Guarding against unlawful debt collection practices in Texas

State and federal laws protect Texans against abuse, harassment and unfair practices from debt collectors, with remedies available for violations.

Falling behind on financial obligations can be incredibly stressful, as many people in Sherman know firsthand. Unfortunately, in addition to this strain, people who are in debt often face frequent and unwanted contact from debt collectors. Some people may even be targeted with questionable or illegal debt collection tactics. Fortunately, Texas law offers consumers numerous protections against these unfair debt collections practices.

Prohibited practices

The Texas Debt Collection Act and the Texas Deceptive Trade Practices – Consumer Protection Act prohibit debt collection agencies and employees from engaging in several practices. These include:

  • Fraud – debt collection agencies cannot misrepresent themselves or the debt owed in order to make a consumer disclose information or pay the debt. Debt collectors may not send misleading documents or make misleading statements.
  • Harassment – consumers are also protected against frequent, nonstop or anonymous telephone calls from debt collectors.
  • Abuse – debt collection agencies may not threaten consumers with arrest, repossession, violence or other illegal activities. Debt collectors also cannot make knowingly false accusations or use foul language when interacting with consumers.

Consumers in Texas are additionally protected under the federal Fair Debt Collection Practices Act. Besides prohibiting abuse, harassment and other unfair practices, the Act bans debt collectors from calling consumers at work, if the collector is aware that the employer does not allow such calls. The Act also prohibits calls between 9 p.m. and 8 a.m., unless there is evidence that those times best suit the consumer’s schedule.

If a consumer chooses to file bankruptcy, he or she gains further protection; bankruptcy creates an automatic stay, which stops all creditor actions for the duration of the bankruptcy proceedings. Debt collection agencies cannot even contact consumers during this time.

Recourse for violations

Unfortunately, debt collectors do not always observe state and federal laws. However, there are several measures in place to discourage or stop violations.

Under the Texas Debt Collection Act, debt collectors may face criminal and civil sanctions for illegal practices. In one notable 2013 case, a debt collection agency based in Plano was fined $3.2 million for unlawful tactics. According to CNN, the agency called consumers during work, at odd hours and even after their debts had been paid. During the settlement, the agency was ordered to investigate the status of debts before contacting consumers and cease contact if consumers requested it.

Under Texas law, the victims of violations like these may pursue injunctions to stop the illegal practices. Anyone who believes a debt collection agency has crossed the line into unfair or illegal practices should consider speaking to a bankruptcy attorney with experience in creditor harassment. An attorney can provide advice on stopping inappropriate debt collection practices and taking steps to resolve the debt.

Keywords: bankruptcy, debt, collection

Case Results

Result: We proved to the U.S. Trustee that this family passed the 2nd half of the two-part Means Test and were eligible to file a Chapter 7. In short, they saved tens of thousands of dollars by choosing our trial lawyers to represent them.

This family of three had $60,000 in unsecured debt and needed to get out from under it quickly so they could start saving for retirement and their child's college education. They met with several other bankruptcy attorneys before meeting with us. Every other firm told them that they made too much money to file Chapter 7. Thus, the other firms' attorney fees for a Chapter 13 would be at least triple what it would be for a Chapter 7. We charged them less and got them a discharge in Chapter 7. - R.G. & S.G.

Result: Close to 40 State and FBI investigations for Mortgage Fraud (each carrying 99 year prison sentences). EACH AND EVERY ONE OF THE CHARGES DISMISSED!

Aggressive State and FBI investigations were conducted for several years on our client for a multi-million dollar fraud conspiracy. Convinced that she was going to spend the rest of her life in federal prison or the state Pen, she turned to us for help. And help we did. Not only did she not spend one second in prison, all the federal charges and state charges against her were completely dismissed. Despite being caught red-handed, and despite confessing to the authorities, her criminal record is clean as a whistle today thanks to Mr. Pelley. - K.D.T.

Result: The Barbie and Ken Divorce. We got "Ken's" assault-family violence charges dismissed and prevented "Barbie" from stealing his kids in the divorce.

This affluent and very attractive couple had a toxic relationship. On more than one night, "Barbie" called the police and said that he assaulted her. "Ken" hired another attorney who represented him for months throughout the pendency of their divorce. That attorney advised "Ken" to plead the case out and go on probation. Had Ken taken that horrible advice, his "family violence" admission would have deprived him full access to his children and subjected him to substantial alimony obligations. Ken fired that law firm, hired us, and in one single appearance in Court Mr. Pelley convinced the State to dismiss the case and he got his kids back. - B.P.

