The First Step In Understanding Texas Debt Laws: Hire A Lawyer
It’s scary when the bills start to mount up, and scarier still when you start getting nasty letters and phone calls from companies you can’t afford to pay. Rather than trying to find a solution on your own, consult with an expert on Texas debt laws. This will give you a better idea of the choices open to you.
This means that the first thing you need to do when the creditors start pounding at the door is get a lawyer. A lawyer will look at the claims your creditors are making and see if they are valid. Some creditors, for instance, try to collect money after the statute of limitations on a loan has expired. A lawyer can spot this trick in an instant and advise creditors to back off.
Even if the lawyer determines you do owe the money, you will benefit from having legal counsel in another way. The Fair Debt Collection Practices Act stipulates that, once a collection agency is aware that you have hired a lawyer, they must direct all their letters and phone calls to the lawyer. In other words, they have to stop bothering you. If the collection agency breaks this law, it can face harsh financial penalties. Therefore, getting a lawyer can also get you a little peace of mind as you work out your problems.
Once you have retained an attorney, you can talk to him or her about your options. One option is settlement. Rather than walk away with nothing at all, creditors are usually willing to accept a portion of what they are owed and write off the rest. Creditors may also be persuaded to waive exorbitant penalty fees and interest amounts. Some lawyers can get creditors to settle for as little as ten percent of the amount owed.
Some lenders, however, are not willing to settle and threaten legal action if they are not paid. At this point, a lawyer will probably speak to his or her client about bankruptcy, which can erase most types of unsecured loans and allow the person in financial difficulty to make a fresh start.
An individual can elect to take either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Due to Texas debt laws, which protect most of the assets of people seeking bankruptcy, Chapter 7 essentially erases a person’s unsecured loans. Chapter 13 restructures those loans. The debtor then works out a payment plan with the court and, over a period of around five years, pays off most of the money owed.
There is one other choice your lawyer may discuss with you: do nothing. Not doing anything to clear up outstanding loans is a gamble, because your creditors can take you to court. If they win a judgment against you, they can collect by arranging for some of your wages to be diverted to them. Not all creditors, however, want to spend the time and money to take you to court. Others take almost every case to court simply on principle. If your lawyer has been around for awhile, he or she will know which creditors are likely to take legal action and which are not. Based on this knowledge, your lawyer can help you decide whether doing nothing is a practical option in your case.
Click here for more information on Texas Debt Laws and Texas Fair Debt Collection Practices Act
