Texas Collection Laws

Texas Capitol | Texas Collection Laws
  • Review the means available to a creditor to collect on a judgment in Texas.
  • Understand that wages in Texas are usually safe from garnishment from an unsecured creditor.

Learn Texas's Rules For Garnishment, Liens, and Foreclosure

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the Bills.com resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, and a lien on the debtor’s property. A creditor that is granted a judgment is called a “judgment-creditor.” Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Texas Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

Wise Advice In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

Texas Garnishment rules are found in Title 3, Chapter 63. Under CP § 63.004 “Except as otherwise provided by state or federal law, current wages for personal service are not subject to garnishment.” In other words, Texas outlaws wage garnishment for most debts, but not for delinquent child support, tax, or federal student loan payments.

Generally speaking, 401(K) or other retirement funds are exempt from garnishment. It is advisable to have those funds deposited into a separate bank account to ensure financial accounting if you are concerned about garnishment on those payments.


A levy means that the creditor has the right to take whatever money in a debtor’s account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concept is the same.

In Texas, a levy or attachment is allowed under Title 3, Subtitle A, Chapter 59. Levy is allowed if the plaintiff possesses a legal instrument such as a notice of levy commanding the financial institution for a claim against the account. Texas offers many exemptions for consumers:

  • Homesteads: Generally 100% exempt, except for:
    1. Purchase money liens
    2. Mechanic’s and materialman’s liens for work on that property
    3. Taxes
    Urban homesteads shall not exceed 10 acres and rural homesteads 200 acres for a family, or 100 acres for a single adult.
  • Automobiles: Generally 100% exempt from the claims of third party creditors.
  • Pensions and retirement accounts
  • Tools of the Trade: Tools, equipment, books, machines used in a trade or profession.
  • Jewelry: Not to exceed 25% of the dollar limit for personal property, which is $60,000 for a family, $30,000 for a single adult.
  • Home furnishing, heirlooms, food farming and ranching vehicles, firearms, sporting equipment and certain animals.
  • A dollar cap on exempt personal property: $60,000 for a family and $30,000 for a single adult.
  • Workers' compensation claims (Texas Labor Code 408.201)

See Texas Property Code 42 to learn more about the exemptions in the Lone Star State. If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.

Texas Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

Texas lien law is tricky and tipped in favor of consumers. Texas allows a lien for a money judgment under Title 5, Subtitle B, Chapter 51. Under Title 5, Subtitle B, Chapter 53, mechanics and contractors (and similar laborers and professionals) a have the right to place a lien on a property. This also includes creditors for unsecured debt (credit cards, auto loans, and so on), see Texas law Title 3, Chapter 24.

Texas homeowners can protect their residence by filing a homestead declaration. A Texas homestead is not a flawless shield against creditors, however. A homestead is not exempt from liens, but is exempt from any seizure or forced sale attempting to enforce the lien (Exocet, Inc. v. Cordes, 815 S.W.2d 350, 352 (Tex. App. ? Austin 1991, no writ)).

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Texas Statutes of Limitations

Each state or commonwealth has its own statute of limitations on civil matters. Here are some of Texas’s statute of limitations for consumer-related issues:

Account/Type Years Statute
Texas statutes of limitations. Source: Bills.com
Credit card 4 Texas Civ. Prac. & Rem. Code § 16.004(c)
Spoken contract 4
Written contract 4
Mortgage contract 4
Promissory note 6 Texas Bus & Com. Code § 3.118(a)
Judgment 10* Texas Civ. Prac. & Rem. Code § 52
* Can be renewed (Texas Civ. Prac. & Rem. Code § 31.006) A non-Texas judgment may be domesticated in Texas (Tex. Civ. Prac. & Rem. Code § 35.003 and § 16.066)

When the statute of limitations clock starts depends on the circumstances and the particular statute. In most states, the clock starts after the cause of action accrues. Texas follows the general rule (Texas Civ. Prac. & Rem. Code § 16.004(a)). The clock may be paused (called "tolled") under some circumstances, or renewed (Texas Civ. Prac. & Rem. Code § 16.063).

Wise Advice Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

See the Bills.com resource Statute of Limitations on Debt if you reside in another state.

Texas Foreclosure

Texas foreclosure laws are found in Title 5, Subtitle B, Chapter 51, Section 003 to learn more about the rules surrounding foreclosure in this state, including deficiency balances (Property code § 51.003-51.005). Texas has no anti-deficiency rule. See also the Bills.com resource Texas Mortgage Deficiency Balance to learn more.

Texas Payday Loan Collection

See the Bills.com resource Payday Loans & Hot Checks in Texas to learn how Texas law protects consumers of payday loans.


Consult with a Texas attorney experienced in civil litigation, consumer law, or bankruptcy to receive precise answers to your questions about liens, levies, and garnishment in Texas.

