Debt Collection
If you are a business and are owed money, we can help you collect. If you are holding delinquent credit card accounts, hospital bills, uninsured motorist claims, or defaulted loans, we can help collect. We handle debts in amounts of $3,000 and higher.
Typically, the process involves writing the debtor a letter requesting payment of the debt. Section 38.001 of the Texas Civil Practices and Remedies Code requires a demand for payment to be sent to the debtor at least thirty days before action is taken on a breach of contract as a precursor to recovery of attorney’s fees.
If the debt is a consumer debt, the federal
Fair Debt Collection Practices Act also requires giving the debtor the opportunity to challenge the debt or to request documents verifying the debt. Upon expiration of thirty days, a suit on sworn account is typically filed. If the debtor is successfully served with citation, he or she has to file an answer either by Monday next after expiration of 20 days (if suit is filed in County or District Court) or Monday next after expiration of 10 days (if suit is filed in Justice Court or Small Claims Court). The same judge presides over both the justice court and small claims court
- a Justice of the Peace. But the two courts differ in the following respect: Texas Rules of Evidence apply in justice court cases, but not in small claims court cases. Also, a corporation cannot represent itself in justice court cases, but it can in small claims court cases.
The proceedings are more informal in small claims cases versus justice court cases. If the debtor files an answer and disputes the debt, the lawsuit proceeds as any other case. Discovery is typically conducted and a trial is held.
If the debtor fails to answer and defaults, the creditor then moves for the entry of a default judgment. Because a suit on sworn account is supported by affidavit, the debtor must file a sworn denial. Many times the debtor
- especially if the debtor is representing himself or herself - does not file a sworn denial, which is a procedural defect. If not corrected, the failure to file a sworn denial could lead to the entry of a judgment against the debtor. Most collection matters settle. But if the case goes to trial, the creditor has the burden of proving the amount of the debt owed and the attorney’s fees incurred in collecting the debt. Once a judgment is obtained, it becomes final if it is not appealed within 30 days (if suit is in County or District Courts) or 10 days (if suit is in Justice or Small Claims Court). Once the judgment becomes final, the credit has several options to try and collect. We invite you to review the Judgment Collection section for additional information on collecting a judgment in Texas.
