Unsecured Debt Laws in Texas

If you live in Texas and are concerned about paying your unsecured debt, you should know about your rights and obligations under Texas Law. Texas residents are protected by federal and state fair debt collection laws. Texas also limits the steps that creditors can take to collect debtor judgments.

Texas residents are protected by two sets of laws that restrict the activities of third-party collection agencies: The Federal Fair Debt Collection Practices Act and Chapter 392 of the Texas Finance Code. Both laws require collection agencies to respect the privacy of debtors, to refrain from making baseless threats or using vulgar language, or calling during inconvenient hours. The Texas law further requires collection agencies to be bonded by an agency authorized to do business in Texas. Debtors who are the victims of unscrupulous collection agencies have the option of suing the collector under either state or federal law (See References 2 and 3).

The Texas Statute of Limitations on filing a lawsuit to collect a debt is four years after its default date. If a creditor does win a lawsuit against a debtor, the Statute of Limitations on collecting the judgment is ten years, but this can be renewed by a judge. If a debt is past the Statute of Limitations, a creditor or collection agency can still attempt to collect a debt, but can no longer win an enforceable judgment in court (See References 1).

If a creditor wins a judgment against a Texas debtor, the creditor cannot collect the judgment by garnishing the debtor's wages. Creditors can, with some exceptions, garnish the bank accounts of a judgment debtor. Exceptions include money from Social Security income. If the money in your account is from a Social Security payment, you can ask the court to exclude that money from garnishment (See References 1 and 4).