Texas debt law
Texas debt collection laws
The Texas Debt Collection Act, Chapter 392 of the Finance Code, applies to banks and stores collecting their own accounts as well as to collection agencies. This guide covers what it bans, the bond Texas requires, what a collector may still do, and where to complain.
How does Texas law compare with the federal rules?
Texas collectors must follow both the Texas Debt Collection Act and the federal Fair Debt Collection Practices Act. The biggest difference is who is covered.
| Practice | Texas law | Federal law (FDCPA) |
|---|---|---|
| Who must follow it | Anyone collecting a consumer debt, including the original lender (§ 392.001(6)). Source (Texas Legislature, opens in a new tab) | Mainly collection agencies, debt buyers and lawyers who collect debts, not most original lenders. |
| A bond | Third-party collectors must keep a $10,000 surety bond on file (§ 392.101). Source (Texas Legislature, opens in a new tab) | No bond requirement. |
| Threats of arrest | Banned without proper court proceedings (§ 392.301(a)(5)). Source (Texas Legislature, opens in a new tab) | Banned as a false or misleading representation. |
| Threats to seize property | Banned where the seizure would need court proceedings that have not happened (§ 392.301(a)(7)). Source (Texas Legislature, opens in a new tab) | Banned unless the action is lawful and intended. |
| Repeated calls | Banned when made with intent to harass (§ 392.302(4)). Source (Texas Legislature, opens in a new tab) | Banned; Regulation F presumes more than 7 calls in 7 days about one debt is too many. |
| Extra fees and interest | Only if the agreement or the law allows them (§ 392.303(a)(2)). Source (Texas Legislature, opens in a new tab) | Only if the agreement or the law allows them. |
| Suing on an old debt | A debt buyer may not sue after the limitations period (§ 392.307(c)). Source (Texas Legislature, opens in a new tab) | A debt collector must not sue or threaten to sue on a time-barred debt. |
| Fake legal papers | Banned: papers made to look issued by a court or government agency (§ 392.304(a)(10)). Source (Texas Legislature, opens in a new tab) | Banned. |
Does the Texas law cover the bank or store you owe?
Yes. Chapter 392 defines a debt collector as any person who collects (Texas Legislature, opens in a new tab) consumer debts, directly or indirectly, so a card issuer calling about its own account is covered. The state credit regulator says Texas law addresses anyone (Texas Office of Consumer Credit Commissioner, opens in a new tab) trying to collect on a consumer debt.
The federal Fair Debt Collection Practices Act is narrower. It mainly reaches collection agencies, debt buyers and collection lawyers.
What is the Texas collector bond for?
Before a third-party collector may collect in Texas, it must obtain a $10,000 surety bond (Texas Legislature, opens in a new tab) and file a copy with the Secretary of State. The bond runs in favor of anyone harmed by a violation of Chapter 392.
A person with a claim can sue both the collector and the surety company, though the surety's total liability to everyone is capped at the bond amount.
Collecting without the bond is itself a violation, and a successful claim for it carries at least $100 per violation under § 392.403(e). A lawyer can check a collector's bond for you.
What may a Texas collector still do?
The act bans false and coercive threats, not collection itself. It expressly lets a collector threaten a civil lawsuit (Texas Legislature, opens in a new tab) or other court case to collect a consumer debt, tell a debtor who broke a criminal law that arrest may follow proper court proceedings, and use a repossession right that needs no court.
So a letter saying a creditor may sue is lawful. A letter saying you will be arrested for an unpaid card is not.
What can you do if a collector breaks Texas law?
- Sue for an injunction and your actual damages, plus attorney's fees if you win (§ 392.403(a), (b)).
- Claim at least $100 per violation for a missing bond or a few other listed violations (§ 392.403(e)).
- Bring a claim under the Texas Deceptive Trade Practices Act, since a violation counts as one (§ 392.404(a)).
- Report it: the Attorney General can sue to stop violations, and a violation is also a misdemeanor (§§ 392.403(d), 392.402).
A court can award the collector its attorney's fees if it finds a suit was brought in bad faith or to harass (§ 392.403(c)). Talk to a consumer lawyer before you file.
Where can Texans report a debt collector?
For a collection agency or other third-party collector, the state credit regulator points Texans to the Attorney General (Texas Office of Consumer Credit Commissioner, opens in a new tab), whose consumer protection helpline is 800-621-0508. The Attorney General's online complaint form (Texas Attorney General, opens in a new tab) lists unlawful debt collection among the problems it takes.
For a lender the OCCC licenses, call its consumer helpline (Texas Office of Consumer Credit Commissioner, opens in a new tab) at 800-538-1579. You can also file with the CFPB (CFPB, opens in a new tab).