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Comments (127)

Abigail F.
Grand Prairie, TX  |  April 01, 2014
In May 2013, I was awarded a judgment in the civil suit I filed against my former acting coach for breach of contract. After 30 days of no payment, nor any attempt to contact me to set up payment, I filed an Abstract of Judgment against his home. Again - no payment; he is just totally ignoring me. I have been reading about Writs of Garnishment and Writs of Execution. From what I can tell, I'll need an attorney to help me with these. The property that the Abstract of Judgment is attached to is homesteaded (per his wife). She is threatening me that if I don't take it off, she will hire an attorney and I'll also have to pay her costs for his services. Is this true? Is the Writ of Garnishment or Writ of Execution a viable path to try and secure payment or would I be paying an attorney for nothing? It doesn't seem fair, or even logical, to have a system for taking someone to small claims court if they can legally ignore the judgment and all the laws protect the debtor. Why even have a small claims court if it has no way to enforce its judgments? I am totally frustrated. Is there anything I can legally do to secure what the court awarded me?
April 01, 2014
Civil procedure law is full of precise, rigid rules. When it comes to collecting on a judgment, which the law calls "remedies," the civil procedure rules are even more exact. Breaking one of these rules can scuttle all of the work and money you put into obtaining a judgment. That is why it pays to hire a lawyer who has remedies experience when collecting a judgment.

I do not know for certain if Texas allows judgment-creditors to put a lien on the homestead of judgment-debtor's spouse. It would be not helpful for me to express my guess. Consult with a Texas lawyer who has remedies experience.
Al L.
Leon Valley, TX  |  March 27, 2014
I have a judgment from credit card debt that was awarded by default in California. I was never officially served but when I looked up the law to dispute this i believe the SOL has already gone up. Since the judgment was issued it been nearly 9 years and since fallen off credit report a couple of years back. I moved to San Antonio, Texas over 4.5 years ago. I just received a letter from a collection agency trying to collect this judgment at the judgment amount at the time of lawsuit/charge off. They're offering 80% or $6.3k of the original debt $8k in the initial letter of now the 5th agency. Its my understand that unsecure debt since I'm living in Texas, can't garnish wages, car or home. I don't own a home and the car I have is being paid off. My question for you is, is this a debt I should pursue to attempt to settle if I could pay in full up to 50% not 80% being offered/asked for or given Texas law and the age of the debt should I continue to wait it out? Any advice as to what one might do in the case?
March 28, 2014
You have a tricky situation. My first and last thought here to recommend you consult with a Texas lawyer before you take any action.

You mentioned you were never given notice of the lawsuit, and as a consequence lost by default. Consult with a lawyer about the idea of filing a motion to vacate the judgment based on an ineffective service of process.

Regarding the California judgment, those have a 10-year lifespan in California, but can be renewed an additional 10 years. You mentioned the judgment was issued 9 years ago. If the judgment-creditor sits on its rights and does not renew the judgment, it will expire in a year or so.

One option for the judgment-creditor is domesticating the judgment in Texas, which Texas allows. Once domesticated, the judgment has a 10-year life in Texas. It is possible for an aggressive judgment-creditor to pursue you for this debt for another decade.

One option is to negotiate a settlement. It's likely the collection agent bought the judgment for pennies on the dollar, so you can be really sharp in your terms when negotiating a settlement. Involve a lawyer with your negotiations to make sure the judgment-creditor's offer is a final settlement of the judgment.
T. M.
Austin, TX  |  February 22, 2014
My husband has significant federal student loan debt ($390,000 before any additional interest accruals). We've always resided in Texas, but were married in Las Vegas. Currently, he is preparing to complete the process for loan consolidation through Direct Loans (from Nelnet. I am not a co-signor on any of the debt, nor do I plan to be a co-signor on the consolidated debt. It's my understanding that, given that we reside in a community property state, I can still be liable for this debt (upon his default and/or death). Note that there will, very likely, be no estate, if he were die because we don't really have anything except a small home, our cars and a few personal belongings. My question is regarding what exactly are the Texas "exceptions" for the surviving spouse being responsible for student loan debt (upon default, more particularly death, given that my husband is up in age and not in the best of health). In any case, I've searched the internet for some time and have not be able to locate the "list of exceptions" in Texas, relative to cancellation of debt when the borrowing spouse becomes deceased or in default? Another question....I believe I correctly understand that in the event of debt forgiveness or debt cancellation any cancellation of debt income accruing to the borrowing spouse, the non-borrowing spouse can shield him or herself from being personally responsible for the tax liability on such debt cancelation by just filing married filing separately. Correct?
February 26, 2014
Consult with a Texas lawyer who has estate planning experience. In your husband's case, he has a large debt and should he die in the near future, his heirs may have some liability for some of his debts.

