Texas Debt Collection Act: Your Rights Under Texas Debt Collection Law

Collin, Dallas, Denton, Grayson And Surrounding Areas

 

What the Texas Finance Code Prohibits—and How Chapter 392 Can Affect Debt Collection and Debt Lawsuits

The Texas Debt Collection Act, commonly called the TDCA, is one of the most important state laws governing consumer debt collection in Texas. It regulates how consumer debts may be collected and prohibits specified threats, coercion, harassment, unfair practices, and fraudulent or misleading representations.

The TDCA is found in Chapter 392 of the Texas Finance Code. It overlaps with the federal Fair Debt Collection Practices Act, but the two laws are not identical. One of the most important differences is that Texas law uses its own definitions and can apply to collection conduct beyond the narrower group of third-party debt collectors ordinarily covered by the federal FDCPA.

That distinction matters when the company collecting the debt is the original creditor, a debt buyer, a collection agency, a loan servicer, or a collection law firm.

Ridgely Davis Law represents consumers throughout North Texas and Texas in disputes involving the Texas Debt Collection Act, the FDCPA, debt collectors, creditor collection efforts, and the defense of Texas debt lawsuits.

Owing a debt does not give a creditor or collector permission to use collection methods prohibited by Texas law. The validity of the debt and the legality of the collection conduct are separate questions.

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What Is the Texas Debt Collection Act?

The Texas Debt Collection Act is Texas Finance Code Chapter 392, titled “Debt Collection.”

Chapter 392 contains provisions governing:

• Definitions of consumer debt and debt collection;
• Third-party debt collector bonding;
• Correction of certain disputed collection information;
• Threats and coercion;
• Harassment and abuse;
• Unfair or unconscionable collection methods;
• Fraudulent, deceptive, and misleading representations;
• Collection of certain time-barred debt by debt buyers;
• Identity-theft-related collection;
• Civil remedies;
• Attorney’s fees;
• Injunctive relief;
• Criminal penalties for specified violations; and
• Interaction with the Texas Deceptive Trade Practices Act.

The official statute is available through the Texas Finance Code Chapter 392.

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What Is a “Consumer Debt” Under Texas Law?

Texas Finance Code Section 392.001 defines “consumer debt” as an obligation—or alleged obligation—primarily for personal, family, or household purposes arising from a transaction or alleged transaction.

Examples can include:

• Credit card debt;
• Medical debt;
• Personal loans;
• Apartment debt;
• Retail credit;
• Consumer auto debt;
• Private student loans used for personal educational purposes;
• Utility debt;
• Certain HOA obligations; and
• Other personal, family, or household debts.

Purely commercial or business obligations may fall outside the statutory definition of “consumer debt,” so a business debt or personal guarantee should be analyzed separately.

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Who Is a “Debt Collector” Under the TDCA?

The Texas definition differs from the federal FDCPA definition.

Section 392.001 generally defines “debt collector” as a person who directly or indirectly engages in debt collection.

That can potentially include:

• Original creditors;
• Third-party collection agencies;
• Debt buyers;
• Loan servicers;
• Collection law firms;
• Other persons engaged in collecting consumer debts; and
• Persons falling within other portions of the statutory definition.

This broader Texas framework is one reason a consumer should not assume that an original creditor is free from debt-collection restrictions merely because the federal FDCPA may not apply.

See Debt Collectors in Texas.

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Threats and Coercion — Texas Finance Code § 392.301

Section 392.301 prohibits specified threats and coercive collection methods.

Depending on the circumstances, prohibited conduct can include threats involving:

• Violence or other criminal means;
• False accusations of fraud or another crime;
• Arrest or criminal consequences for ordinary civil nonpayment when not legally available;
• Actions prohibited by law;
• Actions the collector does not actually intend to take;
• Seizure or repossession that is not legally authorized; and
• Other coercive conduct identified in the statute.

A creditor is allowed to explain lawful remedies. For example, a creditor that genuinely intends to file a lawsuit may ordinarily say that litigation is being considered.