Result: Thanks to our knowledge of an obscure exception to the Means Test, these clients were able to discharge all of their unsecured debts in a quick and easy Chapter 7 case.

These clients had a tremendous amount of credit card debt. However, because of their income they failed the first half of the two-part Means Test. Nevertheless, we proved that they qualified for an exception to the B22 income requirement as disabled veterans. We showed the U.S. attorney this couple met all three of the prongs for this exception. - A.J. & J.J.

Result: Felony Assault by Choking/Impeding Breath case "No-Billed" by the Grand Jury and the charge was dropped.

Police arrived at the scene after neighbors called the Frisco police complaining that there was a domestic disturbance next door. They found broken china and dishes all over the floor downstairs. The fiancé was screaming and crying hysterically with red marks all over her neck and chest. Our client had locked himself in the upstairs bathroom where the police located him. With guns drawn, the police arrested our client who posted bond and made a beeline for our office. We submitted a packet to the D.A. and within about a month, the charges were dismissed and he avoided not only 10 years in prison but also a lifetime of regret and misery. - A.B.

From a Mother & Father – Thank you for taking care of our son in court. He was visibly shaking when the other side showed up today. Until that point he was doing just fine. You took him under your wing and protected him and his son. There are no words to express our gratitude. - C.K. & S. K.

Result: We filed Chapter 7 for them both personally and for their business. They discharged nearly three million dollars in business and personal debt and got a fresh financial start.

This family owned a company that supplied medical equipment. Much of their business involved clients on Medicaid. When Medicaid put a moratorium on payments to providers in the area, their well-established business quickly fell apart. - W.L. & P.L.

Result: Habitual felony offender who was not eligible for probation faced a minimum of 25 years in prison and up to 99 years for assaulting 4 police officers if he was indicted. All cases were dismissed.

This client was up a creek and our defense team was the only paddle that saved him. He had two prior violent felony convictions and was arrested after 2 a.m. outside of a shady lake bar drunk and was accused of beating up 4 cops. Given the fact that he was 6'2" and 240 without an ounce of fat and had a violent criminal history, his outlook seemed futile to him and his family. Nevertheless, they hired Mr. Pelley and within 2 months all charges were dismissed. - C.S.

Result: Habitual felony offender who was not eligible for probation faced a minimum of 25 years in prison and up to 99 years for assaulting 4 police officers if he was indicted. All cases were dismissed.

This client was up a creek and our defense team was the only paddle that saved him. He had two prior violent felony convictions and was arrested after 2 a.m. outside of a shady lake bar drunk and was accused of beating up 4 cops. Given the fact that he was 6'2" and 240 without an ounce of fat and had a violent criminal history, his outlook seemed futile to him and his family. Nevertheless, they hired Mr. Pelley and within 2 months all charges were dismissed. - C.S.

A former spouse tried to have our client arrested by falsely claiming he molested their daughter during the marriage in order to gain full custody of their child and to prevent him from having access to the child. We not only avoided the criminal prosecution, but also gained the father possession and access to his minor daughter through the family law court. - A.V.

Result: This family was thrilled with our firm for not only getting rid of $160,000 of unsecured debt, but also paying less than half of what they owed on their car to own it outright.

This family owed $160,000 in unsecured debt and $16,000 on their car at around 20% interest. They made almost $100,000 a year. That is over $30,000 more than what the Code allows for you to pass the first half of the Means Test for a Chapter 7. Mrs. C. lost her job shortly before filing, so their 6-month average "current monthly income" did not properly reflect their realistic income moving forward. After filing an affidavit of unemployment, we convinced the U.S. Trustee that this family was eligible for a Chapter 7 and we discharged all of their burdensome pre-existing unsecured debts. However, the beauty didn't stop there: The car that they owed $16,000 on was only worth $8,000 and they were getting killed on the interest rates due to bad credit. We filed a Motion to Redeem and they paid only $8,000 for their car, which saved them over $10,000 over the life of the loan. - J.J. & J.C.

Result: Two Delivery of a Controlled Substance in a School Zone cases dismissed after our Motions to Suppress were Granted.

