Texas Debt Consolidation

Debt Relief in Texas

Getting help with your debt problem starts with knowing what resources are available to you. The state of Texas has some programs to help its residents deal with and manage their debt.

Texas Credit Counseling and Debt Consolidation

The Texas Attorney General recommends that consumers who are in over their heads in debt visit a consumer credit counselor to help them learn to manage their money and their debts. Often these companies provide education and budgeting help, even workshops on money management. If you feel that you need some measure of accountability to help you get back to your conformable financial state, consider taking this step.

If you choose to get credit counseling, choose your counselor carefully. Some companies operated under the title of “Texas credit counselors” when they actually charge far more than they should for little to no service. The companies approved to work with federal bankruptcy cases in Texas are a good bet as a place to start when you are looking for debt education and accountability. Find this list at http://www.justice.gov.

You may also want to consider a debt consolidation plan. Debt consolidation takes all of your existing debts and lumps them into one loan. If the loan has a lower interest rate than what you are currently paying, this can save you some money and help you pay down the debt faster. Keep in mind that you need to stop adding to your debt to make consolidation work.

Texas Debt Relief Programs

Sometimes your credit counselor will refer you to a Texas debt relief program. These programs or companies will negotiate with your creditors on your behalf for debt settlements or better rates. While this service can be valuable, it also comes with a price. Make sure you are working with a legal company before you proceed. All debt management firms must register with the state under the Texas Finance Code. Make sure that you know what the cost for these services is upfront. You should also know that you have the right to do these negotiations for yourself, rather than asking a third party to come in and do them for you.

Texas Debt Collection Laws

If you fail to repay what you owe, you will eventually be contacted by a debt collection agency. Understanding your rights will help protect you from potentially predatory practices these agencies sometimes employ. The Texas Debt Collection Act regulates the way debt collectors can behave.

This law prohibits harassment and fraud. This is typically defined as:

• Threatening violence or a criminal act
• Using profanity or obscenities
• Making false accusations against the debtor
• Threatening to arrest the debtor or seize property without the authority to do so
• Harassing over the phone by calling repeatedly, continuously, or anonymously
• Making collect calls without disclosing the nature of the call beforehand
• Falsely identifying the creditor
• Using a false name or identification
• Misrepresenting specifics about the debt
• Misrepresenting the services the debt collector renders
• Sending documents that appear to be from an official or government agency.

You also have the right to dispute the debt if you feel it is not yours. If you give the debt collector written notice of your dispute, then it is the agency or collector’s job to determine whether or not the debt or disputed item is correct. If it is incorrect, it must be corrected before any collections efforts may proceed.

These state laws apply to anyone collecting a debt, whether a debt collector or your original creditor. The state also follows the federal Fair Debt Collection Practices Act, which applies only to debt collectors or collection agencies. Under the FDCPA, debt collectors may not:

• Call at work if your employer does not permit it
• Call before 8:00 a.m. or after 9:00 p.m., with a few exceptions.

You have the right to stop these collection actions, but doing so does not remove your debt responsibility. If you wish to stop the collection agency’s practices, send them a written letter claiming your rights under the federal Fair Debt Collection Practices Act.

If your creditors choose to sue you, they must do so within the statue of limitations time frame. In Texas, the statute of limitations for all debts is four years. Texas offers a 100 percent wage protection from most debts, and limits collection agencies to charging six percent interest. For more information about debt collection in Texas, visit http://www.oag.state.tx.us.

Texas Mortgage Assistance

The Texas Department of Housing and Community Affairs offers a variety of homebuyer assistance programs to help people purchase homes within the state. The Texas First Time Homebuyer Program (http://www.tdhca.state.tx.us) offers first-time buyers interest rates below the market average.

Those who fall at or below 80 percent of the Average Median Family Income for their area of the state may qualify for the HOME Program. This program provides up to $10,000 for down payment and closing cost assistance for qualified first time buyers in the form of a 0 percent, 10-year deferred forgivable loan. The TDHCA also offers the Texas Mortgage Credit Program, which allows qualified first-time buyers to claim a portion of their mortgage interest as a tax credit against their federal income taxes.

Some of these loan programs rely on your credit rating for approval. If you find that your credit rating is too low because of your debt struggles, consider applying for the FHA loan program. This loan focuses less strongly on credit rating and more on ability to repay what is owed.

If you currently own a home, but find that you cannot keep up with the mortgage payments, consider contacting the Texas Foreclosure Prevention Task Force. The tax force offers help with communication between the lender and the borrower and the creation of a budget that might save the home from foreclosure. To get help, call 1-888-995-HOPE. The number is available 24 hours a day, 7 days a week.

Texas Debt Assistance Programs

As the Texas Attorney General’s website points out, getting out of debt takes time and diligence. There is no magic road to getting out of debt, and the state offers no other programs to help its debtors. Take advantage of what is available, and slowly work your way out from under the shackles created by overwhelming debt.