What is the statute of limitations on debt?

Texas law says there is a 4-year period for filing a lawsuit to collect on a debt.

Usually, debt collectors or creditors contact people about a debt they owe. If an account is in default, they may offer a payment plan or other options. If those options fail, a collector may choose to file a lawsuit to recover the debt.

The collector has a certain amount of time to file the suit. The law that sets the time limit for filing suit is called a "statute of limitations."

The statute of limitations for debt is in Section 16.004 of the Texas Civil Practice and Remedies Code.

When does the clock start ticking?

The statute of limitations doesn't specify. Each case may be different. If you signed a contract or other agreement, that document may say when an account goes into default. Some contracts may say an account goes into default when a person missed a required payment. In other situations, the date of your last payment may be when the clock starts.

It can be difficult to determine when the 4-year period ends. You should speak with an attorney for help figuring out when the 4-year period ends for you. For information on finding an attorney, please see the library's Legal Help page.

Can the clock restart?

In the past, making a payment or verifying that you owe the debt could restart the clock on the 4-year period. This created a problem called "zombie debt." The 4-year periods would renew over and over.

A new state law introduced in 2019 aims to protect people from zombie debt. It says that time cannot be restarted due to making a payment or agreeing you owe the debt. It also requires that debt buyers provide written notice if they are taking action after the period has ended. See Section 392.307 of the Texas Finance Code.

What if it has been more than 4 years?

Once the period is up, the law prohibits debt collectors from filing a lawsuit to recover the debt. This means the debt is "time-barred." You still owe time-barred debts, but a collector loses the ability to file a lawsuit. A collector may still take other actions to collect the debt.

Even if it has been more than 4 years, negative information may appear on a person's credit report. Section 20.05 of the Texas Business & Commerce Code says credit reports may look back up to 7 years. In some cases, the look back period may be longer.

Related FAQs & Guides

FAQs

• Debt collectors keep calling me. What can I do?
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• For how long can negative information appear in my credit report?

Guides

• Debt Collection
• Credit Reports
• Small Claims Cases