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Debt collection lawsuits can be intimidating and confusing for anyone, and Texas residents are no exception. If you live in The Lone Star State and are facing a debt collection lawsuit, let’s take a closer look at the process including when collectors can sue, your legal rights, the statute of limitations, and steps you can take to mitigate any financial repercussions…
Can debt collectors sue you in Texas?
Yes, debt collectors can sue you in Texas if you have an unpaid debt. When you fail to pay a debt, the original creditor may attempt to collect directly or sell the debt to a third-party collection agency. Either the original creditor or the collection agency that purchases your debt has the legal right to file a lawsuit against you to recover the money owed.
Pre-lawsuit collection attempts
Before filing a lawsuit, debt collectors typically:
- Send collection notices.
- Make phone calls requesting payment.
- Report the delinquency to credit bureaus.
- Offer settlement options or payment plans.
Filing the lawsuit
If collection attempts fail, the creditor may file a lawsuit. The process typically involves:
- Petition filing: The creditor files a petition with the appropriate court, usually in the county where you live or where you signed the contract.
- Service of process: You must be properly “served” with a citation and petition. This usually occurs through:
- Personal delivery.
- Delivery to someone at your residence.
- Certified mail.
- Alternative service methods (with court approval).
- Answer period: After being served, you have limited time to respond—typically 14 days for justice court cases or 20 days for county or district court cases.
Court proceedings
If you respond to the lawsuit:
- A hearing date will be set.
- Both sides can present evidence and testimony.
- A judge or jury will determine the outcome.
If you don’t respond within the required timeframe:
- The creditor can request a default judgment.
- You automatically lose the case without presenting any defense.
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Statute of limitations in Texas
The statute of limitations sets the maximum time a creditor has to file a lawsuit after the debt becomes delinquent. In Texas, these time limits apply:
- Written contracts: 4 years
- Oral agreements: 4 years
- Open accounts (including credit cards): 4 years
- Promissory notes: 4 years
- Medical debt: 4 years
Important notes about the statute of limitations:
- The clock typically starts on the date of last activity or payment.
- Making a payment or acknowledging the debt in writing can restart the clock.
- Collectors can still attempt to collect after the statute expires, but cannot legally sue.
- The statute of limitations is an affirmative defense you must raise; courts won’t dismiss time-barred cases automatically.
Your legal rights
There are laws on both a federal and state level which offer some protection:
Federal protections
The Fair Debt Collection Practices Act (FDCA) prohibits debt collectors from:
- Using harassment, threats, or abusive language.
- Contacting you at inconvenient times (before 8 AM or after 9 PM).
- Contacting you at work if you’ve told them not to.
- Misrepresenting the amount you owe.
- Threatening legal action they cannot or do not intend to take.
- Discussing your debt with third parties (except your spouse or attorney).
Texas-specific protections
Texas has additional consumer protections under:
- Texas Debt Collection Act: Prohibits various unfair collection practices and provides additional state-level protections.
- Texas Deceptive Trade Practices Act: Offers protection against deceptive business practices.
What happens after a judgment?
If the creditor wins the lawsuit, they obtain a judgment against you which allows them to:
Wage garnishment
Texas law provides significant protection against wage garnishment:
- General consumer debts cannot be collected through wage garnishment.
- Exceptions: child support, alimony, student loans, and tax debts.
Bank account garnishment
Creditors with a judgment can freeze and seize funds from your bank accounts unless the funds are exempt under Texas law.
Property liens
Judgment creditors can:
- Place liens on real property you own.
- The lien remains until the debt is paid or expires (10 years, with possible renewal).
- The lien must be satisfied if you sell the property.
Property seizure (writ of execution)
After a judgment, creditors may get a writ of execution allowing the sheriff to seize and sell certain non-exempt property.
Texas property exemptions
Texas offers some of the most generous exemption protections in the nation:
Homestead exemption
- Urban homesteads: Up to 10 acres with improvements.
- Rural homesteads: Up to 100 acres (single person) or 200 acres (family).
- No dollar limit on the value of the homestead.
Personal property exemptions
Texas residents can protect up to $50,000 in value ($100,000 for families) of certain personal property, including:
- Household furnishings.
- Clothing and food.
- Farming/ranching vehicles and equipment.
- Tools of trade.
- Two firearms.
- Limited jewelry.
- Two vehicles per licensed family member.
- Certain livestock and pets.
Financial account exemptions
- Retirement accounts.
- College savings plans.
- Social Security benefits.
- Unemployment benefits.
- Workers’ compensation.
- Child support and alimony received.
Legal aid resources in Texas
Some organizations that may be of legal assistance include:
The bottom line
Debt collection lawsuits in Texas follow specific procedures and timelines. Understanding your rights and the legal process can help you respond effectively if you’re sued. While Texas law offers strong protections for certain assets, being proactive about addressing debt issues is always the best approach. If you’re facing a debt collection lawsuit, consider consulting with an attorney who specializes in consumer debt to explore your options and develop the best strategy for your situation.
There’s always JG Wentworth…
If you have $10,000 or more in unsecured debt in Texas, or any other state, there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include:
- One monthly program payment
- We negotiate on your behalf
- Average debt resolution in as little as 24-60 months
- We only get paid when we settle your debt
If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?
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* Program length varies depending on individual situation. Programs are between 24 and 60 months in length. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 43% before our 25% program fee. This is a Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NV, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that you consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.