The laws which protect consumers from abusive debt collection practices have been on the books for several years now.  Even though these rules have been publicly enforced, many debt collectors continue to use abusive tactics.  Since the onset of the recession, the FTC has requested additional reform measures because the number of complaints regarding abusive practices have increased.  Considering the ongoing debate over health care and stimulus spending, it is unlikely that reform will come anytime soon.

In the interim, the best way to deal with a debt collector is to arm yourself with information about consumer laws.  Probably one of the most important definitions within the Texas act is the definition of “consumer debt.”  It officially means “an obligation, or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction or alleged transaction.”  You’re probably wondering why the focus on this definition?  Because the classification of your debt determines whether or not you are entitled to protection under either the federal or Texas consumer laws.  Consumer debts get protection.  Non-consumer ones do not.

For example, in an opinion published by the FTC, they determined that community association assessments are “consumer debts” because they arose out of a transaction for a household purpose, which was a covenant associated with the purchase of your home.  Consequently, you can seek protection under collection laws when your home owner’s association forwards an allegedly delinquent account to a collection agency.

On the reverse side, a credit card which you use for your small business is not considered a consumer debt.  Consequently, a debt collector can call and harass you about payment of that account.  In the same respect, more and more government agencies are utilizing collection agencies to collect their fees and assessments.  Depending on the origin of those fees, they too may be excluded from the definition of “consumer debts.”  In another FTC opinion, they determined that court costs due as part of a child enforcement action were not consumer debts.

Dealing with a debt collector is stressful and often confusing because of the tricks used by debts collectors and loopholes within the law.  If a debt collector is harassing you, another option is bankruptcy.  Even though some types of debt obligations are treated differently during bankruptcy, you can still get protection from harassing debt collectors for all categories of your debt.    Once you file for bankruptcy protection, your attorney becomes your advocate.  The collector is then required to communicate through your counsel.  This helps take an immense amount of pressure off of you and your family.  You can then focus on resolving your debt obligations and rebuilding your financial health.