The problem arises when the collector threatens a remedy that is legally unavailable, materially exaggerates what the law permits, or claims that action will occur when the collector does not actually intend to take it.

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Can a Debt Collector Threaten to Have Me Arrested?

Ordinary failure to pay a consumer debt is generally a civil matter. A consumer is not ordinarily arrested simply because a credit card bill, medical bill, personal loan, or other civil debt was not paid.

A collector that falsely represents that nonpayment will result in arrest, criminal prosecution, or imprisonment may violate Texas debt collection law and potentially federal law when the FDCPA applies.

See Can I Be Arrested for Credit Card Debt?.

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Harassment and Abuse — Texas Finance Code § 392.302

Section 392.302 prohibits specified harassment and abuse in debt collection.

Potentially prohibited conduct can include:

• Using profane or obscene language;
• Using language intended to abuse unreasonably;
• Placing telephone calls without meaningful disclosure of the caller’s identity, subject to applicable law;
• Causing a person to incur unreasonable telephone charges;
• Repeatedly or continuously calling with an intent to harass; and
• Other conduct specifically prohibited by the statute.

Texas law does not prohibit every repeated collection call. The circumstances, purpose, frequency, and content matter.

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Unfair or Unconscionable Collection — Texas Finance Code § 392.303

Section 392.303 prohibits specified unfair or unconscionable means of collecting or attempting to collect a consumer debt.

One of its most important protections concerns amounts added to the debt.

A collector generally may not collect or attempt to collect interest, fees, charges, or expenses incidental to the obligation unless the amount is:

• Expressly authorized by the agreement creating the obligation; or
• Otherwise legally chargeable to the consumer.

This can be important when a collection balance includes:

• Collection fees;
• Attorney’s fees;
• Late fees;
• Convenience fees;
• Default interest;
• Returned-payment charges;
• Repossession expenses;
• Property-related charges; or
• Other additions to principal.

See Payment as a Defense and Judgment Interest.

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Fraudulent, Deceptive, or Misleading Representations — § 392.304

Section 392.304 contains a detailed list of prohibited misrepresentations and is one of the most frequently litigated portions of the TDCA.

Potential issues can include false or misleading representations concerning:

• The character of the debt;
• The amount of the debt;
• The extent of the debt;
• The collector’s identity;
• Whether the collector is an attorney;
• The nature of a document;
• The status of a lawsuit;
• The existence of a judgment;
• The legal consequences of nonpayment;
• Fees, interest, or other charges;
• The creditor’s legal rights; or
• Other material information used to collect the debt.

Section 392.304 also contains a broader prohibition against using another fraudulent, deceptive, or misleading representation that employs specified means to collect a consumer debt.

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Misrepresenting the Amount of the Debt

A collector should be able to explain how the balance was calculated.

Potential disputes include:

• Payments not credited;
• Unauthorized interest;
• Incorrect late fees;
• Duplicate charges;
• Uncredited settlement payments;
• Repossession proceeds omitted from a deficiency calculation;
• Incorrect post-judgment interest;
• Charges belonging to another person; and
• Amounts unsupported by the governing contract.

A disputed balance does not automatically establish a TDCA violation. The issue is whether the collector made a representation prohibited by the statute and whether the required elements of a claim can be proved.

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Misrepresenting Legal Remedies

Collectors should not materially overstate what a creditor can do under Texas law.

Examples that may require scrutiny include claims that an ordinary private creditor can automatically:

• Garnish current Texas wages;
• Seize a protected Texas homestead;
• Take exempt personal property;
• Freeze a bank account before obtaining required legal process;
• Have the debtor arrested;
• Automatically take an LLC’s assets for an owner’s personal debt; or
• Exercise another legal remedy that is not actually available.

See Can They Garnish My Wages in Texas? and Exempt Property in Texas.

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Third-Party Debt Collector Bond Requirement — § 392.101

Texas Finance Code Section 392.101 generally requires a third-party debt collector or credit bureau to obtain a surety bond before engaging in debt collection in Texas.

The statutory bond amount is $10,000, and a copy is generally filed with the Texas Secretary of State.

