Top Ten Consumer Myths

According to Texas law . . .

Myth 1 – A contract may be cancelled within 3 days.

Contracts are final when made. The only exception to the general rule is when a salesman comes to your home and sells you something, such as aluminum siding or a vacuum. In those cases, where the contract is made in your home, or in a location other than the business location, the law allows you ten days to cancel a contract. There is no such rule in other contracts.

Myth 2 – You can be arrested for failure to pay a debt.

No, not in the United States of America. There are no debtor’s prisons here. Failure to pay a debt is a CIVIL matter, not criminal.

Myth 3 – A financing company or bank must give advance notice of intent to repossess.

No, no requirement of advance notice.

Myth 4 – When your car is repossessed, whether voluntarily or involuntarily, you have no further obligation of payment.

In most circumstances, not true  You are responsible for the full amount of the amount financed. When the car is repossessed, the creditor must sell it and apply the proceeds to your account. If there is a deficiency, you are liable for the balance.

Myth 5 – A divorce decree can remove a spouse’s liability from joint liability such as a mortgage, car payment or credit card account.

Not true  Not unless the credit card company, auto finance company or mortgage company was a party to your divorce lawsuit. Otherwise, the terms of the contract between you and the credit card company or financing company control; not your divorce decree. If an agreement was made about payments to be made by your ex-spouse which are not kept, you have a claim against your ex-spouse, but not against the credit card company or financing company.

Myth 6 – If my car stops working, I may stop making payments.

Failure to make payment is a default under most financing contracts. Most financing contracts (and Texas law) allows for a creditor to repossess a vehicle if the contract is in default. As long as the repossession is conducted without force, does not involve entry into a building and does not breach the peace, a creditor may repossess a vehicle.

Myth 7 – If I fail to pay a debt, my wages may be garnished.

Not in Texas. The Texas Constitution prohibits creditors from garnishing wages to collect a debt. The only exceptions are for child support, the IRS and federally guaranteed student loans. Your homestead is also protected from creditors.

Myth 8 – A Notice to Vacate must be delivered by a Constable.

The property code provides that the landlord must serve the notice to vacate by mail, hand delivery or posting on  inside of door.

Myth 9 – If my landlord serves me with a Notice to Vacate, I must move out.

If you move out following receipt of a Notice to Vacate, you will be breaking your lease. In order to evict you, the landlord is required to serve you a Notice to Vacate, then file the eviction lawsuit and prove his case in Court. You are not evicted until a Justice of the Peace says you are evicted. Even then, you have five days to move out or you may file and appeal to the County Court.

Myth 10 – If I buy a used car from a car dealer, which breaks down, I may sue under the lemon law.

The lemon law applies to new cars only. As a general rule, buying a used car with no warranty makes you responsible for repairs which need to be made after the purchase of the vehicle. There may be other remedies if the dealer misrepresents certain facts or violates other laws, but just because a used car breaks down does not mean you have a cause of action against the car dealer.