Can Debt Collectors Sue You in Texas and How to Protect Yourself

Debt collectors can sue you in Texas if you owe a debt and haven't made payments in a while.

In Texas, debt collectors have a lot of power to sue you for unpaid debts. According to the Texas Debt Collection Act, a debt collector can sue you if the debt is past due and you haven't made payments in at least 180 days.

If a debt collector sues you, you'll receive a court summons and be required to appear in court. This can be a stressful and overwhelming experience, but it's essential to take it seriously and respond promptly.

The court will then determine whether you owe the debt and, if so, how much you need to pay.

In Texas, debt collectors have the right to file a lawsuit against a debtor to collect money owed to them. This can include credit card debt, medical bills, personal loans, and other types of unsecured debt.

The types of debts that can be the subject of a debt collection lawsuit in Texas are numerous, but it's worth noting that secured debt, such as a mortgage or auto loan, is generally not subject to debt collection lawsuits unless the creditor forecloses on the property or repossesses the vehicle and there is still an outstanding balance owed.

The statute of limitations on debt in Texas is four years, as stated in Section 16.004 of the Texas Civil Practice and Remedies Code. This means that debt collectors have a limited time to file a lawsuit against a debtor.

Debt collectors must provide written notice to a consumer if the limitations period has expired, as required by Section 392.307 of the Texas Finance Code. This law was introduced in 2019 and aims to protect consumers from debt collectors who are trying to collect time-barred debts.

New rules from the federal Consumer Financial Protection Bureau prevent debt collectors from suing or threatening to sue over time-barred debts. This is outlined in Title 12, Section 1006.26 of the Code of Federal Regulations.

Here are some key facts to keep in mind when dealing with debt collection lawsuits in Texas:

In Texas, debt collectors can't sue you for debts that are past the statute of limitations, which is four years. This means they can't take you to court for debts that are more than four years old.

The statute of limitations clock starts after the last account activity, but in some states, it starts when you first miss a payment on your debt. The clock can also reset in some cases, but a new state law introduced in 2019 aims to prevent debt buyers from suing to collect the debt even if a payment is made on the debt after the statute of limitations has expired.

Even though you're protected from being sued after the statute of limitations has passed, you still owe the debt. Unpaid debts remain on your credit report for seven years, regardless of the state you live in.

If you make a partial payment on a time-barred debt, it's not a good idea, as it can reset the clock on the statute of limitations. Instead, you have three options: don't pay, pay the full amount, or settle the debt.

Here are the three options:

It's worth noting that debt settlement can still negatively impact your credit, but less so than nonpayment.

Debt collectors in Texas can sue you for unsecured debt, such as credit card debt, medical bills, and personal loans.

If you're facing a debt collection lawsuit, you may have several defenses available to you. The statute of limitations defense is one option, which means the creditor can no longer collect the debt if the statute of limitations has expired.

You can also argue that the creditor lacks standing to sue if they can't prove they own the debt. Another defense is identity theft, which can be used if the debt is a result of someone stealing your identity.

Fraudulent or deceptive practices by the creditor can also be a defense. If the creditor engaged in these practices, the debt may not be valid. Additionally, a lack of documentation can be a defense if the creditor can't provide sufficient proof of the debt.

Here are some common defenses to debt collection lawsuits in Texas:

A debt defense attorney can help you evaluate the debt, negotiate a settlement, and represent you in court. They can also protect your rights and file counterclaims if the creditor has violated the FDCPA or other consumer protection laws.