The bond requirement is separate from whether the underlying debt is valid. But it can be relevant when evaluating whether a third-party collector is complying with Texas law.

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Correction of Certain Collection Files — § 392.202

Section 392.202 provides a Texas procedure for disputing the accuracy of an item contained in a third-party debt collector’s or credit bureau’s file concerning a consumer.

When the statutory requirements apply, the third-party debt collector or credit bureau must investigate the dispute and take specified action concerning inaccurate information.

This is different from federal FDCPA validation rights and different again from Fair Credit Reporting Act disputes with a consumer reporting agency.

The correct dispute process depends on what information is wrong and who maintains or reports it.

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Debt Buyers and Time-Barred Debt — § 392.307

Texas gives consumers additional protection when a statutory debt buyer attempts to collect certain debts after limitations has expired.

Section 392.307 provides that a debt buyer may not directly or indirectly commence an action or initiate arbitration to collect consumer debt after expiration of the applicable limitations period identified by the statute.

Importantly, the statute also provides that once the action is barred, the cause of action is not revived by:

• A payment;
• An oral reaffirmation;
• A written reaffirmation; or
• Other activity on the consumer debt.

This is a particularly important Texas protection because generic national advice sometimes tells consumers that any payment automatically “restarts the clock.” That is not an accurate description of Section 392.307 for covered debt-buyer claims.

See Texas Statute of Limitations on Debt Lawsuits.

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Required Disclosures on Time-Barred Debt

Section 392.307 also requires specified disclosures in the initial written communication when a debt buyer is collecting consumer debt for which a collection action is barred by limitations.

The required wording differs depending on whether the debt may still legally be reported to consumer reporting agencies and whether the debt buyer actually furnishes information about the debt.

A consumer receiving a collection letter on an old debt should preserve the letter and envelope.

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Identity Theft — § 392.308

Texas Finance Code Section 392.308 provides specific protections for qualifying consumer debts resulting from identity theft after a creditor or collector receives a qualifying identity-theft court order under Texas Business & Commerce Code Chapter 521.

The statute can require cessation of collection and corrective action in qualifying circumstances.

Section 392.308 contains important exclusions and procedural requirements, so it should be applied to the actual facts rather than described as an automatic identity-theft defense to every collection matter.

See Identity Theft as a Defense to a Debt Lawsuit.

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Can the Original Creditor Be Liable Under the TDCA?

Potentially, yes.

This is one of the important distinctions between Texas law and the federal FDCPA. The Texas statutory definition of debt collector can encompass collection activity by persons that may not qualify as federal “debt collectors.”

Whether a particular creditor falls within a specific TDCA prohibition should still be analyzed from the statutory language and facts.

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Can a Collection Law Firm Violate the TDCA?

Potentially.

Debt collection performed through litigation is not categorically exempt from Texas collection law.

Issues can arise from:

• Demand letters;
• Settlement communications;
• Pleadings;
• Affidavits;
• Representations concerning balances;
• Representations concerning legal remedies;
• Post-judgment demands; and
• Other collection conduct.

At the same time, an unsuccessful legal argument or disputed lawsuit allegation does not automatically become a TDCA violation. The specific statutory prohibition and facts still matter.

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Using an Independent Debt Collector Known to Violate the Law

Texas Finance Code Section 392.306 provides that a creditor may not use an independent debt collector when the creditor has actual knowledge that the collector repeatedly or continuously engages in acts or practices prohibited by Chapter 392.

This can become relevant when misconduct is not an isolated event but part of a known collection practice.

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Civil Remedies Under § 392.403

Texas Finance Code Section 392.403 provides private civil remedies for violations of Chapter 392.

A qualifying plaintiff may seek:

• Injunctive relief to prevent or restrain a violation;
• Actual damages caused by a violation;
• Costs; and
• Reasonable attorney’s fees when the action is successfully maintained.

The statute also provides a minimum recovery of not less than $100 for each violation successfully established under specified sections, including Sections 392.101, 392.202, and 392.301(a)(3).

Section 392.403 also permits an award of attorney’s fees to a defendant when the court finds that a TDCA action was brought in bad faith or for purposes of harassment.