Client had an extensive criminal history. He had everything riding on our Motions to Suppress and Brief in Support. He was looking at 40 years confinement unless Mr. Pelley won the Motion. He did. The court granted our Motion and he walked away a free man. - K.L.

Our client ceased payments of agreed spousal support upon remarriage of his ex-spouse. Following another argument, the ex-spouse filed a Motion for Enforcement. At trial, the Court requested briefs that both parties provided to the Court. The Court ruled that the spousal support was unenforceable. The ex-spouse appealed, and that Court requested additional briefs. The appeals court ruled in favor of our client and ordered the ex-wife to reimburse our client for costs and expenses. - R.P.

Result: A.N. got her car back and discharged her credit card debt while lowering the monthly payments on the vehicle.

Her vehicle was repossessed. A.N. filed an emergency Chapter 13 bankruptcy case on 3 days later and we were able to recover the vehicle for her. A.N. paid the vehicle note through her Chapter 13 Bankruptcy Plan at a much lower interest rate and a much lower monthly payment. - A.N.

Result: The State of Missouri prosecuted this person for felony theft. She originally hired an attorney in Missouri who charged her over $20,000 in attorney fees, drug out her case for over a year, and recommended that she accept the D.A.'s offer of 6 years in prison. She fired him. She hired us. Mr. Pelley got her case dismissed in one single appearance in Court.

She was actually a Texas resident. She hired us and we got permission from the court to practice pro hac vice in Missouri for her case. Mr. Pelley made one (1) appearance in court just outside of St. Louis and within 2 weeks the felony charges were dismissed rather than her spending 6 years in prison. - W.M.

Result: Note from a Divorce Client

"Again, I want to thank you so much for your time and work you've put into my case. I have full confidence in Mr. Pelley and want you to know how thankful I am to have put my trust in you." - R.S.

Our client owed in excess of $80K in back child support and a lot of credit card debt. We filed a Chapter 7 bankruptcy for him and the Attorney General's Office failed to file a proof of claim for the child support listed in the bankruptcy. The bankruptcy was completed and the child support claim was discharged. The Attorney General’s office filed multiple motions with the Federal Bankruptcy Court to allow them to proceed with collection efforts against our client. We contested their motions and the Federal Court denied all of their motions. The Attorney General then demanded a trial in State Court. We proceeded to trial in State Court and the Court confirmed that the child support was discharged and our client walked away free and clear of any child support. - D.W.

Result: hired a translator for this deaf couple who also went with us to meet with the 341 Trustee Meeting and they received a quick and painless discharge of all of their unsecured debts.

This couple had an enormous amount of unsecured debt. After visiting with several bankruptcy law firms, they were exasperated by the inability to communicate their financial questions and concerns. Then they reached out to us. The first lengthy meeting was conducted by passing notes back and forth. Then, we hired an ASL translator to accommodate these good people and make them feel as calm as possible - J.A. & M.A.

Result: We hired a translator for this deaf couple who also went with us to meet with the 341 Trustee Meeting and they received a quick and painless discharge of all of their unsecured debts.

This couple had an enormous amount of unsecured debt. After visiting with several bankruptcy law firms, they were exasperated by the inability to communicate their financial questions and concerns. Then they reached out to us. The first lengthy meeting was conducted by passing notes back and forth. Then, we hired an ASL translator to accommodate these good people and make them feel as calm as possible - J.A. & M.A.

Result: 1st Degree Felony Motion to Adjudicate for Delivery of a Controlled Substance >200 Grams. Case Dismissed.

This client violated his probation on multiple occasions. He was facing 99 years confinement as a result of those violations. He had a warrant out for his arrest when he came in to hire us. The very first time that we appeared in Court on that active warrant we convinced the Judge to withdraw the warrant. That same morning, the Motion to Adjudicate was withdrawn, and our client's probation was continued. No prison time. Not even any jail time. - S.M.

We saved this client a bunch of money and property after he failed to timely act after finding out his wife filed for divorce. Prior to hiring us, our client failed to file an answer after being served with a Petition for Divorce. The Court entered a default judgment awarding his ex-wife large portions of his share of the community property and 50% of our client’s separate property. Additionally, the Court ordered exorbitant amounts for child support and spousal support. Our Motion for New Trial was granted and the Court vacated all prior orders. - B.M.

Result: The H's beat cancer, discharged the ridiculous medical bills that were not covered by the insurance company they had paid religiously for years, and got rid of their rental house nightmare.

