Texas debt statute limitations: what to know for 2025

What to remember: In Texas, most debts have a four-year statute of limitations, which prevents creditors from suing you after that period. This is a legal protection that limits how long a creditor can use the courts against you. A key 2019 law also ensures that a partial payment or acknowledgment does not restart the clock—protecting you from “zombie debt.” Understanding these rules gives you leverage when dealing with old financial obligations. If you have more questions about Texas debt rules, contact us.

Are creditors pursuing you over an old debt? Feeling the stress of constant calls or letters? Understanding the Texas statute of limitations on debt is your strongest line of defense. It turns uncertainty into a clear legal advantage. In this guide, I’ll explain precisely how the four-year clock works, when it starts, and how it applies to common debts like credit cards or personal loans. You’ll also learn how recent laws protect you from the revival of old, expired debts—giving you the clarity you need to make informed decisions for your business.

As a business owner, you juggle constant financial responsibilities. But what happens when a year-old debt suddenly resurfaces? It’s a stressful and often confusing situation. In Texas, specific laws dictate when a creditor can legally sue you. This timeline is called the statute of limitations.

Time is a decisive factor in debt collection. Knowing the rules isn’t just a defensive strategy—it’s smart financial management. My role here is to break down the law clearly, without legal jargon, so you can protect yourself and your business.

1. What is the statute of limitations for debt in Texas?
2. What happens when the statute of limitations expires?
3. The end of “zombie debt”: how Texas law protects you
4. What about judgments? A different timeline
5. Your options when facing a time-barred debt
6. The four-year rule explained
7. The difference between time-barred debt and erased debt
8. Sued for a time-barred debt? Here’s your action plan
9. What about judgments and other debt types?
10. Your strategic options when facing a time-barred debt

What is the statute of limitations for debt in Texas?

In Texas, creditors generally have four years to file a lawsuit to collect a debt. This is the statute of limitations, outlined in the Texas Civil Practice & Remedies Code.

Think of this as a legal deadline. If a creditor doesn’t sue within this four-year window, they lose the ability to force payment through the courts. The countdown typically starts from the date you default—usually the first missed payment.

Important clarification: This four-year rule applies to most private consumer debts, such as credit cards, medical bills, and personal loans. It does NOT apply to federal debts, including federal student loans, taxes, and other government-backed obligations, which have their own timelines and rules.

What happens when the statute of limitations expires?

When the four years run out, the debt becomes time-barred. This doesn’t erase the debt—you still technically owe it—but the creditor cannot sue you to collect it.

This dramatically shifts the balance of power. Without the threat of a lawsuit, collectors have limited options. They may still request payment, but they cannot take you to court. In fact, federal regulations from the CFPB prohibit collectors from suing or even threatening to sue over a time-barred debt.

Key point for credit reporting: Even after the debt becomes time-barred, it can remain on your credit report for up to seven years from the date of your first missed payment. So, while you’re protected from lawsuits, the debt may still affect your credit score.

The end of “zombie debt”: how Texas law protects you

“Zombie debt” refers to old debts that collectors try to revive, often through small payments or acknowledgments from debtors. Before 2019, even a small payment or written acknowledgment could restart the four-year clock.

A 2019 change in the Texas Finance Code (Section 392.307) put an end to this practice, especially for debts purchased by debt buyers.

Key protections you should know

The law is clear for consumer debts:

• A payment on a time-barred debt does not restart the statute of limitations.
• A written or oral acknowledgment does not restart the clock.
• Any other activity does not revive the creditor’s right to sue.

Debt buyers are explicitly prohibited from suing on time-barred debt and must notify you in writing if the debt is too old to lead to a lawsuit.

What about judgments? A different timeline

A debt and a judgment are different. If a creditor sues within the four years and wins, the court issues a judgment.

In Texas, judgments typically last 10 years, and creditors can renew them. If a judgment becomes “dormant,” creditors have two years to revive it. This creates a much longer timeline than the original debt.

Your options when facing a time-barred debt

If you’re contacted about a debt that’s over four years old, you have several strategies:

1. Do nothing and pay nothing.
   You cannot be sued for the debt. However, collectors may continue contacting you unless you send a written request to stop. The debt may also stay on your credit report for up to seven years from the first missed payment.
2. Negotiate a settlement.
   Since creditors cannot sue, they may accept a reduced settlement. Always get any agreement in writing before sending money.
3. Pay it in full.
   This may help if you want closure or to resolve credit issues. Again, request written proof that the debt is settled.

One essential rule: never ignore a lawsuit. If you are served—even for an old debt—you must respond to avoid a default judgment.

The four-year rule explained

Most consumer debts fall under the four-year statute of limitations (Texas Civil Practice and Remedies Code §16.004). If no lawsuit is filed within 4 years, the creditor permanently loses the right to sue.

Reminder: This does not mean the debt is erased. It remains legally owed, but the creditor cannot enforce it in court.

The difference between time-barred debt and erased debt

Once a debt is time-barred, the creditor cannot sue. But the debt itself still exists. It may still affect your credit and can still be requested voluntarily by collectors.

What they can and cannot do

• Cannot sue you
• Can request payment
• Can report the debt on your credit (within the 7-year reporting limit)

Sued for a time-barred debt? Here’s your action plan

If a creditor sues you for an old debt, you must take action immediately.

Rule #1: Never ignore a lawsuit

Failing to respond to court papers results in a default judgment, making the debt enforceable again.

Assert the statute of limitations as an affirmative defense

You must raise this defense in your Answer. Courts do not do it automatically.

Know your deadlines

Missing the deadline can cost you your legal protection.

What about judgments and other debt types?

Not all debts are subject to the four-year rule.

Debts are usually under the four-year statute

• Credit cards
• Medical bills
• Personal loans (written contracts)

Debts with different rules

• Federal student loans
• Taxes
• Certain government-backed obligations

Understanding these distinctions helps avoid unpleasant surprises.

Your strategic options when facing a time-barred debt

Knowing the statute of limitations gives you control.

• Pay nothing if you simply want to avoid further legal risk.
• Settle if your goal is to improve your credit profile.
• Pay in full to achieve total closure.

Use caution during negotiations to avoid inadvertently creating new obligations.