When debt collectors come knocking, it’s important to stay calm. Unfortunately, that's easier said than done and most people do the opposite.

If debt collectors are harassing you in the Lone Star State, being prepared is key. Your game plan begins with knowing your rights, understanding the law, and familiarizing yourself with potential solutions.

By the end of this article, you’ll understand how Texas debt collection laws impact you. As important, you'll learn about the top resources available to help you regain control of your debt once and for all.

Texas debt collection laws

In Texas, the governance of debt collectors falls under Chapter 392 of the Financial Code. As part of the code, debt collectors in the state must file a $10,000 surety bond with the secretary of state before undertaking collection.

Surety bonds ensure collection agencies adhere to state regulations and industry standards. More than that, they provide a means for financial compensation should the debt collector harm the debtor or engage in misconduct.

Debtors in Texas can determine if a debt collector has filed a bond by searching the state’s Debt Collector Search.

What is the statute of limitations on Texas debt?

Debt collectors have four years in Texas to file a lawsuit to collect unpaid debt. This period is known as the statute of limitations. Once this time limit has expired, debt collectors can no longer pursue repayment in court.

Consumer rights in Texas

As with the rest of the U.S., Texas consumers enjoy numerous rights under the Fair Debt Collection Practices Act (FDCPA). Before taking any action, it's important to go over the act to understand what is and isn’t permissible.

Some of the most important restrictions to consider:

  • Debt collectors cannot contact you at inconvenient hours or locations (i.e., in the middle of the night or at your place of work)
  • With few exceptions, collectors must honor written directions requesting they cease further communication
  • Debt collectors cannot use abusive language and threaten physical harm
  • They cannot misrepresent their identity or any information related to the debt
  • Collectors cannot threaten legal action they don’t intend to initiate. That is, they cannot threaten to sue you unless they truly intend to follow through

Treat collection seriously

Debt collection by itself is a serious matter. In rare cases, debt collection can evolve into legal action. When that happens, it’s critical to respond swiftly.

Failing to respond to a lawsuit in Texas can result in a default judgment. That means the court will automatically side with the collector.

The consequences of default judgments can be severe:

  • Monetary liabilities: most commonly, default judgments end with an order for the defendant (the borrower) to pay the plaintiff (collection agency) the dollar amount specified in the lawsuit
  • Property lien: if a lien is enacted on the debtor’s home, it cannot be sold or refinanced until the debt is cleared
  • Wage garnishment: sometimes, a judge may order a portion of the debtor’s income to be regularly sent to the creditor until the debt is paid off
  • Credit impact: default judgments sometimes harm the debtor’s credit score for years
  • Bank levies: the court may freeze and seize money from the borrower’s bank accounts

The importance of professional help

Debt collection can be complex, frustrating, and anxiety-inducing. For these reasons, consulting with professional help, like a debt relief company, makes sense.

These companies take many forms. Some focus on negotiating lower amounts for existing debts. Others help clients consolidate existing debts into a single, lower monthly payment. And others offer counseling and advice.

Debt relief companies can assist debtors in numerous ways.

  • Professional guidance: an attorney or debt specialist can provide valuable advice unique to your situation
  • Debt validation: leveraging an expert helps ensure you follow the debt validation process correctly
  • Negotiations: debt relief companies are experienced negotiators. If negotiation with a debt collector is necessary, they increase the odds of obtaining a favorable outcome
  • Counterclaims: if a debt collector violates your FDCPA rights, lawyers can help you file a counterclaim
  • Education: debt relief companies can educate debtors about specific Texas debt laws and consumer rights
  • Peace of mind: more than anything, professional help can reduce the stress and anxiety of debt collection

Top debt relief companies

National Debt Relief

National Debt Relief negotiates directly with debt collectors and creditors on your behalf. They help debtors reduce their balances and pay off their obligations faster.

First, they create a personalized debt plan for you. This plan is based on your current financial situation and budget.

Next, you make one payment each month into a separate savings account. This payment replaces existing debt obligations with your creditors.

National Debt Relief then negotiations with your creditors to obtain a settlement agreement. Assuming a deal is reached, funds are dispersed to the creditors from the money saved.

Once dispersed, existing debt balances are cleared.

  • Why we like it: National Debt Relief enjoys A+ accreditation from the Better Business Bureau and exceptional customer reviews.
  • BBB rating: A+
  • BBB customer score: 4.65 out of 5 based on 2,023 reviews
  • Fees: average settlement fee is 21%

Freedom Debt Relief

With a track record spanning more than twenty years, Freedom Debt Relief has helped over 850,000 clients negotiate lower balances with their creditors. In total, they’ve assisted debtors in clearing over $15 billion in debt during their existence.

  • Why we like it: Freedom Debt Relief has a strong track record in an industry known for producing questionable businesses
  • BBB rating: A+
  • BBB customer score: 4.46 out of 5 based on 1,628 reviews
  • Fees: range from 15% to 25% of enrolled debt

New Era Debt Solutions

New Era Debt Solutions is another excellent option for debtors looking to renegotiate their outstanding balances. While it doesn’t enjoy the sheer number of reviews of the first two, the ones it does have are exceptional.

  • Why we like it: competitive fees and strong customer feedback
  • BBB rating: A+
  • BBB customer score: 4.9 out of 5 based on 105 reviews
  • Fees: range from 14% to 23% of enrolled debt