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Time-Barred Debts

Debt Collection & Payday Loans

This article provides information on time limits on debt collection.

Learn more about when a debt becomes time-barred and what your options are once that happens. 

When is an old debt too old for a collector to sue?

Texas Civil Practice and Remedies Code 16.004 controls the statute of limitations on debt in Texas. Time-barred debt is old debt that a debt collector cannot sue you to collect, as it has reached the statute of limitations, but they may still attempt to collect. The statute of limitations on debt in Texas is four years. They have four years to bring a lawsuit; otherwise, the debt becomes time-barred. 

When does the clock start ticking?

Usually, the clock starts ticking when you fail to make a payment. 

Do I need to pay a debt that is considered time-barred?

That is up to you. While you do have options, each one has consequences. Talk to a lawyer for help strategizing. 

What are my options?

Pay nothing on the debt. Although the collector may not sue you to collect the debt, you still owe it. The collector can continue to contact you to try to collect unless you send a letter to the collector demanding that communication stop. Not paying a debt may make it more challenging or expensive to get credit, insurance, or other services because not paying may lower your credit score. 

Make a partial payment on the debt. In some states, if you pay any amount on a time-barred debt or even promise to pay, the debt is "revived." This means the clock resets, and a new statute of limitations period begins. It also often means the collector can sue you to collect the total amount of the debt, which may include additional interest and fees. 

Pay off the debt. Even though the collector may not be able to sue you, you may decide to pay off the debt. You may be able to negotiate a settlement. Some collectors may be willing to accept less than the amount you owe to settle the debt, either in one large payment or a series of small ones.   

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