Payment of debts, including medical bills, in Texas is regulated by multiple agencies and laws. The Texas Office of the Consumer Credit Commissioner and the attorney general are responsible for regulating the state’s debt collection laws. The Texas General Assembly enacted the Texas Credit Laws to supplement the federal Fair Debt Collections Act to protect consumers against unfair harassment and deceptive collection practices. And the Texas Homestead Law outlines what debtors can be forced to sell to meet a judgment.
The Texas Finance Code and the federal Fair Debt Collection Practices Act cover personal and household debts, including those for medical care, automobile purchases and credit card purchases. Although the federal Fair Debt Collection Practices Act only applies to third-party credit agencies and not to individual debt collectors collecting their own debts, the Texas law applies to both.
Prohibited Collection Practices
Debt collectors cannot use threats of violence or imprisonment. Although they can contact residents by phone, mail or fax, they may only contact them between 8 a.m. and 9 p.m., unless given permission from consumers to contact them outside of these hours. Furthermore, debt collectors cannot call consumers at work if they have been asked not to or if they know that employers disapprove of phone calls during work.
Under the federal and state laws, consumers have a right to demand debt collectors cease contact with them by sending them written requests. Debt collectors must send each consumer a written disclosure letter notifying him of the amount due, the name of the credit agency or medical office that rendered services and how to dispute the debt. Debt collectors must send this written notification within five days of first contact.
Rate Limits and Penalties
The Texas Office of the Consumer Credit Commissioner sets interest limit rates pursuant to the Texas Finance Code, and publishes weekly rate limits in the “Texas Credit Letter.” Under the code, all debt collectors, including medical bill collectors, face usury charges if they charge more than the allowable weekly interest rate limits or judgment interest penalties.
Medical Bill Judgment Collections
The Texas Homestead Law outlines what kinds of property debtors can be forced to sell to satisfy their debts. Debt collectors attempting to collect medical bills are subject to the Texas homestead protection regulations, and in most cases, their debts can never be collected, according to the Travis County, Texas, website. This is because most debtors don't have property that is non-exempt. The Texas homestead protection exemptions apply to personal and real property, and medical bill collectors cannot collect the first $30,000 of personal property, homes and up to 200 acres of land. Moreover, the state’s homestead laws protect specific personal assets, including vehicles, pets, family heirlooms, furniture, jewelry, equipment, food and recreational supplies. Also protected are insurance policies, children’s books and toys and firearms.
Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.
- Texas Comptroller of Public Accounts: Lending
- Texas Finance Code: Chapter 342 – Consumer Loans
- Travis County, Texas: Collecting Your Judgment
- Federal Trade Commission. "Debt Collection," Accessed Dec. 3, 2019.
- Consumer Financial Protection Bureau. "What Is a Debt Collector and Why Are They Contacting Me?" Accessed Dec. 3, 2019.
- Partners Financial Services, Inc. "Your Debt Collection Agency And The Benefits Of Third-Party Debt Collectors," Accessed Dec. 3, 2019.
- Experian. "Collections on Your Credit Report," Accessed Dec. 3, 2019.
- Consumer Financial Protection Bureau. "Can Debt Collectors Call Me Anytime They Want, Day or Night?" Accessed Dec. 3, 2019.
- Consumer Financial Protection Bureau. "What Is an "Unfair" Practice by a Debt Collector?" Accessed Dec. 3, 2019.
- Consumer Financial Protection Bureau. "Are There Laws That Limit What Debt Collectors Can Say or Do?" Accessed Dec. 3, 2019.
- Consumer Financial Protection Bureau. "Can Debt Collectors Tell Other People, Like Family, Friends, or My Employer, About My Debt?" Accessed Dec. 3, 2019.
Jill Stimson has worked in various property management positions in Maryland and Delaware. Stimson worked for the top three property management companies in the commercial industry and focuses her career on property building logistics and tenant relationships. She holds a Juris Doctor and a Bachelor of Science in psychology.