Debt and Small Claims in Texas

A consumer debt can go wrong in two different directions. In one, the collector crosses a line: the phone rings at all hours, a letter hints at arrest, the balance grows by fees no agreement ever mentioned. In the other, somebody has to sue, or gets sued, over an amount far too small to interest a litigation firm. Texas handles the first problem with conduct statutes and the second with a stripped-down court. The two guides in this section take one problem apiece, and this page sketches each body of law and the courtroom where the two run into each other.

Both guides keep the citation habit that defines our guides to Texas law: a sentence stating a rule of law carries a link to the enacted text or court rule behind it, so nothing on these pages has to be taken on trust.

What the law lets a collector do

Collection conduct in Texas answers to two statutes at once, and they divide up the cast of characters differently. On the state side sits Finance Code chapter 392, the Texas Debt Collection Act, whose definition of a debt collector is broad enough to catch nearly anyone pursuing a consumer debt, the original lender included. Its federal counterpart, the Fair Debt Collection Practices Act, aims at a narrower group. Under 15 U.S.C. 1692a(6) it covers those in the business of collecting debts owed to someone else, which puts a collection agency or a debt buyer under both laws at once and leaves a lender collecting its own accounts in its own name, in the general case, under the Texas one alone.

The prohibitions run on parallel tracks. On the Texas side, sections 392.301 through 392.304 organize the banned conduct into four lists: threats and coercion, harassment and abuse, unfair or unconscionable means, and misleading representations. The federal act carries similar lists, then adds paperwork the Texas chapter never demands: a written validation notice and the 30-day dispute window of 15 U.S.C. 1692g. The guide to your rights against debt collectors in Texas works through the whole architecture: which statute covers the person calling you, what each one forbids, the dispute letters each law honors, and what a violation costs the collector.

How ordinary-sized disputes get decided

The second guide is about a courtroom rather than a code of conduct. Civil cases of modest size belong to the justice court, where a justice of the peace hears them under a self-contained procedure, Rules 500 to 510, the justice court part of the state's civil procedure rules, drafted on the assumption that neither side will bring counsel. Rule 500.3 lets an individual appear without an attorney and lets a business appear through an owner, officer, or employee who is not one. The court's ceiling is set by statute: under Government Code section 27.031(a), its civil jurisdiction reaches matters with no more than $20,000 in controversy, exclusive of interest. Inside that ceiling sits most of what people actually fight about: an unpaid personal loan, a botched paint job, a deposit that never came back. The guide to small claims court in Texas follows a case from the petition through service, the answer, trial before the judge or a jury, and the appeal that starts the whole case over in county court.

The same courthouse, seen from both sides

These two subjects share a section because they share a building. A collection effort that ripens into a lawsuit small enough for the justice court's ceiling proceeds under the same rules the second guide describes, and the rulebook names the genre: Rule 500.1 defines a debt claim case by its professional plaintiffs, meaning suits filed by debt collectors and collection agencies, by financial institutions and lenders, and by assignees of claims. Those two guides therefore describe stages of a single possible timeline. What happens while the debt is still letters and phone calls shapes the file that exists if it becomes a docket number. A written dispute under 1692g obligates the collector to stop and obtain verification of the debt before collecting further, and the writing that exchange produces is precisely the kind of record a party needs in a courtroom where each side presents its own case. Which guide to read first depends on which end of the timeline has arrived: the conduct rules while the collecting is still happening, the court guide the moment a citation shows up, because the deadline to answer in justice court is measured in days rather than months.

Before a suit, and after a judgment

Two more questions bracket that timeline. Before any suit, there is the age of the debt: Civil Practice and Remedies Code section 16.004 sets a four-year limitations period for a suit on a debt, and the Finance Code adds rules for debt buyers who try to collect after it runs. The guide to the statute of limitations on debt covers when the clock matters, how it is raised, and how long a judgment itself stays enforceable.

After a judgment comes collection, and Texas protects more from a creditor than most states do. Current wages for personal service cannot be garnished for an ordinary consumer debt, a homestead is shielded within acreage limits, and a list of personal property is exempt up to a dollar ceiling. The guide to wage garnishment and exempt property explains those protections and the exceptions, such as child support, that reach a paycheck anyway.