Here’s a breakdown of Texas Finance Code Section 392.001, formatted in HTML:
Texas Finance Code Section 392.001 defines key terms related to debt collection practices. This is crucial because Chapter 392 regulates the activities of debt collectors within the state, aiming to protect consumers from abusive or unfair practices. Understanding these definitions is paramount for both debt collectors and debtors.
The section begins by defining a “Consumer.” This is broadly defined as an individual who owes or allegedly owes a debt. It’s important to note that the definition doesn’t specify the type of debt, encompassing a wide range of financial obligations, from credit card debt to medical bills. This broad definition ensures that a large segment of the population is protected under the chapter.
Next, the code defines “Debt.” This is described as any obligation or alleged obligation arising out of a transaction, whether actual or perceived. The debt must primarily be for personal, family, or household purposes. This excludes debts related to business ventures. This focus on personal debt is a key aspect of the law, targeting collections activities that directly affect individuals and families rather than commercial entities.
Perhaps the most pivotal definition is that of a “Debt Collector.” This is defined as a person engaging directly or indirectly in debt collection. This definition is quite broad, encompassing various entities involved in the process. Specifically, it includes a person who solicits debts for collection by another person, or any person who owns or operates a business whose principal purpose is the collection of debts. Critically, it *also* includes a person who regularly collects his own debts using a name other than his own which would indicate that a third person is collecting or attempting to collect such debts.
The definition of “Debt Collector” explicitly *excludes* certain individuals and entities. For instance, it doesn’t include attorneys collecting debts as attorneys at law, unless they regularly collect debts. Similarly, it excludes licensed financial institutions and certain lenders. These exclusions are often hotly debated in legal cases, as the line between legitimate collection activity and violations of Chapter 392 can be blurry.
The code also touches on “Creditor,” which is the person or entity to whom a debt is owed. Understanding who qualifies as a creditor is important for determining who might be liable for violations of Chapter 392 if they are using a debt collector to collect a debt on their behalf.
Finally, Section 392.001 includes a catch-all provision, defining “Person” as an individual, corporation, partnership, association, or any other legal entity. This ensures that the law applies to a wide range of actors involved in debt collection.
In conclusion, Texas Finance Code Section 392.001 provides the foundational definitions for understanding the scope and application of debt collection regulations in Texas. The definitions are broad and carefully crafted to protect consumers from unfair or abusive practices while acknowledging the legitimate needs of creditors to recover debts. Any party involved in debt collection activities in Texas should be intimately familiar with these definitions to ensure compliance with the law.
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