Often, the primary reason clients consider bankruptcy is their credit card debt. With interest rates nearing 30%, it can feel as if you will never see an end to your credit card debt. Typically you have been paying on these cards for years before considering filing a bankruptcy; and finally it just comes down to paying the minimum payments or putting food on your table.
We can walk you through your debt resolution options to see if a Chapter 7, Chapter 13, or debt settlement is rich for you. Credit card companies can become harassing in their attempts to collect against you, threatening you with garnishments and even jail. Bankruptcy can also stop garnishments of wages and prevent future lawsuits and collection attempts by these credit card companies.
What you need to know about Credit Card Debt in Texas.
In Texas, the statute of limitations for credit card debts is four years. This time limit begins on the date that the last payment was made toward a debt. This means that if four years have passed since a debtor made any payments toward the balance on their credit card, the creditor can no longer sue them to seek repayment.
In 2019, Texas also passed a law that was meant to help prevent “zombie debts.” Prior to the passage of this law, some creditors or debt collection agencies had been able to take actions that would restart the statute of limitations on a debt that was owed. By contacting people and asking them to affirm a debt or make a payment, this would allow them to continue to attempt to collect debts even after four years had passed. However, with the passage of the new law, debtors have more protections against creditors attempting to collect debts after the statute of limitations has passed.
When the statute of limitations expires, creditors can no longer legally pursue collection action against a debtor. That is, a creditor cannot initiate a new lawsuit to attempt to collect the amount owed. However, if a creditor had filed a lawsuit within four years after the last payment was made on a debt, they will still be able to attempt to receive a judgment allowing them to collect the debt.
It is also important to understand that even if a creditor cannot take legal action to collect a debt, the debt will still exist. Unpaid debts will remain on a person’s credit report, and a creditor may continue to contact the debtor and attempt to collect the debt. However, since the creditor will be barred from filing a lawsuit, they will not be able to enforce the debt by freezing the debtor’s bank accounts, garnishing their wages, or placing a lien against their property.
The process is easy. Contact us today to get a consultation and schedule an appointment to come into our office. You can also email or upload your documents to our secure client portal.
