79R8172 CLG-D

By:  Herrero                                                      H.B. No. 1853



A BILL TO BE ENTITLED

AN ACT

relating to a consumer debt owed by certain military personnel 
called to active duty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 392, Finance Code, is amended by adding 
Subchapter F to read as follows:

SUBCHAPTER F.  DEFERRED COLLECTION OF CONSUMER DEBT
	Sec. 392.501.  DEFERRED COLLECTION OF DEBT OWED BY CERTAIN 
MILITARY PERSONNEL CALLED TO ACTIVE DUTY.  (a)  An individual is 
entitled to defer collection of a consumer debt or abate a suit to 
collect a consumer debt if the individual:
		(1)  is a member of:                                                   
			(A)  the state military forces, as defined by 
Section 431.001, Government Code; or
			(B)  a reserve component of the armed forces of 
the United States;  
		(2)  is ordered to active duty for a period of 30 days 
or more;      
		(3)  incurred the obligation before the date the 
individual was ordered to active duty; and
		(4)  because of the individual's military service, is 
earning less income than on the date the debt was incurred.
	(b)  To obtain a deferral, an individual must file with the 
creditor: 
		(1)  an affidavit stating the facts required to be 
established by Subsection (a);
		(2)  a copy of a valid military identification card; 
and             
		(3)  a copy of the orders calling the individual to 
active duty.     
	(c)  After receiving the affidavit and other documents 
required for the deferral under Subsection (b), a creditor shall 
cease any collection efforts and may not resume those efforts or 
file suit to collect the consumer debt until the 181st day after the 
date the individual is no longer on active duty.
	(d)  To obtain an abatement of a pending suit to collect a 
consumer debt of an individual, an affidavit of the individual or 
any spouse, parent, sibling, or adult child of the individual 
stating the facts required to be established by Subsection (a) and 
the documents described by Subsections (b)(2) and (3) must be filed 
in the court in which the suit is pending.  If no controverting 
affidavit is filed by the creditor or if, after a hearing, the court 
finds the individual is entitled to the deferral, the court shall 
abate the suit until the 181st day after the date the individual no 
longer is on active duty.  The clerk of the court shall deliver a 
copy of the order abating the suit to the creditor.
	(e)  After the date the creditor receives the documentation 
necessary for deferral under Subsection (b) or after the date the 
court abates a suit filed under Subsection (d), as applicable, an 
individual entitled to receive a deferral under this section shall 
not:
		(1)  be considered to be in default of the obligation 
and be made subject to:
			(A)  accrual of interest on any portion of the 
obligation; or       
			(B)  a demand for payment of or acceleration of 
the remaining payments of the obligation; or
		(2)  be penalized in any other manner by the creditor 
because of the deferral.
	(f)  Notwithstanding the other provisions of this section, 
if a married individual who qualifies for a deferral or abatement of 
collection of debt as provided by this section dies, the deferral or 
abatement continues in effect until the earlier of:
		(1)  the 181st day after the date of the individual's 
death; or      
		(2)  the date the surviving spouse of the individual 
remarries.      
	Sec. 392.502.  EXERCISE OF RIGHTS UNDER SUBCHAPTER NOT TO 
AFFECT CERTAIN FUTURE TRANSACTIONS.  Receipt by an individual of a 
deferral or abatement of collection of a consumer debt as provided 
by this subchapter shall not provide the sole basis for:
		(1)  a denial or revocation of an extension of credit by 
a creditor or other person;
		(2)  a change by a creditor in the terms of an existing 
credit arrangement;
		(3)  a refusal by a creditor to extend future credit to 
the individual in substantially the amount or on substantially the 
terms requested;
		(4)  an adverse report relating to the creditworthiness 
of the individual by or to a credit bureau; or
		(5)  an annotation in the individual's file by a credit 
bureau identifying the individual as a member of the state military 
forces or a reserve component of the armed forces of the United 
States.
	Sec. 392.503.  WAIVER OF RIGHT VOID.  A provision of a 
contract or other agreement that purports to be a waiver by an 
individual of any right provided by this subchapter is contrary to 
public policy and void.
	SECTION 2.  Subchapter F, Chapter 392, Finance Code, as 
added by this Act, applies only to a member of the state military 
forces or a reserve component of the armed forces of the United 
States who is ordered to report for or is serving on active duty on 
or after the effective date of this Act.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.