like Social Security benefits), but non-exempt funds could be taken to satisfy the debt.
- Property Liens: The creditor can place a lien on your non-exempt real estate property. If you try to sell or refinance the property, the lien must be paid off before the transaction can be completed.
- Seizure of Non-Exempt Property: Texas law exempts certain personal property from seizure, but non-exempt property could be subject to seizure (such as luxury items or valuable collections).
- Credit Report Impact: The judgment will be recorded on your credit report, which can significantly damage your credit score and remain on your report for up to seven years.
- Settlement or Payment Plan: Even after losing the lawsuit, you may still negotiate a settlement or payment plan with the creditor. This could help you avoid some of the more severe consequences like bank account seizures or liens.
- Post-Judgment Discovery: The creditor may use post-judgment discovery methods, such as depositions or written interrogatories, to gather information about your assets, employment, and financial situation to enforce the judgment.
Responding promptly to a debt lawsuit in Texas is crucial, as ignoring it can lead to a default judgment. Consulting with an attorney experienced in debt defense can help you navigate your options and protect your rights.
Call A Debt Lawsuit Lawyer Now
Facing a debt lawsuit in Texas can be daunting, but you don’t have to go through it alone. Understanding your rights and options is the first step in protecting yourself. At Warren & Migliaccio, L.L.P., we’re here to help. Remember, the sooner you act, the better your chances of a favorable outcome. Don’t wait—get the legal support you need today. Contact us at (888) 584-9614 for a free consultation and let our experienced team guide you through the process.
