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There is no debtor’s prison in Texas

Richard M.  Alderman Interim Dean of the Law Center

Richard M. Alderman
Interim Dean of the Law Center

Q. Can I be arrested for not paying my credit card bill? A debt collector is telling me he is going to report me to the police.
A. You cannot be arrested for not paying your bills. There is no debtor’s prison in Texas.
If you don’t pay the money you owe you may be sued, but you cannot be put in jail. In fact, the threat to throw you in jail for not paying your bills violates both federal and state debt collection laws. For more information about what may happen if you don’t pay your bills, visit the debt collection section on my website, www.peopleslawyer.net.
Q. I signed a lease with an apartment that requires a 60-day non-renewal notification. The lease states I am allowed a three-day grace period and I submitted my non-renewal two days after that three-day grace period. Now they insist that I pay for another month at a much higher rate. Do I have a means to contest?
A. As far as terminating the lease, I don’t see a basis to contest their requirement you give the proper notice. You agreed to the lease and it controls the terms of your agreement. Even though you were only two days late, you still did not comply with the terms you agreed to.
As far as the landlord charging much higher rent, I don’t see any basis for him doing that unless he had previously given you notice of a possible rent increase, or it is in your lease. Just as you have to comply with the terms of the lease, so must your landlord. Read your lese and see what it says about rent when you “hold-over” the lease term.
Q. I had a small “fender-bender” with another motorist. Neither of us wanted to report the accident to our insurance company, so he just agreed to pay my repair bill, which was about $400. Now he won’t pay. What can I do?
A. First, in my opinion, even if you believe you are going to settle a matter without involving the insurance companies, you should exchange insurance information. Texas law requires automobile insurance and you should make sure the other driver has it.
Assuming you don’t want to get your insurance company involved, however, this may be a good case for Justice Court. I suggest you send him a certified letter asking that he pay, as he promised. Let him know that if you cannot settle the matter, you will consider a claim in Justice Court. If you do not resolve the dispute, file a petition with the appropriate Justice of the Peace. Remember, you may sue in Justice Court for as much as $10,000.
Q. If I file bankruptcy, will I lose my house?
A. You probably will not lose your house if you file bankruptcy. When you file bankruptcy, you get to keep your “exempt” property. Exempt property is property that your creditors may not take, even if they sue you and win. In Texas, your homestead is exempt property. This means that you do not automatically lose it in a bankruptcy.
The only parties who may take your house are creditors that are not subject to this “homestead exemption.” For example, a lender that loaned you the money to buy the house, a bank that made a home equity loan against the house, or a contractor who improved the house. Each of these creditors has the right to enforce their lien, even if it is against your homestead.
But even if there is a lien on your home, you should still be able to keep it as long as you are willing to reaffirm the debt and continue making payments. If you are thinking about filing bankruptcy, speak with an attorney who is board certified in consumer bankruptcy.

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