Where to get legal help
Trouble with a collector in Texas? Free legal help.
We are not a law firm and cannot give legal advice. These are the people who can, many of them free. None of them pays us, and we do not pay them.
-
A lawyer
State Bar of Texas Lawyer Referral and Information Service
Refers you to a lawyer for your kind of case. The first consultation, up to 30 minutes, costs no more than $20. Phone (800) 252-9690; Spanish spoken.
Open the State Bar of Texas (opens in a new tab) -
Legal aid
TexasLawHelp.org
A program of Texas Legal Services Center: free guides and forms for debt cases, including answering a debt suit in justice court, and a finder for legal aid near you.
Open TexasLawHelp.org (opens in a new tab) -
Court self-help
Texas State Law Library: legal help
The state law library's list of Texas legal hotlines, clinics and legal aid organizations. Librarians can point you to the law but cannot tell you what it means for your case.
Open the State Law Library (opens in a new tab) -
Legal aid
Free legal aid near you
Legal aid offices give free civil legal help, including with debt lawsuits, to people who qualify. The Legal Services Corporation finder lists the office for your area.
Find legal aid (LSC) (opens in a new tab) -
A lawyer
How to find a consumer lawyer
The CFPB explains where to look for a lawyer who handles debt collection cases, and what experience to look for.
Read the CFPB guide (opens in a new tab)
Things you should know
The downsides, stated plainly.
Read these before you enroll anywhere, including with us. They apply to every debt settlement program.
- Your credit score will drop during the program, and late payments stay on your credit report.
- Creditors may keep collecting while you save, and they can sue. The program does not stop legal action.
- Interest and late fees can keep adding to your balances until each account settles.
- Forgiven debt may be taxable income. A creditor may send you IRS Form 1099-C.
- Fees apply. The fee is a percentage of your enrolled debt, set individually, and charged only after a settlement is reached.
- Not all creditors agree to settle, and not everyone completes the program.
- We do not guarantee any amount, percentage or timeline.
- Debt settlement is not available in all states. We are not a nonprofit or a credit counseling service, and we do not lend money.
- We do not give legal or tax advice. Talk to an attorney or a tax professional about your situation.
What is the Texas Debt Collection Act?
It is Chapter 392 of the Texas Finance Code. It bans threats, harassment, unauthorized charges and misleading statements by anyone collecting a consumer debt, requires third-party collectors to be bonded, and gives consumers the right to sue.
Does the Texas Debt Collection Act apply to original creditors?
Yes. It defines a debt collector as any person who collects consumer debts, directly or indirectly, which includes a bank or store collecting its own accounts.
Can a debt collector threaten to sue me in Texas?
Yes, the act allows a collector to threaten a civil lawsuit. It bans false threats, such as arrest for nonpayment without court proceedings. On a debt past the time limit, a debt buyer may not sue at all.
Where do I report a debt collector in Texas?
Third-party collectors: the Texas Attorney General, by its online form or its consumer protection helpline. Lenders licensed by the OCCC: the OCCC consumer helpline. You can also complain to the CFPB.
Sources
Where the facts on this page come from. Each link opens the original in a new tab.
- 01 Texas Legislature Tex. Fin. Code ch. 392: the Texas Debt Collection Act (392.101 bond, 392.301 to 392.304 banned practices, 392.307 time-barred debt, 392.403 remedies) (opens in a new tab)
- 02 Texas Office of Consumer Credit Commissioner Debt collection practices: Texas law and where to complain (opens in a new tab)
- 03 Texas Office of Consumer Credit Commissioner Filing a consumer complaint (helpline 800-538-1579) (opens in a new tab)
- 04 Texas Attorney General File a consumer complaint (including unlawful debt collection) (opens in a new tab)
- 05 FTC Fair Debt Collection Practices Act (statute text) (opens in a new tab)
- 06 eCFR 12 CFR 1006.14: Harassing, oppressive, or abusive conduct (call frequency) (opens in a new tab)
- 07 eCFR 12 CFR 1006.26: collection of time-barred debts (no suits or threats of suit) (opens in a new tab)
- 08 CFPB Debt collection: consumer tools (opens in a new tab)
- 09 CFPB Submit a complaint (opens in a new tab)
Next step
Collectors calling about several cards?
If you are not being sued, check an illustrative estimate across your unsecured debt, with our fee shown as its own line.
Four short steps
Your estimate first. Contact details last.
- 1How much you owea close guess is fine
- 2What kinds of debtpick all that apply
- 3Which state you live inchecked before anything else
- 4Your estimate, then a real person if you want one