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How to Get Debt Relief in Texas

Sarah Edwards | October 19, 2022

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

SoloSuit is on its way to rescue you from debt

Summary: If you're struggling with debt in Texas, SoloSuit can help you find the relief you need.

Texas is among the most populous and economically diverse states. With a population of over 29 million and an economy larger than many countries, The Lone Star state is undoubtedly a force to be reckoned with.

However, not all is rosy in the state of Texas. Like many other states, it has been hit hard by the economic downturn. This has led to sharply increased levels of debt for plenty of Texans.

It's no wonder that many Texans are struggling to make ends meet. Luckily, there are multiple options available for those who need help getting out of debt. We will go through some of the most popular methods for getting debt relief in Texas.

Let's get started.

What's debt relief?

This is the process of reducing or eliminating debt. It can be done through various means, such as negotiating with creditors, consolidating debt, or filing for bankruptcy.

No matter what method you choose, debt relief aims to help you get out of debt and improve your financial situation.

What are the leading types of debt in Texas?

There are a few different types of debt that are common in Texas. These include:

  • Credit card debt: This is one of the common types of debt in the state. According to the FED, the average Texan has $6,139 in credit card debt.
  • Medical debt: Also a major problem in Texas, with over 26% of Texans having medical debt that they're struggling to pay off.
  • Student loan debt: The state ranks fourth in the nation for student loan debt, with an average balance of $30,549 per borrower, making student debt another significant problem in Texas.
  • Auto loan debt: Auto loan debt is a widespread issue in Texas. According to the Federal Reserve, the average Texan has $23,515 in auto loan debt.
  • Mortgage debt: This is the largest debt the average debt holder in Texas carries.

Each of these types of debt can be a major problem, but they are an even bigger issue when you combine them. This is why it's important to get debt relief if you're struggling with debt in Texas.

These are the most effective methods of debt relief

Now that we've looked at the most common types of debt in Texas, let's look at some of the most effective debt relief methods. These options may not work for everyone, but at least one of them should help you get the financial help you may be seeking.

Utilize these Texas debt relief programs

As a Texas resident, you should be proud to know that you may qualify for state-specific services that help Texans who are financially struggling. Check out these Texas debt relief programs to see if you are eligible:

  • Lone Star Card: Texas Electronic Benefit Transfer (EBT) system uses the Lone Star Card to provide access to Supplemental Nutrition Assistance Program (SNAP) food benefits and Temporary Assistance for Needy Families (TANF) cash benefits.
  • Temporary Assistance for Needy Families (TANF): Provides cash payments to help families pay for food, clothing, housing and other essentials.
  • Repatriation Program: Provides temporary assistance, in the form of a loan, to qualified U.S. citizens and their dependents. Recipients must be identified by the U.S. Department of State as having returned from a foreign country because of destitution, illness, war, invasion, or similar crisis, or are without resources.
  • Feeding Texas: This is the largest hunger-relief organization in Texas, involving a network of 21 member food banks that reaches over 5 million Texans annually with food and resources.
  • Supplemental Nutrition Assistance Program (SNAP): Helps people buy the food they need for good health. People also can buy garden seeds with SNAP benefits.
  • Private Student Loan Relief: Provides a network of financial counselors who link troubled families with trustworthy agencies for financial assistance with private student loans.

Debt consolidation can help you simplify your payments

Debt consolidation is taking multiple debts and combining them into one single payment. This can be done by taking out a debt consolidation loan or using a balance transfer credit card.


Pros and Cons of Debt Consolidation

Pros

Cons

It can reduce your interest rate

You may not be eligible if you have bad credit

It can make your debt more manageable

You may end up paying more in the long run

You have only one monthly payment



The goal here is to make your debt more manageable by reducing your interest rate and giving you one monthly payment to make.

Debt settlement can help you reduce the amount you owe

According to the Federal Trade Commission, debt settlement is negotiating with your creditors to agree on a reduced payoff amount.

This can be handled by you alone or with the help of a debt settlement company.


Pros and Cons of Debt Settlement

Pros

Cons

It may help you pay off your debt more quickly

You may not be eligible if you have bad credit

It can reduce the debt you owe

Creditors may not agree to a settlement

You don't have to worry about dealing with debt collectors if you hire a debt settlement company

The IRS considers the difference between the settlement amount and the original amount as taxable income



The goal of debt settlement is to get your creditors to agree to a lower payoff amount to pay off your debt quickly.

Debt management plans can help you feel in charge again

If you find it difficult to make your monthly debt payments, a debt management plan (DMP) may be ideal. A DMP is a repayment plan managed by a credit counseling agency.


Pros and Cons of Debt Management Plans

Pros

Cons

It can help you get out of debt

It may damage your credit score

You have one affordable monthly payment

It could be a lengthy process



The goal of a DMP is to help you get out of debt by reducing your interest rate and giving you one affordable monthly payment.

Debt counseling is a great, free option

If you're drowning in debt, you may want to consider debt counseling. Debt counseling is a process of working with a credit counselor to create a budget and develop financial skills.


Pros and Cons of Debt Counseling

Pros

Cons

It can help you get out of debt

It may be a lengthy process

It can improve your financial situation

There may be a fee



Debt counseling aims to help you get out of debt and improve your financial situation.

Bankruptcy can help as a last resort

When looking at bankruptcies, there are two main types that you can file: Chapter 13 and Chapter 7. Usually, bankruptcy is the last resort for debt relief. Let's break each type down in detail.

Chapter 13 enables you to reorganize your debt and create a repayment plan. This type of bankruptcy is suitable for those with a regular income who struggle with a large amount of debt.

On the other hand, Chapter 7 bankruptcy allows you to liquidate your assets to pay off your debt.


Pros and Cons of Chapter 7 Bankruptcy

Pros

Cons

It can help you get out of debt

It will damage your credit score

It can give you a fresh start

The process can be lengthy and complicated



This type of bankruptcy is recommended for those who don't have a regular income or large equity in their home.

Texas debt collection laws can protect you

Along with the Federal Debt Collection Practices Act (FDCPA), which protects consumers like you from abusive debt collection practices, Texas also has debt collection laws in place to shield you from unfair debt collection tactics.

The statute of limitations is the time period that a debt collector has to sue someone for a debt. So, if the statute of limitations on a debt is passed, you cannot be taken to court over it. This law keeps consumers safe from unfair prosecution of old debts.

Before you make any payments to a debt collector, which would restart the clock on the statute of limitations, you should figure out the statutes of limitations for different types of debt in Texas:


Texas Statute of Limitations
on Debt

Debt Type

Deadline

Written

4 years

Oral

4 years

On Account

4 years


Source: Findlaw

What's the best method of debt relief for you?

The best method of debt relief for you will depend on your unique situation. If monthly debt payments prove challenging, a debt management plan may be the best option.

No matter what debt relief method you choose, it's important to remember that it's a process, and it'll take time to get out of debt. Be patient and stay focused on your goal, and you'll end up debt-free. If you need help responding to a lawsuit, we can help.

SoloSuit is a service that helps you respond to a debt collection lawsuit. Visit us for more information and to learn how to get started.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

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Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

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Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

How to repair and improve your credit score

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

How to resolve student loan debt

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Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

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