I AM A COLLECTION AGENCY, WHY DOES MY CLIENT NEED A LAWYER TO HELP THEM COLLECT THEIR DEBTS?
Texas prohibits any individual or company, either in Texas or out of state, from taking any action or giving any advice that constitutes the practice of law. Only lawyers licensed by the State Bar of Texas can take such actions. This can even result in enforcement action by the Supreme Court of Texas. The Supreme Court of Texas has a committee called “The Unauthorized Practice of Law Committee”.
This Committee has filed suit in Texas State Courts to stop collection agencies from giving any such advice or preparing or filing any document that would need to be prepared by a licensed Texas attorney. For example, the Committee filed a lawsuit against Ray Crain and CMCC [Court of Appeals of Texas, Houston (1st Dist.). Ray CRAIN and Credit Management Consulting Company, Appellants, v. THE UNAUTHORIZED PRACTICE OF LAW COMMITTEE OF THE SUPREME COURT OF TEXAS and Jeff Lehmann, Appellees; No. 01-98-01010-CV.] for alleged violations of these rules and concluded that neither he nor his companies could prepare or file any documents that related to Mechanic’s Liens involving construction projects.
The appellate court affirmed in full the trial court’s injunction (which means forcing them to stop undertaking) for all of the following:
The district court granted summary judgment in favor of the UPLC permanently enjoining Crain and CMCC from: (1) engaging in any practice constituting the practice of law; (2) preparing, charging, or receiving any compensation for the preparation of legal instruments affecting real property, including a mechanic’s lien, materialman’s lien, release of lien, or lien affidavit and claim; (3) the continuation of any ongoing or new lien notices, release of lien preparation, lien affidavit and claim preparation or filing, and negotiations with home owners, lienees, potential lienees, and insurance companies; (4) advertising they possess the ability to collect money for claimants by the use of notices of intention to file liens or lien affidavits, or to charge or receive compensation for the preparation of any legal instrument affecting title to real property; (5) filing or preparing any instrument which affects title to real property for any person other than themselves; (6) supplying legal forms to third parties, including forms for the preparation of a mechanic’s lien, materialman’s lien, release of lien, or lien affidavits, and/or providing advice to third parties regarding completion or filing of such forms or documents; and (7) accepting money or consideration for performing any of the services or acts that Crain or CMCC was enjoined from doing.
An attorney can of course do all things and more on behalf of their clients. Call us today to see what we can do for you.