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Debt Collection

This research guide provides information about your rights under Texas and federal law when dealing with debt and debt collectors.

 Collecting the Debt

If you owe a debt to someone, they have a few different ways of collecting on it. This page will explain some of the common ways that creditors and debt collectors will try to collect on a debt.

Filing a Lawsuit

If contacting you to get you to pay the debt has not worked, the next step for a debt collector is to file a lawsuit. The debt collector has a certain amount of time to file the suit, called the "statute of limitations." In Texas, the statute of limitations for debt is 4 years. After that time passes, they can no longer file a lawsuit to collect the debt.

If the creditor or debt collector wins the lawsuit, they will obtain a judgment against you. That judgment can then be enforced in a variety of ways unless you do not have any money or assets that the creditor could claim. This is commonly called being "judgment proof."

Texas Law

Understanding the Law


Wage Garnishment vs Writ of Garnishment

Wage garnishment is something that people commonly think of as a way for debt collectors to take the money that they owe. In Texas, wage garnishment is prohibited by the Texas Constitution except for a few kinds of debt: child support, spousal support, student loans, or unpaid taxes. A debt collector cannot garnish your wages for ordinary debts.

However, Texas does allow for a bank account to be frozen. Once your wages are deposited into your bank account, the funds can be frozen and possibly seized. In order to do this, a debt collector must have won the lawsuit and had an order issued by the court. This can be confusing because the order is called a "writ of garnishment" but it still cannot be used to take incoming wages.

Texas Law

Understanding the Law


If a piece of property is put up as collateral for a loan, this is called a "secured transaction." The collateral may be repossessed if the debtor does not pay as they are supposed to, even without a court order. The information below explains when property may be repossessed for unpaid debts.

Understanding the Law

Judgment Liens

If you own a house or land in Texas, a creditor who sues you for debt and wins can place a "judgment lien" on your real property. If you sell the property, they may be able to take the money they are owed from the proceeds of the sale. "Homestead" property, meaning your primary place of residence, may be exempt from judgment liens.

A judgment lien in Texas lasts for ten years (unless the debt was owed to a government agency).

Texas Law

Understanding the Law