Debts can become a huge inconvenience to deal with. They can not only generate a headache for you on a personal level but also create problems in your daily life. Some debt collectors can become quite vicious when the time comes for collection. You need proper awareness of the laws that protect you from exploitation and harassment. Only then you can hope to lead a peaceful life.
A consumer is the one who borrows money. As a consumer, you can take advantage of several laws that oversee debt collection in the State of Texas. Some of these laws also protect the consumer from harassment of the collectors.
What is a Statute of Limitations?
There are a set of rules and regulations that determine the limits of time required to act. These rules represent the statute of limitations. Almost every U.S. state has its own particular rules on how to determine time limits over various causes of action.
For example; if someone physically harms you, you have two years after the incident to file charges against them.
Your Options When Debt Is Unaffordable
Your debt may be within the statute of limitations, but you may just not be able to afford it. In this case, there are numerous debt relief options that you can consider.
For example, bankruptcy can provide debt relief from your debt, and often discharge your unsecured debt. For Chapter 7 bankruptcy, you may have to qualify. The means test helps estimate qualification for Chapter 7 bankruptcy. Feel free to check out this Chapter 7 means test calculator Texas. Chapter 7 is one of the most affordable debt relief options in many cases.
You could also look at Chapter 13 bankruptcy. Chapter 13 is a payment plan bankruptcy where you get into a court-approved repayment plan.
Finally, you could look at either debt settlement which negotiated the total amount due or you could look at debt management which negotiates the total interest rate.
What is the Statute of Limitations on Debt Collection in the State of Texas?
If you have any form of debt, such as credit card debt, the company can file for its collection within four years. The statute of limitations for debt collection expires within four years from the date of borrowing. Once this has passed, the debt collector can no longer file for repayment.
The laws of debt collection are designed to uphold the rights of both the collector and the consumer. Texas Debt Collection Act and the Fair Debt Collection Practices Act define the rules that govern debt collection. They define the parameters of harassment and prevent certain actions by the collector.
What is the Policy for Using Statute of Limitations as Defense in the State of Texas?
Once the 4-year limit passes, the consumer can use the expiration of the time limit as a valid defense in the court. However, this defense is only valid if the collector fails to file for a lawsuit within those four years. It has no bearing on an ongoing case.
Sometimes, the lawsuits can drag for years. That is why, if the lawsuit is filed within four years, the statute no longer counts as a valid defense. The debt collector can legally pursue you for debt collection even after four years.
These limitations of time are meant to squash any issues rising from old debts. Said issues can become incredibly complicated and headache-inducing if allowed to fester. That is why the statute renders all debts older than four years moot. If a debt collector suddenly remembers to pursue an old debt and files a lawsuit against you, your defense attorney can easily convince the charges in your favor by citing the statute.
There are some cases in which the statute of limitations may be extended by the court. For example, if you start making your debt payments after three years and then stop, the judge may rule that the four-year deadline granted by the statute starts the date you made your last payment.
How Do the Payment Dates Work For Statute of Limitations?
Debt collectors can legally pursue you for the collection of what you owe them in several ways. However, some of these avenues have a date of expiration. The collectors can still sue you for an old debt once a certain time limit has passed, but you can use the expiration of the statute as a valid defense. This amount of time is defined as the ‘Statute of Limitations’.
The specific time limit in the statute of limitations depends upon two factors;
- The kind of debt you have; such as credit card debt, bank loan, etc.
- The State you live in, or the State where you incurred the debt.
In the State of Texas, the statute of limitations for debt collection is four years.
When Does the Clock for Statute of Limitations Start?
The statute of limitations clock begins on the last day of activity on your account. The last date could be counted when you;
- Made your last payment
- Used your account for the last time
- Made a promise of payment
- Entered an agreement for payment
- Acknowledged your liability for the debt
Summation
A debt collector can sue you for repayment of an old debt within four years in the State of Texas. Check to see if the debt collection company may be fake. After this statute of limitations expires, they cannot legally pursue you in court. However, even if the date for filing a lawsuit passes, that does not mean your liability disappears.
The collector may still retaliate against you by ruining your credit ratings and preventing you from opening any new lines of credit. In such cases, a Texas debt relief attorney and personal accountant can review your situation and offer appropriate advice.
