If you are living in Texas and are contacted by a creditor or collection agency about an old debt, check whether the debt is within the statute of limitations. Most debts have a statute of limitation of four years: If a creditor sues you for a debt that is out of statute, you can ask the judge to dismiss the case. If a debt is no longer under the statute of limitations, creditors will often still try and persuade you to pay.
An open account is a debt in which a borrower is given an open line of credit that she can then draw upon as she needs or desires. In many states, credit cards are considered to be open account debts. According to Texas Civil Statute Sec. 16.004, the statute of limitations on open accounts is four years.
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The statute of limitations on enforcing written contracts is four years in Texas. While there is some controversy over whether credit cards are considered to be "written contract" debts, in Texas, the statute of limitations on both written contracts and open accounts is the same.
In Texas, the statute of limitations on collecting a judgment is 10 years, and a judge can renew the judgment if your creditor requests it. Your creditor can continue to seize your assets, as permitted by law, during this time.
In his article, "Third Party Debt Collectors: Know Your Rights " (available on the Texas Attorney General's website) Greg Abbott notes that even if the statute of limitations has expired, there is nothing in the law that prevents your creditor from trying to collect the debt from you. Your creditor may still contact you about the debt, as may a third-party collection agency. If the collection agency or creditor tries to sue you, you can ask the court to dismiss the case because the debt is past the statute of limitations. You are also entitled, under the federal Fair Debt Collection Practices Act (FDCPA), to send a letter (via certified mail, return receipt requested) asking the collection agency or creditor to not contact you again. According to the FDCPA, after the agency or creditor receives the letter, they may only contact you once more to let you know if they plan to take further action.
The statute of limitations in Texas applies only to the ability of your creditor to sue you in court for the debt: Your credit report is another matter. Your creditor can continue to report your debt to the credit bureaus for seven years after the date you defaulted on the debt.