Texas Debt Relief Options
- You have many options for debt relief in Texas, and you don’t need to tackle your debt alone.
- Debt collectors in Texas are regulated by the Fair Debt Collection Practices Act and the Texas Debt Collection Act.
- The statute of limitations on debt in Texas is four years, and this period cannot be renewed.
- The statute of limitations on judgments in Texas is 10 years, but this time frame can be extended.
Texas debt relief options
You have many options for Texas debt relief, from do-it-yourself plans to working with licensed professionals. If you’re facing financial hardship, here are some of the best debt relief options for Texas residents:
DIY budget
Best if you’re comfortable creating and managing your own payment plan
One way to find debt relief is to tackle it yourself. You can use strategies like the debt avalanche or debt snowball methods, for instance. If you tackle these payments systematically and routinely, you could become debt free over time.
Get started by creating a budget to pay off debt.
Call your creditor
Best if your debt hasn’t gone to collections yet
Calling your creditor is a smart first step to tackling your debt. Your creditor may offer a debt relief or debt forgiveness program. Even if they don’t have programs available, they may be willing to negotiate a more affordable repayment plan with you.
Get started by checking your bills for your creditor’s contact information.
Credit counseling
Best if you want help from an expert
A credit counseling agency can help you find the best strategy for paying off your debt. They may work with you to create a budget and evaluate other debt relief strategies, such as debt consolidation or a debt management plan.
Get started by finding a certified credit counselor in Texas.
Debt consolidation
Best if you have multiple debts and good credit
Debt consolidation involves combining multiple debts into a single payment. You can use this strategy for many types of debt, such as credit cards or personal loans. The idea is to lower your overall interest rate by combining higher-rate debts into a single, lower-rate loan. For example, one common approach is to use a 0% APR or balance transfer credit card to pay off balances on other, higher-interest cards.
Get started by comparing credit card offers and debt consolidation loans.
Debt settlement
Best if you can’t afford any other option
Through debt settlement, you’ll negotiate a lower payment plan with your creditor either on your own or by working with a debt settlement company. Still, know that debt settlement negatively impacts your credit score and will stay on your credit report for up to seven years. As such, this is best kept as a strategy of last resort. Speak with a credit counselor before pursuing debt settlement.
Get started by learning more about debt settlement.
Debt collection laws in Texas
You are protected by both state and federal laws when seeking debt relief in Texas. The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits debt collectors from harassing you or using deceptive or misleading tactics.
Debt collectors in Texas are also regulated by the Texas Debt Collection Act. This Act states that debt collectors cannot use abusive or fraudulent tactics. These include:
- Threats of violence, arrests or criminal charges
- Using profanity
- Making false accusations of fraud or other crimes against you
- Misrepresenting themselves or the amount of debt you owe
- Making collect calls without disclosing their true name before you accept the charges
- Sending falsified documents that appear to be from a court or other agency
Violations of the Texas Debt Collection Act subject the perpetrator to criminal and civil penalties, and you can even seek damages against a debt collector who uses any of the prohibited tactics.
If you think a debt collector has violated your rights, file a complaint with the Texas Attorney General’s office. These complaints are public, but you can also submit an anonymous tip if you know about a violation that’s occurred by emailing [email protected].
Debt statute of limitations in Texas
The statute of limitations on debt in Texas is four years, which applies to both written and oral contracts.
Debt collectors can’t sue you or try to collect debt from you after the four-year statute of limitations has expired. This doesn’t mean you no longer owe the debt — however, creditors and debt buyers can no longer collect through a lawsuit.
While previous laws allowed this clock to restart if you made a payment or acknowledged the debt, this is no longer the case.
Learn about statute of limitations on debt rules across the nation, and when the clock starts for different types of debt in each state.
Texas debt statistics
Texans carry more debt than the national average and report higher levels of financial insecurity relative to the average American. Here’s how debt in Texas compares to national averages:
- Monthly debt payments: Texans pay $1,757 monthly toward debt versus the national average of $1,597.
- Total credit card debt: On average, Texans have $8,042 in credit card debt versus the national average of $7,321.
- Financial insecurity: Around 42% of Texas households versus 36% of American households report it’s hard to pay usual expenses.
If a creditor wins a lawsuit against you, they are given 10 years to enforce the judgment. After this period, the judgment becomes dormant. Unlike time-barred debts (which cannot be revived), dormant judgments can be renewed for a longer period. However, creditors generally have only two years to revive a dormant judgment.
Frequently asked questions
There isn’t a single, comprehensive government debt relief program in Texas that forgives all types of debt. However, you can find resources to help you with your debt, including working with a credit counselor. You can find licensed counselors through the Texas Office of Consumer Credit Commissioner.
In most cases, creditors cannot garnish wages in Texas. However, there are a few types of debt that do allow for wage garnishment:
- Child support
- Spousal support
- Student loans
- Unpaid taxes
Texas law also allows for your bank account to be frozen if you have unpaid debts. Creditors can do this only after winning a lawsuit and obtaining a court order.
If you need Texas debt relief, the best course of action is to speak with a nonprofit credit counselor. They can recommend the best debt relief option for you, such as debt settlement or consolidation. They can also help you create a debt management plan and avoid falling prey to debt relief scams.
No matter your situation, we’ll find the best solution together. Just a few clicks (or taps) away!
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