As a resident of the State of Texas, your rights are protected under Texas law. The following Tip for Texans describes the amount of time a debt collector, collection attorney, or other entity has before they can no longer legally collect a debt through the civil justice system. This time frame is referred to as a “statute of limitations,” or SOL.

What does legal obligation mean?

Once a debt exceeds a certain amount of time, a debt collector is no longer able to take legal action through the civil justice system to collect a debt.

This means that you cannot be sued, your wages cannot be garnished, and your assets cannot be seized in order to make good on your debt.

What is the statute of limitations on personal debt in the State of Texas?

Texas Civil Practice and Remedies Code, Title 2, Subtitle B, Chapter 16.004 sets clear guidelines for the amount of time a debt collector has to take legal action through the Texas court system.

In order to legally challenge you in a court of law, a suit must be brought against you within four (4) years, thus, once your debt is over four years old, you are no longer legally obligated to make payment.

When does the four year State of Limitations clock begin?

Credit collection agencies may attempt to confuse the consumer, or may themselves be confused as to when the statute of limitations on outstanding debt begins.

Normally, the original creditor will wait 180 days before they “charge off” an account and transfer the account to a collection agency. Some consumers and collection companies assume that this is when the statute of limitations begin. Often times, the debt collection agency is located outside of Texas, and therefore, they are not familiar with the intricacies of our statutes.

In actuality, the statute of limitations clock begins the day the cause of action accrues. This means that the first day of non-payment of your debt is the day that the cause of action occurs.

Example: If you your credit card payment was due on March 1, 2005 and you failed to make that payment and all payments thereafter, the cause of action occurred on March 1, 2005. The credit card company would then hold the debt on their books and attempt to collect the debt through internal collection employees for 180 days, at which point that debt will be charged off and transferred to a third party debt collector. The third party debt collector would then have three and one half (3 1/2) years to take legal action against you. On March 2, 2009, you would no longer be legally obligated to pay that debt.

Can credit collectors continue to attempt collections on the debt after the four year statute of limitations expires?

Yes. A credit collection agency can continue to collect the debt forever, even after the seven (7) year consumer reporting requirements have expired.

However, you cannot be forced, legally, to pay this debt.

Can the statute of limitations be re-started somehow?

Yes. If at anytime you make a payment against the remaining balance of the debt, the statute of limitations period restarts.

If, for example, it has been five years since the debt became delinquent, and you send a payment to a collection company, the statute of limitations clock restarts from that day and you may be legally obligated to pay the remainder of the debt. This would also restart the credit bureau reporting time line, meaning the debt could appear for another seven (7) years on your credit report.

In order to prevent the statute of limitations from restarting, do not make a payment to a third party debt collector or the original creditor unless you understand the implications of making such a payment.

A law suit has been filed against me, but the statute of limitations on my debt has expired. What should I do?

Unless you are an attorney or understand the process of filing paperwork through the justice system, it is highly recommended that you contact an attorney to assist you. The debt collection agency has taken the extraordinary step of filing a legal claim through the civil justice system, and they have an attorney who will fight for them.

You should do the same, especially if the statute of limitations has expired.

Click here and we may be able to assist you in locating an affordable attorney or consumer advocate in your area.

How can Big Tex Credit Repair help me if the Statute of Limitations on a debt has expired?

Our credit repair program has been designed specifically with Texas laws in mind. There are a variety of protections under Texas law that are not available through Federal statutes.

If the statute of limitations on your debt has expired, you can, without worry of legal ramifications being taken against you, combat the credit collection company directly and have the debt corrected or removed, depending on your specific circumstances.

The do-it-yourself Big Tex Credit Repair program uses techniques so powerful that debt collectors often give up their collection efforts permanently rather than face the risk of legal action if they have made even minor mistakes with how your debt has been reported or how they have attempted to collect the debt.*

Big Tex shifts the power from their hands to yours.

[*Every individual's circumstances are different, and therefore the results for each individual are dependent on the particularities of your specific case.]

Debt collectors are in the business of making money, and if that means coming after everything you own to get what they think they deserve, they will. In some cases, debt collectors have used threats, fear and coercion in an effort to collect a debt, regardless of whether the debt being collected was legitimate. It has gotten so bad, that the US Congress had to pass the Fair Debt Collection Practices Act to protect consumers.

While the FDCPA protects consumers on the federal level, the State of Texas has also found it necessary to create its own consumer protections against unscrupulous debt collectors.

How are Texans protected from debt collectors who threaten, harrass or use coercive means to try and collect debt?

The State of Texas protects consumers from debt collectors under the Texas Finance Code, Title 5, Chapter 392.

What protections does the Texas Finance Code offer?

Under Texas Finance Code, a resident is protect from debt collectors who engage in threats, coercion, harassment, abuse, fraud, deception and unfair or unconscionable collection methods. Some common illegal methods employed by debt collectors include:

• using or threatening to use violence to collect a debt
• falsely accusing the debtor of fraud
• threatening the consumer with arrest
• threatening seizure of assets without proper court proceedings
• using profane or obscene language
• making repeated phone calls and causing a phone to ring repeatedly with the intent to harass the consumer

For a complete overview of prohibited debt collection practices under the Texas Finance Code, click here.

What recourse do I have if a debt collector has broken the law and acted without regard to Texas Finance Code?

Violations of Texas Finance Code are remedied through criminal and civil means.

Criminal: Any violation of Texas Finance Code is a criminal misdemeanor. If a debt collector attempts to collect a debt using illegal means, they can be held criminally liable and may face fines of $100 to $500 for each violation.

Civil: In addition to criminal remedies, action by the consumer can be taken under civil law. Remedies include injunctive relief, monetary damages and attorneys fees.

Deceptive Trade Practice: Any violation of the Texas Finance Code by a debt collector is considered a deceptive trade practice under Texas Business and Commerce code and allows the consumer to also take legal action under this code. Texas Business and Commerce code includes financial remedies that amount to three times the amount of any monetary damages incurred by the consumer.

What should I do if I think a debt collector has broken the law by trying to harass, coerce, deceive or abuse me?

These specific violations are best handled by an attorney that is familiar with Texas Finance Code.

If you believe you have been harassed, coerced, deceived, defrauded or abused by a debt collector, click here and we can assist you with finding a qualified attorney that can help.

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