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Statute of Limitations on Debt in Texas: What You Need to Know

The statute of limitations is a law that sets a time limit on how long creditors or debt collectors have to file a lawsuit against you to collect an unpaid debt. In Texas, the statute of limitations for most debts, including credit card debt, personal loans, and promissory notes, is four years from the date of your last payment or account activity.

How the Four-Year Clock Starts Ticking

The four-year statute of limitations period typically begins on the date of your last payment or account activity on the debt. This could be:

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  • The date of your last minimum payment on a credit card
  • The date you missed a scheduled loan payment
  • The date you used or charged something on a credit card

It’s important to note that the clock resets and the four-year period starts over if you make any payment toward the debt, even a small “good faith” payment, or if you restart the debt by making new charges on a credit card account.

What Happens When the Statute of Limitations Expires?

Once the four-year statute of limitations has expired on a debt in Texas, creditors and debt collectors lose the legal right to sue you over that debt. This is known as a “time-barred” debt.However, even if a debt is time-barred, creditors and debt collectors can still attempt to collect the debt through other means, such as:

  • Calling you to request payment
  • Sending letters demanding payment
  • Potentially reporting the unpaid debt to credit bureaus, which can damage your credit score

The key difference is that they cannot take you to court to obtain a judgment against you for a time-barred debt.

Debt Collector Requirements for Time-Barred Debts

As of 2019, Texas law requires debt collectors to provide written notice if they are attempting to collect a time-barred debt. This notice must state that the debt is time-barred and that the debt collector cannot sue the consumer for the debt.

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Potential Risks of Paying on a Time-Barred Debt

If you make any payment toward a time-barred debt, even a small “good faith” payment, you may inadvertently reset the statute of limitations clock. This could give the creditor or debt collector a new four-year window to potentially sue you for the full amount of the debt.Before making any payment on an old debt, it’s crucial to understand the risks and seek legal advice if necessary.

Seeking Legal Assistance

The statute of limitations laws can be complex, and the specific circumstances of your debt may affect how the law applies. If you’re unsure about the status of your debt or your rights, it’s advisable to consult with a qualified attorney who can review your situation and provide guidance.

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