Texas’ Statute of Limitations on Debt: What You Need to Know

If you are facing significant amounts of debt, it might be helpful to review the statute of limitations for debt in Texas. Although this might seem like a complicated legal phrase, it is actually quite simple – and it refers to a legal time limit on debt collections. In some cases, the statute of limitations can help you escape creditors and pursue greater financial security.

To learn more, consider booking a consultation at the Garza Law Office, PLLC. This established debt defense law firm in Texas has helped numerous people handle their debts with dignity and confidence. Dora Alicia is an experienced debt defense lawyer, and she has over nine years of experience after establishing Garza Law Office, PLLC in 2015. Perhaps most notably, she has considerable experience with the Texas Debt Collection Act.

What Does “Statute of Limitations” Mean?

There are statutes of limitations for various crimes and legal processes in Texas. These statutes vary depending on each specific situation. There are statutes of limitations on personal injury lawsuits, criminal proceedings, and, of course, debt collection.

The main thing you need to understand about the statute of limitations is that it is a legal time limit. Once this legal time limit expires, parties are no longer allowed to take legal action.

Why do statutes of limitations even exist? There are many reasons. Firstly, statutes of limitations prevent the court system from being overwhelmed. Courts are already pushed to their limits, and it makes sense to rule out cases involving issues from many years ago. Statutes of limitations also help ensure accurate, reliable evidence. Evidence has a tendency to become increasingly unreliable as time passes. Documents get lost, eyewitnesses move away, and data files get corrupted over time.

How Does the Statute of Limitations Affect My Debt in Texas?

The statute of limitations for debt collection in Texas is four years. In other words, your creditors can no longer pursue the debt after four years has passed. Once this time limit expires, they have no other option but to write off your debt – and you can avoid paying it.

In 2019, Texas increased these protections even further. Previously, there were questions as to whether a partial debt payment during the four-year window “resets” the time limit. However, the new law unequivocally states that this is not the case. Even if you made a payment on your debt, the remaining sum is no longer collectible after the four-year time window expires. This time limit always begins when your debt first went to collections – and not after your last payment.

Should I Avoid Paying My Debt for Four Years?

Based on this information, you might assume that it makes sense to simply avoid paying your debt for four years. You might think that as long as you can handle the constant hassling of your creditors for four years, you’re home-free.

However, you should consider the potential consequences of this approach before making any hasty decisions. Your creditors could still sue you during the four-year window. In addition, unpaid debts will negatively affect your credit score. You should know that there is a seven-year lookback window when it comes to your credit score, and you might not want to wait for seven years before purchasing a home, getting a car loan, and more.

A debt defense lawyer may be able to help you reach a compromise with your creditors. Although you might balk at paying off the full sum, you may be able to reach a settlement with your creditors that serves everyone’s best interests. If these debts remain unpaid for a few years, your creditors may be well aware of the approaching statute of limitations – and they may be willing to accept a much lower sum than your total debt amount.

It may be possible to work out some kind of payment plan with your creditors. You might also offer them a one-time payment to settle the debt – and this could help you maintain a positive credit score for the foreseeable future.

Contact an Established Debt Defense Law Firm in Texas

If you would like to continue this discussion in more detail, consider booking a consultation with Garza Law Office, PLLC. Over the years, we have helped numerous hard-working individuals get creditors off their backs. Our experienced debt defense lawyer is fluent in both English and Spanish, and we can help people from all walks of life. While the statute of limitations could provide an opportunity to escape debt, there are many other potential strategies to discuss. Call (956) 329-1304 to speak with our debt defense attorneys today.

Dora Alicia Garza

Dora Alicia Garza is a seasoned attorney based in Texas and the Founder of Garza Law Office, PLLC. She has built a respected practice across multiple areas of law, including criminal defense, family law, personal injury, guardianships & wills, estate planning & probate, immigration, debt defense and juvenile law. Learn more here.