Mrs. H. went through several courageous bouts with cancer and fought through many rounds of chemotherapy. This resilient couple had $160,000 in medical debt and a rental house they could neither sell nor afford to maintain. Right before we were going to file, Mrs. H's cancer came back. She did not quit fighting. So, we postponed filing until she beat it again and included the newly generated medical debt in her Chapter 7 filing. - J.H. & M.H.

Result: Federal Investigation of Money Laundering by the F.B.I. - Closed without Indictment.

Mr. Pelley convinced the federal government that this client was the victim of a conspiracy to commit wire fraud for millions of dollars rather than the rest of the gang who had actual criminal culpability. Otherwise, she was looking down the wrong end of a 20-year barrel in a federal prison. She got her life back after our team put an end to the FBI investigation. - F.W.

This was an incredible case where we won custody for a minor child for a brother over his biological father. The mother of this minor female child died leaving the father as the only living conservator. The child wanted to live with his older brother rather than the father. We intervened and requested the Court for primary custody of the child. The father contested and the case was set for trial. Our client (the brother) was appointed sole managing conservator of the child with father’s rights and privileges subject to approval of brother and the child. - R.W.

Results: J.W. got rid of the garnishment from her judgment and was able to reduce her monthly budget and discharge all of her unsecured debts.

Client had a garnishment action against her from a Judgment and a high interest vehicle note. Client filed a Chapter 13 bankruptcy to stop the garnishment and repay the vehicle note through a Chapter 13 bankruptcy at a lower interest rate and lower the monthly payments on her car. - J.W.

Results: First Degree Felony Assault by a Habitual Offender Facing 99 Years in the Pen! Dismissed.

This client would not have been eligible for probation if he convicted at trial. He would have to serve a minimum of 25 years in prison without parole. He hired us. We pressed the State for a dismissal and that is exactly what we got. - J.E.

We got our client (the father) awarded possession of two minor females. He came to us seeking primary custody of his two minor female children. The mother filed unfounded criminal charges against the father, reported abuse to CPS, claimed that he threatened physical harm to the kids and also that he threatened to kill her. She actually filed felony aggravated assault charges against him. After hiring us, the false criminal charges were dropped, he prevailed with sole custody and the Court granted his every request about property. - S.P.

Results: We convinced the U.S. Trustee that this couple belonged in a Chapter 7 case despite making nearly double what the IRS's guidelines says is typical for a family of two.

This elderly married couple had over $270,000 of debt from an extended illness. However, they made almost $100,000 as a family of two. The applicable family income to file a Chapter 7 is $57,000, so they clearly failed the first half of the Means Test. We worked with them to maximize their qualified expenses. - W.M. & R.M.

Results: Aggravated Sexual Assault of a Child charge-Dismissed.

This poor man was charged with this false allegation, jailed, and bond was set at $200,000. The family could not afford to make bond. So, they hired us to file a Writ of Habeas Corpus. At the hearing, Mr. Pelley got the bond reduced down an astonishing amount to $500 and within two weeks, he got the case dismissed. - - D.J.K.

In this Attorney General Child Support Case, our client (the father) owed a ton of back child support payments as well as penalties and interest. At the hearing, Mr. Pelley got the delinquent support reduced by more than 50% and all penalties and interest were vacated. Our client was placed on a reasonable payment plan to get caught up. - A.N.

Result: M.J. discharged all of her credit card debt and the IRS back taxes through the Chapter 7 and adversarial proceeding.

M.J. had over $85,000 in unsecured debt from caring for a sick family member as well as over $10,000 in back taxes. The IRS argued that the tax return was not timely filed, but we proved to the court that it was. - M.J.

Result: Aggravated Sexual Assault of a Child case dismissed after rejecting the D.A.'s final offer of 40-Years in prison.

Our client was accused of repeatedly raping his pre-teen daughter and was facing life in prison if he was convicted. Prior to hiring us, his bond was revoked for going near a school zone and the State of Texas indicated they never wanted him to see the light of day again. His family came to us for help. After several aggressive moves, we got all of the charges dismissed. - T.A.H.

Our client came to us after a Sexual Assault of a Child allegation came out from his wife in the middle of a child custody fight. We not only got those false charges dismissed without an indictment, we got his minor son back that his ex-wife had kidnapped after the false allegations were dropped during the divorce. - B.D.R.