Blog Summary: Texas debt collection laws under the TDCA (Finance Code 392) remain some of the strictest in the U.S., with rigid communication rules, a 4-year statute of limitations, and heavy TCPA enforcement. This blog explains everything collectors must follow, validation notices, call-time limits, third-party restrictions, and mandatory time-barred debt disclosures, while outlining rising litigation risk as CFPB and the Texas AG increase scrutiny. Small businesses, agencies, lenders, and medical providers will learn the essential compliance steps, prohibited actions, and how AI-driven automation reduces violation exposure. 

Table of Contents:

1. Why Texas Debt Collection Laws Matter

2. What Are the Texas Debt Collection Laws in 2026?

3. Texas Debt Collection Law Breakdown

4. TCPA Compliance Requirements for Texas Collectors (2026)

5. Key Consumer Rights in Texas

6. What Debt Collectors Cannot Do in Texas

7. Requirements for Debt Buyers in Texas (Finance Code §392.307) 

8. Texas Debt Collection Compliance Checklist (2026)

9. Key Takeaway: Why Compliance Requires Automation

10. FAQ 

Why Texas Debt Collection Laws Matter

Texas debt collection laws are central in 2026 as litigation surges, CFPB complaints nearly double, and regulators intensify enforcement statewide. Under the Texas Debt Collection Act (TDCA), the FDCPA, TCPA, and Texas’ strict 4-year statute of limitations, collectors operate in one of the most debtor-friendly legal environments in the country. A single misstep, an incorrect validation notice, a time-barred disclosure error, or a TCPA autodial violation, can trigger $1,000 in statutory damages or $500–$1,500 per unlawful call (Source). With no wage garnishment for consumer debt, mandatory disclosures, and tight communication rules, businesses face a compliance landscape where manual processes are no longer safe.

What Are the Texas Debt Collection Laws in 2026?

FDCPA (Federal). Governs third-party collectors. Bans harassment, false threats, misrepresentation, and improper disclosures. FDCPA Requires validation notices and allows consumers to demand all communication stop. Violations can result in $1,000 statutory damages plus attorney fees.

Texas Debt Collection Act (TDCA, Finance Code 392). Applies to first-party and third-party collectors. Prohibits harassment, misrepresentation, coercion, unauthorized fees, and deceptive practices. Enforces 8 a.m.–9 p.m. call windows and bans wage garnishment for consumer debt.

TCPA. Governs all phone, SMS, and prerecorded outreach. Requires express consent, real-time opt-out handling, and mandatory Do-Not-Call (DNC) compliance. Penalties reach $500–$1,500 per call/text.

Texas Civil Practice & Remedies Code §16.004. Imposes a 4-year statute of limitations on written contracts, credit cards, medical bills, and open accounts. After four years, debt becomes time-barred, collectors may request voluntary repayment but cannot sue.

Texas Finance Code §392.307 (Time-Barred Debt). Requires time-barred disclosures, prohibits any lawsuit threat, and prevents “resetting” the statute of limitations, even if a consumer makes a partial payment.

Texas Debt Collection Laws: Comparison Table 

Texas Debt Collection Law Breakdown 

Texas Debt Collection Act (TDCA)

Applies to all collectors and original creditors. Texas courts enforce aggressively.

Harassment Restrictions: No abusive language, coercion, or excessive calls. Texas follows CFPB’s standard of 7 calls per week per debt.

Misrepresentation Rules: No false threats of arrest, lawsuits, garnishment, or impersonation of attorneys or law enforcement.

Communication Limits: Calls allowed only 8 a.m.–9 p.m. No contacting consumers at inconvenient times or locations.

Written Notice Requirements: Must provide written validation details within 5 days of initial communication and send formal notice before legal action.

Third-Party Disclosure Rules: Collectors may confirm location information only, never disclose debt details to employers, neighbours, or family.

Cease-Communication Rights: Once a consumer requests communication to stop, collectors may only confirm cessation or notify about specific legal action.

FDCPA Requirements

Covers third-party collectors.

Validation Notice: Within 5 days: amount owed, creditor name, and 30-day dispute rights. Collections pause if disputed until verification is sent.

Workplace Contact: No workplace calls if prohibited by employer or consumer.

Unfair Practices: No unauthorized fees, post-dated check misuse, or false legal threats.

Mini-Miranda: Every communication must disclose: “This is an attempt to collect a debt…”

Time-Barred Debt (4-Year Rule)

Texas has one of the strictest limitation frameworks.

Four-Year Limit: Written contracts, credit cards, medical bills, and open accounts expire after 4 years; lawsuits are prohibited.

No Reset Rule: Partial payments or acknowledgments do NOT restart the clock.

Mandatory Disclosures: If pursuing voluntary payment, collectors must disclose that the debt is time-barred and cannot result in a lawsuit.

Debt Buyer Obligations: Must maintain chain-of-title documentation and avoid misleading settlement language.

TCPA Compliance Requirements for Texas Collectors (2026)

A. Consent Requirements

Collectors must obtain express written consent before placing autodialed or prerecorded calls or sending automated texts. Consent must be clear, specific to debt collection, and affirmatively given.

Compliant Example: “By providing my phone number, I consent to receive autodialed or prerecorded debt collection calls and text messages from [Company] regarding my account.”