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Texas Deceptive Trade Practices Act — § 392.404

Section 392.404 expressly provides that a violation of Chapter 392 is a deceptive trade practice under Subchapter E of Chapter 17 of the Texas Business & Commerce Code and is actionable under that subchapter.

This can create important overlap between the TDCA and the Texas Deceptive Trade Practices–Consumer Protection Act.

The existence and measure of particular DTPA remedies can depend on the specific claim, statutory prerequisites, damages proof, and procedural posture.

See Texas Consumer Protections.

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Does a TDCA Violation Erase the Debt?

Usually not automatically.

There may be two different disputes:

1. The debt case: Does the plaintiff own and prove the debt, and what amount is legally due?
2. The collection-conduct case: Did the creditor or collector violate Chapter 392 while attempting to collect it?

A consumer can owe money and still have a valid collection-law claim. Conversely, a consumer can have a strong defense to the debt without proving a TDCA violation.

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Can TDCA Claims Be Raised in a Debt Lawsuit?

Potentially, depending on jurisdiction, pleading, compulsory-counterclaim rules, limitations, facts, and strategic considerations.

Possible approaches include:

• Affirmative defenses;
• Counterclaims;
• Separate litigation;
• Declaratory or injunctive relief where legally available; and
• Settlement leverage.

The procedural strategy should be selected deliberately rather than adding consumer-law counterclaims to every debt case automatically.

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Preserve the Collection Evidence

A TDCA claim is stronger when the exact representation or conduct can be proved.

Preserve:

• Collection letters;
• Envelopes;
• Emails;
• Text messages;
• Voicemails;
• Call logs;
• Account statements;
• Settlement offers;
• Payment demands;
• Online account screenshots;
• Credit reports;
• Court pleadings;
• Affidavits;
• Garnishment or execution papers;
• Notes identifying dates and callers; and
• Any written dispute sent to the creditor or collector.

Do not rely only on memory when written or electronic evidence can establish exactly what was said.

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TDCA Versus FDCPA

The statutes overlap but should be analyzed separately.

Issue	Texas Debt Collection Act	FDCPA
Primary Law	Texas Finance Code Chapter 392	15 U.S.C. §§ 1692–1692p
Debt Type	Consumer debt as defined by Texas law	Primarily personal, family, or household debt
Collector Coverage	Texas definition can be broader	Applies to statutory federal “debt collectors”
Original Creditors	Can potentially fall within Texas coverage	Often outside the federal definition when collecting their own debt
Prohibited Conduct	Threats, harassment, unfair methods, deceptive representations	Harassment, false representations, unfair practices, communication restrictions
Special Texas Rules	Bonding, time-barred debt buyer rules, identity-theft provisions	Validation notice, federal communication rules, federal venue rules

See Fair Debt Collection Practices Act.

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Common TDCA Issues We Look For

In a Texas debt case, our review may ask:

• Was the amount of the debt represented accurately?
• Were unauthorized fees added?
• Was a legal remedy misrepresented?
• Did the collector falsely threaten arrest?
• Were calls abusive or harassing?
• Was the creditor misidentified?
• Did a debt buyer sue after limitations expired?
• Did a time-barred debt letter contain the required Texas disclosure?
• Was identity-theft documentation ignored?
• Did a third-party collector satisfy applicable bonding requirements?
• Were false representations made in collection documents?
• Did the creditor use a collector it actually knew repeatedly violated Chapter 392?
• What actual damages resulted?
• Does the FDCPA also apply?
• Does DTPA relief need to be analyzed?

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How Ridgely Davis Law Approaches Texas Debt Collection Act Claims

We do not treat every rude collection call as a lawsuit, and we do not treat every disputed balance as fraud.

We identify:

• The exact collector;
• The exact consumer debt;
• The exact communication or collection act;
• The subsection of Chapter 392 implicated;
• The evidence proving the conduct;
• The damages caused by it;
• Whether federal law also applies;
• Whether the claim belongs as a counterclaim or separate action;
• Whether the underlying debt remains defensible; and
• How the collection-law issue changes settlement leverage.

