The first thing to understand is that, if you borrowed the money or incurred the debt, the creditor has a right to be paid, and to be paid in full. In addition to the amount of the debt, the creditor may also be able to recover interest at a higher rate, late fees, and attorney’s fees if the agreement permits the creditor to do so. However, a creditor is not entitled to recover more than the amount of the debt and any authorized fees.

When faced with a debt you cannot repay, the best first step is to contact the creditor. Many creditors (especially larger companies) are willing to work with people who have a good payment history but who are having short­term payment problems, such as the loss of a job or unexpected medical bills. Although they do not have to do so, some creditors will agree to reduce payments or lower the interest they charge, at least for a while. If they agree to do so, ask them to give you something in writing so that you will understand your new obligations.

Also, remember that just because the creditor says you owe money does not mean it’s true—creditors sometimes make mistakes. If you believe that a creditor has made a mistake, look at your bill. Most bills have a specific address stating where to send a complaint. Find the address and send a letter with documentation supporting your position. If you can show that a mistake has been made, the creditor should fix the problem. While this matter is pending, continue to pay the amounts that you agree are due.

If the overdue account gets sent to a collection agency, you have special rights under federal and state law. You may submit a written request for verification of the account, and the debt collector has 30 days to respond. Debt collectors are also prohibited from using profanity, from threatening criminal prosecution or seizure of property, and from harassing those who owe a debt to try to force them to pay. Many private debt collectors will threaten to withhold money from your paycheck until the debt is paid, but this is something they cannot do in Texas.

Both federal and state law provide for monetary penalties for violations of these rules, so keep track of the who/what/when/where/why if you believe the law has been violated. If you wish, you can consult a lawyer in order to determine your rights. The Attorney General will also sometimes help pursue debt collectors. You can call (800) 621­0508 or send a written complaint to the Office of the Attorney General, Consumer Protection Division, P.O. Box 12548, Austin, Texas 78711.

Hounded by debt collection agencies ? Please contact our office for a free legal consultation. 

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