LegalFix
Select your state

Creditor and Debtor

Creditor and debtor law includes the rights and obligations of (1) creditors who extend credit and make loans to consumers and businesses and (2) consumers and businesses who seek credit and loans for their personal and business finances. Creditor/debtor law consists primarily of state and federal statutes.

In Texas, creditor and debtor law is governed by both state statutes and federal laws. Creditors are individuals or entities that lend money or extend credit, while debtors are those who owe money or have taken out loans. Texas law provides specific regulations on how creditors can collect debts, including the practices they can employ and the timelines they must adhere to. For example, the Texas Debt Collection Act outlines lawful debt collection practices and prohibits certain abusive tactics. Additionally, Texas has homestead laws that protect a debtor's primary residence from being seized by most creditors to satisfy debts. On the federal level, laws such as the Fair Debt Collection Practices Act (FDCPA) and the Truth in Lending Act (TILA) offer protections to consumers, regulating how debts can be collected and requiring clear disclosure of credit terms. These laws work in tandem to balance the rights and responsibilities of both creditors and debtors, ensuring fair transactions and protecting against exploitation.



Texas Statutes & Rules

Federal Statutes & Rules

Fair Debt Collection Practices Act (FDCPA) - 15 U.S.C. §§ 1692-1692p
The FDCPA is relevant because it establishes legal protection from abusive debt collection practices for consumers.

The Fair Debt Collection Practices Act (FDCPA) is designed to eliminate abusive practices in the collection of consumer debts, promote fair debt collection, and provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It applies to personal, family, and household debts, which includes money owed on a personal credit card account, an auto loan, a medical bill, and a mortgage. The FDCPA prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from consumers.

Truth in Lending Act (TILA) - 15 U.S.C. §§ 1601-1667f
TILA is relevant as it requires disclosures about terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed to consumers.

The Truth in Lending Act (TILA) aims to promote the informed use of consumer credit by requiring disclosures about its terms and cost. The Act standardizes the manner in which costs associated with borrowing are calculated and disclosed to the consumer, and it provides for the right of rescission on certain transactions involving the establishment of a security interest in the consumer's principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. TILA applies to most types of credit, whether it be closed-end credit (such as an auto loan or mortgage), or open-ended credit (such as a credit card).

Bankruptcy Code - 11 U.S.C. §§ 101-1532
The Bankruptcy Code is relevant as it governs the process through which consumers and businesses can eliminate or repay debt under the protection of the federal bankruptcy court.

The Bankruptcy Code provides a legal framework for the resolution of debt issues for individuals and businesses who cannot repay their debts. It allows debtors to be discharged from personal liability for certain types of debts, thereby providing a fresh start. The Code establishes various chapters under which bankruptcy proceedings may be filed, the most common being Chapter 7 (liquidation), Chapter 11 (reorganization for businesses and individuals), and Chapter 13 (debt adjustment for individuals with regular income). The Code also sets forth the rights of creditors to be notified of a bankruptcy filing and to file claims against the debtor's bankruptcy estate.

Equal Credit Opportunity Act (ECOA) - 15 U.S.C. §§ 1691-1691f
ECOA is relevant because it prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because someone receives public assistance.

The Equal Credit Opportunity Act (ECOA) prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because all or part of an applicant's income derives from any public assistance program. The Act also requires creditors to provide applicants with the reasons why credit was denied if the applicant asks. This federal law applies to any person who, in the ordinary course of business, regularly participates in the decision to extend, renew, or continue credit. This includes banks, retailers, bankcard companies, finance companies, and credit unions.

Fair Credit Reporting Act (FCRA) - 15 U.S.C. §§ 1681-1681x
FCRA is relevant as it regulates the collection, dissemination, and use of consumer information, including consumer credit information.

The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. It regulates the collection, dissemination, and use of consumer information, including consumer credit information. The Act provides guidelines for credit reporting agencies about the information that can be included in a credit report and the duration of time it can be included. It also sets out the rights of consumers to access their credit information, dispute inaccurate information, and to obtain a credit score. Additionally, the FCRA restricts access to credit reports to entities with a valid need and provides for penalties and remedies for consumers if their FCRA rights are violated.