Revocation: Consumers may revoke consent through any reasonable method, effective immediately.

B. National Do Not Call Registry

Collectors must:

• Scrub numbers against the National DNC every 31 days.

• Maintain proof of compliance.

• Use real-time API checks for outbound calls.

• Texas regulators routinely review DNC enforcement.

C. Prerecorded Voice Message Rules

All prerecorded messages must include:

• Required disclosures

• A clear opt-out mechanism

• Accurate caller ID

• Delivery is allowed only with prior express consent.

D. Penalties for Violations

E. Tools to Manage TCPA Compliance

Effective systems require:

• TCPA scrubbers

• AI call routing

• Consent lifecycle tracking

• Real-time DNC validation

• Audit-ready reporting

Note: FinanceOps automates all of this end-to-end with built-in DNC suppression, consent lifecycle tracking, immediate revocation enforcement, and audit-ready logs, cutting TCPA violation risk by up to 95% while enabling compliant customer outreach at scale.

Key Consumer Rights in Texas

• Validation Rights: Written notice required within 5 days of first contact. Collections must pause if disputed.

• Cease-Communication Rights: Must be honored immediately.

• Right to Sue: Consumers may sue collectors in any Texas county where they live or collect.

• Wage Garnishment Restrictions: Texas bans wage garnishment for consumer debt.

• Homestead Protection: Unlimited exemption for primary residences.

• Judgment Protections: Strict limits on bank levies and personal property exemptions.

Note: FinanceOps AI automates validation notices in real time, flags cease-communication requests instantly, and filters exempt assets to ensure fully TDCA-compliant Texas workflows.

What Debt Collectors Cannot Do in Texas

• Threaten arrest, jail, or criminal charges.

• Use harassment, profanity, coercion, or excessive call attempts.

• Publicly shame debtors (posting names, contacting employers, etc.).

• Misrepresent legal status, amount owed, or imply lawsuits that cannot occur.

• Contact consumers after a written stop-communication request.

• Sue or threaten lawsuits on time-barred debt (4-year SOL).

• Violate TCPA rules, autodialer use without consent, no DNC scrubbing, or illegal prerecorded messages.

Requirements for Debt Buyers in Texas (Finance Code §392.307)

• Maintain complete documentation

  • Chain of title

  • Account histories

  • Original creditor details

• Provide mandatory written notices within 30 days of acquiring the debt.

• Follow strict litigation restrictions

  • Lawsuits prohibited on time-barred debt.

  • No implication that legal action is possible.

• Use accurate verification procedures before any settlement outreach.

• Retain records proving ownership, statements, and communications.

Texas Debt Collection Compliance Checklist (2026)

• Track statute of limitations (4-year) and block time-barred lawsuits.

• Maintain complete documentation systems and ownership records.

• Log all consent for calls/SMS with time-stamped audit trails.

• Automate DNC scrubbing and revocation handling.

• Run TCPA scrubbing before any autodialer or SMS outreach.

• Maintain structured dispute workflows and pause collections on dispute.

• Keep audit-ready communication logs across all channels.

• Replace manual processes with rule-based automation to reduce violations.

Key Takeaway: Compliance Now Requires Automation

Texas debt collection laws in 2026 leave no margin for manual errors. Strict TDCA rules, aggressive TCPA enforcement, and the 4-year time-barred framework under §392.307 make violations expensive. FinanceOps AI embeds compliance directly into collector workflows through automated scrubbing, immutable consent logs, instant time-barred flags, auto-generated notices, centralized documentation, and AI-governed outreach. FinanceOps is the compliance-safe operating system for Texas collections, reducing legal exposure while improving recovery performance at scale.

Book a quick 30-minute demo to stay 100% compliant with TDCA rules and regulations, automatically and end-to-end.

FAQs

1. What is the law in Texas for debt collectors?

Texas debt collectors must follow TDCA, FDCPA, TCPA, and the 4-year statute of limitations. They cannot harass, misrepresent, threaten illegal actions, disclose debt details, or sue on expired debt. Violations trigger statutory damages, attorney fees, and enforcement by the Texas Attorney General or CFPB.

2. What is the 7-7-7 rule for collections?

The 7-7-7 rule limits collectors to 7 calls per debt per week, including attempts, and prohibits calling within 7 days after a conversation. Exceeding this is considered harassment under FDCPA/TDCA and can lead to penalties, consumer lawsuits, and regulatory complaints.

4. How long until a debt is no longer valid in Texas?

Most Texas debts become time-barred after 4 years. After this, collectors cannot sue or threaten legal action. Under §392.307, the clock cannot be restarted, partial payments, acknowledgments, or promises do not revive expired debt.

5. What are the TCPA calling rules in Texas?

Collectors need express consent for autodialed calls or texts, must scrub numbers against the National DNC list, honor opt-outs immediately, and use accurate caller ID. TCPA penalties are $500-$1,500 per call, and Texas courts enforce them aggressively.

6. Can collectors sue for time-barred debt in Texas?

No. Once the 4-year limitation expires, lawsuits and lawsuit threats are prohibited. Collectors must disclose in writing that the debt is time-barred and payment is voluntary. Debt buyers face strict documentation rules and AG/CFPB oversight for violations.