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.
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.]