You mentioned a Direct Loan consolidation, which leaves a clue all or part of the $390,000 student loan debt is federal. The good news for federal loans is most are discharged when the borrower dies.

The story is more complicated for most private and some state student loans. It is likely any private student loans need to flow through the probate process. If you are a co-signer on any private student loans, it is likely you would still have liability for the debt upon the other co-signer's death. You mentioned residing in Texas, which is community property state. I have seen arguments that surviving spouses in CP states have liability for private student loans, but I do not know how Texas high courts have answered that question.

Regarding your tax questions, these are best answered by a wills, trusts, and estate planning lawyer who can analyze the facts in your case. Regardless of your spouse's health or amount of debt, it is usually a good idea for couples to create an estate plan to avoid estate taxes, and clarify the ownership of their real property.
Marsha G.
Austin, TX  |  January 16, 2014
I have a judgment against the Austin Police Department for the illegal towing of my vehicle. The judgment was issued by JP, Precinct 3, Travis County. I have called many departments with the City of Austin, but no-one can tell me how to collect on this judgment. Help?
January 17, 2014
If the size of the debt you're trying to collect is not large enough to merit hiring a lawyer experienced in debt collection, then here are two suggestions:
  1. Contact City Manager Marc Ott. You can email him using this form or phone his office at 512-974-2200.
  2. Contact the City of Austin's Social Media pages. Making it a public issue may help you get an answer. You can Tweet them or comment on their Facebook page.
Bill S.
Katy, TX  |  December 31, 2013
I always lived in Texas. Had file bankruptcy however could not get original account number from discover and used the debt collection account number. It's been ten years since I sent a payment, eight years since my bankruptcy was finalized. I am now receiving a letter from attorney collector who stated they have just been obtained by discover to collect 32k and are threatening lawsuit etc... shouldn't the SOL been way over now? I spoke to my bankruptcy attorney and he stated don't worry wait for it to go a way. Do I need to worry?
January 02, 2014
I agree with your lawyer that you should not worry.
Chris F.
Cedar Park, TX  |  November 23, 2013
I'm in Texas. I was not notified, but a lien showed up on my credit report and adversely affected my credit. After fighting, the lien was proven to be improper and lifted. I think I understand you to say liens have 4 year SOL. My questions are around when it or when I can request it removed from affecting my credit reports. 1) Since it was improper, should I be able to have it removed immediately, since it never should've existed? 2) Should it start from the point it was entered by the creditor? 3) Should it start from the point it was lifted? THanks!
November 25, 2013
The rules for what can appear on your credit report are found in the Fair Credit Reporting Act (FCRA), a federal law. The rules for liens are found in your state's civil procedure rules. The two sets of rules are separate, which can be confusing, but you have to look at them as distinct.
  1. If the report of the lien was the result of an error, then file a dispute with each consumer credit reporting agency that publishes the false information.
  2. Based on the information you shared, the lien should not appear anywhere in any form on your credit reports.
  3. Again, if your state court said, in effect, "Whoops, we never should have issued this lien," then it should not exist on your reports.

Remember, three consumer credit reporting agencies publish information about consumers. Check all three, and you may need to file three disputes.

Paul L.
La Marque, TX  |  November 13, 2013
I had a car accident on Feb 18, 2013 in Texas. Unfortunately, I was driving uninsured for less than 40 hours. In April, a debt collection agency from Mabank, TX sent me a letter that I owed more than $10,000 to a company called Southwestern Inc, or something like that. They stated if I do not meet the financial obligations, they will garnish my wages, my bank account, suspend my license, and a judgment against me. While it sounded fishy to me they are able to suspend and garnish, I wrote them a letter of dispute telling them I had no idea who was Southwestern. They responded back with the information regarding the accident I had a few months back. Because the garnishing wages and license suspension threats sounded fishy, I looked up in the State Attorney General Greg Abbott Web site and found an article that the debt collector CANNOT suspend my license nor garnish my wages, even if it is legitimate. (I am a full-time college student and live with my parents and have no job b/c it requires me to be fully attentive to my studies.) The only way to do that is through court-ordered child support debt. They recently sent a letter to the Motor Vehicle Safety Division telling them to suspend my license. I am now in a dilemma whether to file a complaint against them and respond with a letter by telling them that I filed a complaint against them. What should I do if the debt collector commits unfair acts?
November 14, 2013
The collection agent made a series of inaccurate and possibly accurate claims. Your first and most important task is to learn what liability you face as a result of the accident.

As you mentioned, a judgment-creditor may not garnish the wages of a Texas resident. However, a Texan's wages can be garnished for delinquent child support, taxes, and student loans. See the article above for citations to the Texas statutes on wage garnishment. A judgment-creditor will not be permitted to garnish your wages, but it can levy your bank account. Again, see above for details.

