Can creditors take action to collect a debt after the statute of limitations has expired?

In Texas, creditors cannot take legal action to collect a debt after the statute of limitations has expired. The statute of limitations for a debt in Texas is generally four years. This limitation applies to both written and oral contracts. Once the four year period has passed, the creditor can no longer bring a lawsuit against the debtor to collect the debt. However, this does not mean debtors are off the hook. Although the statute of limitations prevents creditors from taking legal action to collect a debt, they can still contact debtors to collect. This is called debt collection. Creditors may call, write, or email the debtor and request payment of the debt. The creditor may also threaten to take action to collect the debt, such as a wage garnishment or lien on the debtor’s property. It is important to note that debtors can still seek redress against creditors, even after the statute of limitations has expired. If a creditor is found to have acted in violation of the Fair Debt Collection Practices Act or any other applicable laws, the debtor may be able to file a lawsuit for damages. For example, debtors may be able to seek compensation if a creditor engages in harassing behavior or attempts to collect a debt after the four year limitation period has expired.

Related FAQs

What is the meaning of “executory contract”?
What is an assignment for benefit of creditors?
What are the different types of creditors?
What are the different types of liens?
What is a deficiency judgment?
What is the difference between state and federal creditors’ rights law?
What is a creditors’ meeting?
What is a homestead exemption?
How can creditors protect their rights in a bankruptcy proceeding?
What is a “confirmation hearing”?

Can creditors take action to collect a debt after the statute of limitations has expired?

Related FAQs

Related Blog Posts