A strong TDCA claim is specific. It connects a provable collection act to a specific statutory prohibition and a legally available remedy.

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1. What is the Texas Debt Collection Act?

It is Texas Finance Code Chapter 392, the state statute regulating collection of consumer debt. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

2. Does the TDCA apply to original creditors?

Potentially. Texas uses a broader statutory definition than the federal FDCPA, so original-creditor conduct can fall within Texas collection law depending on the facts. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

3. Does the TDCA apply to debt buyers?

Yes. Chapter 392 specifically regulates debt buyers in several provisions, including Section 392.307. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

4. Does it apply to business debt?

The chapter principally concerns “consumer debt,” defined as obligations primarily for personal, family, or household purposes. Pure commercial debt requires separate analysis. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

5. Can a collector threaten to sue me?

A truthful statement about lawful litigation the collector actually intends to pursue is different from a false or deceptive threat. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

6. Can a collector threaten arrest?

False threats of arrest or criminal consequences for ordinary civil nonpayment can violate Texas law. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

7. Can debt collectors repeatedly call me?

Collectors may communicate about a debt, but repeated or continuous calls intended to harass can violate Section 392.302. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

8. Can a collector use profanity?

Section 392.302 prohibits specified abusive or profane collection conduct. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

9. Can a creditor add collection fees?

Section 392.303 generally prohibits collection of incidental charges unless authorized by the agreement or otherwise legally chargeable. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

10. Can a collector misrepresent how much I owe?

Misrepresentations concerning the character, extent, or amount of consumer debt can implicate Section 392.304. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

11. Can a collector say it can garnish my Texas wages?

Ordinary private creditors generally cannot garnish current Texas wages, subject to important statutory exceptions. A misleading statement about available remedies may require TDCA analysis. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

12. Do third-party collectors need a Texas bond?

Section 392.101 generally requires qualifying third-party debt collectors and credit bureaus to maintain a $10,000 surety bond. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

13. Can a debt buyer sue after limitations expires?

Section 392.307 prohibits a statutory debt buyer from commencing an action or initiating arbitration to collect qualifying consumer debt after expiration of the applicable limitations period identified by the statute. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

14. Does making a payment restart a time-barred debt-buyer claim?

Section 392.307 provides that a covered cause of action barred by that section is not revived by payment, reaffirmation, or other activity on the debt. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

15. Does Texas require a disclosure on time-barred debt?

Yes. Section 392.307 requires specified conspicuous disclosures in the initial written communication in covered debt-buyer collection. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

16. What protections exist for identity theft?

Section 392.308 provides specific collection protections in qualifying identity-theft cases after receipt of a qualifying Texas identity-theft court order. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

17. Can I sue for a TDCA violation?

Section 392.403 provides private civil remedies including injunctive relief and actual damages in qualifying cases. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

18. Can I recover attorney’s fees?

A person who successfully maintains an action under Section 392.403 is entitled to qualifying reasonable attorney’s fees and costs under the statute. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

19. Is a TDCA violation also a DTPA violation?

Section 392.404 expressly provides that a Chapter 392 violation is a deceptive trade practice actionable under the referenced DTPA subchapter, although the specific remedies should be analyzed from the facts and applicable law. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

 

20. When should I contact Ridgely Davis Law?

When a collector has threatened you, misstated the debt or legal remedies, pursued time-barred debt, ignored identity-theft evidence, added questionable charges, or filed a debt lawsuit that also involves collection-law issues. The Texas Debt Collection Act can apply differently from the federal FDCPA because Texas uses its own definitions and statutory prohibitions. Potential claims should be tied to the specific conduct at issue, such as threats, harassment, unauthorized charges, deceptive representations, or unlawful collection methods, rather than treated as a general defense to every debt.

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Continue Your Research

• Texas Consumer Protections
• Fair Debt Collection Practices Act
• Debt Collectors in Texas
• Creditor Collection Efforts
• Debt Buyer Lawsuits
• Texas Statute of Limitations
• Identity Theft Defense
• Texas Wage Garnishment
• Texas Exempt Property