Defending a Credit Card or Consumer Collection Lawsuit in Texas: Statute of Limitations Defense and the Texas Debt Collection Act

Statute of Limitations for Texas Credit Card Collection Lawsuits

Statute of Limitations for Debt Collection Lawsuits in Texas is Six Years

In Texas, the time frame for a creditor to bring a cause of action for breach of contract is four years from the date of the last transaction. (Tex. Civ. Prac. & Rem. Code § 16.004(a)(3), (a)(4) (2016). The last transaction is generally considered the last charge or the last payment. In most instances, a credit card provider sells the debt to a debt collector who files the cases with the intention of pursuing default judgments against debtors who do not answer the debt collection complaint. In many instances, debt collectors discontinue their lawsuit when the debtor files and answer and asserts affirmative defenses, including the statute of limitations defense and that some, or all of the charges were unauthorized.

The Texas Debt Collection Act

Your Rights as a Consumer Under the Texas Debt Collection Act

Aggressive debt collectors egregiously violate the rights of consumers under the Texas Debt Collections Act, which prohibits debt collectors from making false accusations, harassing debtors with repeated or anonymous calls, using profanity, and engaging in other forms of debt collection harassment. Violators of the Texas Debt Collection Act are subject to criminal and civil penalties. If you think you have been harassed or deceived, you can even seek injunctions and damages against debt collectors. As discussed below, under Texas law, a creditor cannot seize your homestead or your wages to collect credit card or other consumer debts. If a debt collector makes this threat, they are violating the anti-harassment provisions of the Texas Debt Collection Act. Your options include filing a complaint against the debt collector (i.e., someone who directly or indirectly engages in debt collection) with the Office of the Texas Attorney General.

Many of the consumer protection provisions of the Texas Debt Collection Act are similar to the protections provided by its federal counterpart, the Fair Debt Collection Practices Act. For example, under the Texas statute, if you notify a third party debt collector in writing that you dispute a debt, the debt collector must make a written record that you dispute the debt and must initiate an investigation of the dispute before it continues with any further collection efforts. (Texas Fair Debt Collection Practices Act §392.202).

If you have been subjected to harassment or other unlawful debt collection practices, you are entitled to bring a civil lawsuit against the debt collector. You may bring this claim as an independent lawsuit or as a counterclaim to a debt collection lawsuit filed against you by either a debt collector or third-party debt collector. Your right to bring a civil claim for violations of Texas debt collection protections is specifically provided for by statute.

Limits on How a Creditor Can Enforce its Judgment

In Texas, if your residence has been declared a homestead, it cannot be taken to pay a debt-except for debts taken for the purchase of the home (i.e., mortgage in default), for home improvements, for home equity loans or to pay certain taxes. Wages may be garnished only to pay debts related to court-ordered child support, back taxes, and defaulted student loans. Debt collectors cannot garnish wages for repayment of consumer debt.

Texas debt collection answer form template for download

AnswerForms.com offers downloadable answer forms for responding to a debt collection summons that you can easily edit to fit your individual circumstances. Our debt collection answer forms include affirmative defenses based on the expiration of the statute of limitations, and a template for a counterclaim demanding civil penalties for violations of state and federal consumer protection laws.