Statute of Limitations on Credit Debt in Texas

The Texas statute of limitations on credit card debt offers residents some protections against debt collectors who seek the repayment of old debts. The statute doesn't erase credit debts that people owe, no matter how old the debts are. Therefore, Texans need to ensure they understand their rights under the law or seek advice from an attorney before they deal with collectors.

Texas Statute

A state's statute of limitations on debt is the amount of time that a creditor or lender has to sue residents to collect unpaid debts. In Texas, the statute of limitations on credit card debt is four years. However, the statute doesn't erase legitimate credit debts that Texans owe. It only prevents a creditor or debt collector from filing a lawsuit against a resident to collect a credit card debt if that debt is more than four years old.

Fair Debt Collection

A creditor or debt collector may still attempt to sue you even if the statute of limitations on a debt has expired. However, that's a violation of the U.S. Fair Debt Collection Practices Act. Texans who suspect that a collector is attempting to sue them to collect credit card debt that's more than four years old may want to seek advice from an attorney on how to respond to the lawsuit. Whatever you do, don't ignore the lawsuit, because doing so may result in the court deciding in the collector's favor even if the statute of limitations has run out.

Debt Collectors

Debt collectors have the right to attempt to collect debts even if the statute of limitations has expired. Therefore, collectors can still contact people to urge them to pay off delinquent credit card balances. Texas residents who make an agreement with a collector to pay off an old debt or who send a payment toward the debt can restart the statute of limitations even if it has expired. The statute is determined by the date of last activity on an account, which is the last date a consumer made a payment or charged something to the account. The collector regains the right to sue a consumer to collect a debt if the statute restarts due to a consumer's payment or payment agreement.

Considerations

One Texas city is among the top ten cities in the U.S. where consumers have the highest average amount of credit card debt. According to the Experian credit reporting company, the No. 1 spot on that list belongs to San Antonio, where consumers had $5,177 in debt on bank credit cards in December 2010. That was 21 percent higher than the national average. If you're among Texans who have large amounts of old credit debts you can't afford to pay, MSN Money article recommends avoiding saying anything to a collector that might restart the statute of limitations. That includes not even acknowledging a credit card bill is yours unless or until you can afford to repay what you owe.