Texas Lawmakers to Look at Criminal Prosecution of People in Debt to Rent to Own Companies

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Usually, when an individual has a payment dispute with a business, the matter is ultimately settled in a civil court.

However, because of an obscure law passed decades ago, rent-to-own companies in Texas are allowed to pursue felony theft charges against those who default on payments. In practice, that means that one can be sent to prison if one acquires a piece of furniture from one of these businesses and falls behind on payments, according to the Texas Tribune.

The matter has come to the attention
of modern Texas lawmakers who are anxious to pass criminal justice reform. The spectacle of a specific industry being able to have their customers thrown in jail when they fall behind on payments has caused members of the Legislature on both sides of the aisle to contemplate reforms to stop the practice ahead of the next special session.

Attorney Jake Posey explains that one problem with this law is that it allows rent-to-own companies to use the criminal justice system and Texas law enforcement as their debt collectors at the cost of time and recourses for state and local governments. Putting a person in jail costs a lot of money, and the feeling among some lawmakers is that it should not be done for something as frivolous as a payment dispute.

The other problem is that the practice of jailing people who have defaulted on payments to rent-to-own companies constitutes the establishment of a debtor’s prison, which is contrary to the Texas Constitution.

Lawmakers are contemplating measures that include repealing the old law entirely, to amending it to require rent-to-own companies to inform customers that they could be prosecuted and jailed if they fall behind in their payments.

The Posey Law Firm PC, led by Jake Posey, is a sharply focused government relations and business law firm based in Austin, Texas. The firm’s government relations practice advises clients and advocates for the successful development of public policy in the legislative, judicial, and executive branches of Texas government.

Representing Fortune 500 companies, respected market leaders, and some of Texas’ leading state associations, Mr. Posey’s mission is to diligently deliver strategic business, political and legal solutions for his clients.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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