Texas debt: no wage garnishment, and old debts stay old

Four years for an action for debt (Civil Practice and Remedies Code section 16.004), which covers most consumer debt, written or oral. Some negotiable promissory notes may have six years under Business and Commerce Code section 3.118.

Unlike many states, Texas uses the same four years whether the agreement was written or oral. For a typical credit card, store card or medical bill, the clock starts when the debt was due and unpaid.

Whether a payment would restart the 4-year limit is covered, state by state, in our page on time-barred debt.

Limits vary a lot between states: by comparison, Wyoming sets 8 years and Hawaii sets 6 years for similar debts.

Before paying anything in Texas, read whether to pay a collection agency and how to request debt validation.

National collectors active in Texas include American Coradius International and Capital Management Services; our guides list their official dispute addresses.

A debt buyer may not sue or start arbitration to collect a consumer debt after the four-year period has expired. For debt buyers, once the time limit has passed, the claim is not revived by a payment, an oral or written reaffirmation, or any other activity on the debt. These debt-buyer rules were added by HB 996 in 2019.

That matters because in many states a small "good faith" payment restarts the clock. In Texas, if a debt buyer owns the debt and the four years have passed, a payment does not give it back the right to sue.

A debt buyer collecting a time-barred debt must give a written notice that begins "THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT." If a debt buyer writes to you about an old debt without that notice, keep the letter.

For other creditors, Texas generally requires a written, signed acknowledgment to revive a claim (Civil Practice and Remedies Code section 16.065). So if the original creditor still owns the account, do not sign anything acknowledging an old debt before getting advice.

Current wages for personal service cannot be garnished, except to enforce court-ordered child support or spousal maintenance (Texas Constitution article XVI, section 28). A credit card company, hospital or debt buyer cannot take money from your paycheck, even after winning in court.

After winning a lawsuit, a creditor can get a court order freezing and possibly seizing money in a bank account, including wages once they have been deposited. Keeping wages separate from other money does not change that once they are in the account, so a judgment is still worth avoiding.

Federal rules allow some debts, such as defaulted federal student loans and federal taxes, to be collected from wages despite this.

To see how Texas compares with other states, and the ways to stop or reduce a garnishment, read our guide to wage garnishment.

Sued in Texas? Do not miss the deadline: read how to get a debt lawsuit dismissed before you respond.

The Texas Debt Collection Act (Finance Code chapter 392) covers original creditors as well as third-party collectors. Federal law mainly covers collectors and debt buyers, so the Texas act is what applies when a bank or store collects its own account.

The federal dispute rights still apply to any collector or debt buyer writing to you: a written dispute inside the validation period makes it stop until it mails verification.