The Texas driver's license suspension rules are a bit more complex. It is possible for the Texas Dept. of Public Safety (the state agency responsible for licensing drivers) to suspend your license if you received two Failure to Maintain Financial Responsibility citations (Texas Transportation Code Title 7, Subtitle D ยง601.191 et seq). Did a law enforcement officer issue a no-insurance ticket to you? If so, was this your second no-insurance citation in Texas?

In Texas, you can have your driver's license suspended if there is an unpaid judgment against you relating to debt that resulted in
LaShanda M.
Meadows Place, TX  |  July 01, 2013
I received a letter from my bank of America stating that the state tax franchise board (CA) was planning on taking money out of my account for taxes that they say I owed for 2008. I have lived in Texas now for almost 2 years. I have called them and stated that I was not working in 2008, but the guy on the phone just kept saying I owe and that I could not file for the taxes I just had to pay up. They took $3.00 from my account about a year ago and have not attempted to take any money out until recently. I am not sure as to what I should do in this case. The letter stated the next garnishment will be for $9.00 on the 3rd of July 2013. Can you shed some light?
July 01, 2013
It sounds like the California Franchise Tax Board (CAFTB) filed a tax return for you. If that is the case, then you do have the right to replace the return they prepared (which shows some balance owing) with one you prepare. It would make sense to do so, if you would not owe. Not working, however, is not a guarantee that you don't owe taxes. Unemployment income, for instance, is taxable income. I think you should call the CAFTB again and ask if a "Substitute for Return" or "SFR" was filed for you for 2008.
A B.
Heathridge, TX  |  June 09, 2013
I am asking for a senior citizen who is on disability; no other income. Unable to pay credit card (Care Credit) now they have sued and she has a court date. Debt is $2400. Today received notice from ANOTHER collection agency saying they would settle this debt for $900, but she still has no way of paying this, nor does she have the funds to hire a lawyer. I am trying to help her navigate but unsure how to proceed. She only owns a car and needs this for transportation. Can they take her car and disability payments? Should she try to negotiate even though she doesn't have the money to pay? Thank you for your advice.
June 09, 2013
The best assistance you can give your friend is to call the bar association in the county where she lives. Ask for the names of the groups in her county that provide no-cost legal advice for people who have low or no income. Make an appointment with one of the groups and help your friend by making sure she attends her meeting. Remind her to bring all of the documents she has regarding all of her delinquent debts to her meeting. The lawyer your friend meets will help her several ways:
  • Write a draft answer to the summons and complaint you mentioned
  • Send a letter to the second collection agent explaining your friend's financial situation

The lawyer will also explain your friend's legal rights and liabilities in the state in which she resides.

You asked about whether your friend's car and personal belongings are at risk. Each state has a list of exemptions. Again, a lawyer in your friend's state can explain these exemptions.

Jennie W.
Haltom City, TX  |  May 17, 2013
My daughter has been receiving a debt collection since she was 16 years old from a phone bill in 1998 (she was 6 years old in 1998). Obviously the debt is not hers, and we suspect it was her biological father who fraudulently obtained a phone in her name/SSN, although the address that we lived at in Dallas was correct (He did not live with us - and we were in the process of a divorce). At the time we received the first collection letter, we checked her credit report and found of course that the debt was not on her credit report (it was a ten year old debt at that point). At that time, after consulting a credit expert, we determined that we would let the matter drop. We have since received letters on this collection every 6-8 months over the course of the past 5 years. We advised our daughter each time, and reminded her NOT to contact these people and to NOT pay them any money. Today she (now age 21) got the mail from the box and there was another letter and I guess she snapped. She called them (ugh) - they tried to get her to set up a payment plan, thank goodness she did not agree to it. She told them that she was 6 years old at the time this debt was incurred and that it was not her debt. She adamantly told them she would not now nor ever be paying this debt. They said they would file a dispute and send it up the chain. My concerns are many including:now she was has contacted them, will it go back on her credit report? I thought that disputes must be initiated by the person to whom the debt is being applied - so how is that THEY (the collection agency) can file one? BTW- contacting deadbeat ex-father is not possible - we don't know where he is, he will never admit to it anyway, and he has never paid a debt in his life. What do we do from here? I am trying to protect my daughter and her credit /scorereport.
May 20, 2013
The old debt should not reappear on her credit report. Of course, an unscrupulous collection agent could report it with a new, inaccurate date. I advise your daughter to get a free credit report every four months, from one of the credit bureaus, at www.AnnualCreditReport.com. If a creditor does report this account, she can dispute it with the credit bureau and have it removed.

I also suggest that your daughter send a cease communications letter to the creditor, if she receives any written communications from them, to stop the calls.
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