Debtor/Creditor/Collections Law

Most people owe some type of debt that typically includes car loans, home mortgages, credit cards, or civil judgments.  Creditors who are owed money may seek to collect the amounts they believe are owed in various ways.   However, creditors pursuing their remedies are required to follow various procedures and provide certain notices to debtors.  Texas has enacted statutes that govern debt collection practices and credit reporting and there are federal statutes that apply as well.

Unless you pay the purchase price in full at the time you buy a house or car, you are incurring debt that must be repaid over a period of time as set forth in some type of promissory note.   You are also required to execute a separate agreement that gives the creditor a lien on your property.  In the event payments are not made as agreed, the creditor may take action to foreclose the lien on your property.  In the case of a car, they can seek to repossess your car.  Once the creditor has taken possession of its collateral, the car will be sold and the creditor will apply the proceeds to the balance owed on your contract.  In some cases, the proceeds will be insufficient to pay the full amount you owe and the creditor may pursue you for any remaining balance.

Similarly, on real property that has been financed, creditors may seek foreclosure of the liens created by a deed of trust if payments are not being made as agreed.  These includes both first mortgages and home equity loans.  Each of these types of loans has procedures that must be followed in order for the creditor to foreclose the lien on the property.

Unpaid balances on credit cards are another debt where you may be threatened with legal action.  Unlike home loans or car loans, the creditor typically will not have a lien on your property.  However, it is possible they may be able to obtain a judgment and ultimately be able to seize certain property to satisfy the judgment and the balance owed on the credit card.

Delinquent ad valorem taxes, or back taxes as they are commonly referred to, are a special type of debt.  Even though property owners do not execute any agreement that grants the taxing jurisdictions a lien on their property, a tax lien attaches to all taxable property in this state automatically on January 1 of each year. This lien takes priority over most other liens in Texas and can be foreclosed even on homestead property.  In addition, if you owe taxes on what is labeled as business personal property, the tax authorities can obtain a tax warrant and seize the property on which they have a tax lien with very little notice to you.

If you are being threatened with legal action on any debt concerning a car loan, home mortgage, credit cards, delinquent property taxes, or a civil judgment, contact us to discuss your case options to preserve your rights and remedies. Our offices are conveniently located in Frisco, TX to Plano, Carrollton, The Colony, Little Elm, McKinney, Oak Point, Cross Roads, Prosper, Gunter, and Celina.