Statute of Limitations On Unsecured Debts

QUESTION: I understand there is a statue of limitation of 4 years to collect unsecure debt (say, credit card debt). The creditor sold the debt to a collection agency at the end of the 4th year of the debt. My question is would the clock reset on this debt account? I meant a 4 years statue of limitation starts all over again with the new collection agency? what if this collection agency now sold the debt to the second collection agency after number of years unsuccessfully to collect, and the circle repeats itself. What rights as a consumer of unsecure debt has to get this old debt off the record for good?

ANSWER: It sounds like your question relates to credit reporting more than potential lawsuits to collect the debt.
The clock for the statute of limitations on debt starts at the date of default. (Some creditors like to argue the clock starts from the date of chargeoff – -180 days after default.) Unless YOU make a payment, nothing else will restart that clock.
The statute of limitations to collect the debt in court is 4 years.
The amount of time that the debt will appear on your credit report is 7 years from the date of default. It makes no difference how many times the debt was bought and sold, it is still seven years. If you make a payment to any debt collector or debt buyer along the way, then the clock starts all over again.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Getting Sued Over A Debt Already Paid

QUESTION: A collection agency says they’re going to sue me over a debt I already paid, I don’t know what to do.

I have a few emails of paid in full, but a couple of the companies didn’t send me anything, and when I tried to call them it says it’s no longer a working number.

ANSWER: First of all, I would suggest that you pull a copy of your credit bureau reports. You may obtain a free copy through www. It is the only website that the Federal Trade Commission has approved of for a free credit report. You might find useful information on that website. Also, do you have old bank statements or cancelled checks to prove you paid?

If a third party debt collector is threatening to sue you on a debt that has been paid (whether you can prove it right now, OR NOT) then it seems your rights have been violated. I would suggest you contact a consumer rights attorney who has experience going after abusive debt collectors. They will probably want to look up this debt collector that is threatening to sue you. Specifically, they will want to see if this debt buyer is a common litigator; and also, they will want to find out if this debt collector has a surety bond on file with the Texas Secretary of State. If they do not, then this whole thing sounds like a scam- an illegal scam.

Keep in mind that the federal Fair Debt Collection Practices Act allows you to collect a statutory award, other damages, as well as your attorney fees. That is the reason why many consumer rights attorneys do not charge clients up front for their time. They can get paid for by the defendants. I strongly suggest you get your payment history together and call a consumer rights attorney licensed in Texas.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Sued By A Junk Debt Collector

QUESTION: Sued by a junk debt collector for $1500 on unsecured CC debt from 2011.  This clearly seems to be an attempt to get a default judgment by an attorney who expects that I will not answer. I’ll pay $250 to any licensed TX attorney who will answer on my behalf in the expectation that the junk debt collector will abandon hope due to the presence of an attorney and the weak claim. I seem to be one of many thousands of people who received court docs today judging by the quality of the summons. I’ve been doing research and this seems very easy to defeat. I’m wondering whether or not I should even bother to research how to defeat this when there might be an attorney willing to accept $250 to do it for me.

Last payment on the card was March 19th, 2011. I was served by someone in a $200 car on March 26th, 2015. The lawyer lives 300 miles away. The summons is very sketchy looking.

ANSWER: I don’t know who sued you and who their lawyers are. The debt buyer industry has been empowered over the last 2-3 years for a whole host of reasons. Yes, they may simply be interested in obtaining a default judgment. On the other hand, I have had many debt buyers – the likes of Midland Funding, Portfolio Recovery Associates, and many others up put a fight, even for very low balances. Their attorneys are in court with huge dockets all set for the same day: it is unlikely they would be coming to court for your case only. Plus, if this is a lawsuit in the Justice of the Peace court system, then the Texas Rules of Civil Procedure are severely relaxed, making it much easier to obtain a judgment.

You seem to be a terrific negotiator, considering your online bidding efforts here. Any lawyer that makes an appearance for you in an answer is on the hook for the entire case, not just the answer. An attorney who values their law license and their reputation will not get hired for the limited purpose of filing an answer and then asking the court to withdraw from your case. (I may be wrong, of course.)

If you fail to answer the lawsuit, or if you appear – pro se or through an attorney – and lose the case, the judgment will likely be significantly higher than $1,500.00, including interest, fees, court costs and attorney fees. The damage to your credit report, as well as the risk of post-judgment collection would be reasons for you to hire an experienced attorney.


What To Include In Your Answer To A Credit Card Lawsuit

QUESTION: I have been sued by a credit card company. I have to file a written answer with the Clerk.

My debt is for 11, 000 dollars. I would like to know what I need to include in the written answer to the district court?

ANSWER: You need to contact a consumer rights attorney for a number of reasons. Firstly, the debt-collection litigation industry is a very-well greased machine in the courthouse. Unless you are an attorney yourself, I would have serious concerns that you may not properly represent yourself.

An experienced consumer rights attorney will also want to review all debt-collection materials and your credit bureau reports to see whether your rights have been violated. In other words, you may have good grounds for a counter-claim.

There are several attorneys in the greater-Houston area that handle consumer rights exclusively. I encourage you to contact an attorney. You might find that you will end up ahead, even if you pay out-of-pocket for representation.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

Debt Collection Tactics

Debt collectors are notorious for engaging in what can often be described as abusive and harassing tactics in order to collect a debt. Some debt collectors will even go as far as threatening to come to your home or place of employment to serve you with lawsuit papers. In my experience, these particular debt collectors are the worst of the worst, and most often they usually are not even licensed to collect debt in Texas.

If, however, the party that was calling happens to be a legitimate debt collection agency, then one would probably be within their rights to sue them for violations of the federal and Texas debt collection laws. My office has handled many suits against abusive debt collectors. The laws allow the consumer to recover damages, in addition to all of the attorney fees and costs incurred while suing the debt collector. Many consumer rights lawyers will handle debt collection abuse cases on a contingency basis.

Before proceeding with a lawsuit, it is advisable pull your credit report to determine if the particular collection agency in question is listed. Depending on when the account in question went into default, it may or may not appear as a negative comment on your credit report. A free copy of your credit report can be downloaded once every year from Any suspicious lines listed on your credit reports should also be taken up with a consumer rights attorney.

Finally, if you have the name and/or phone number of the collection agency, and especially if you have any recordings, feel free to send that information along. My office will gladly do some research to determine if the collection agency is legitimate.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

I am being sued, should I hire an attorney? What if I cannot afford an attorney?

To be short and to the point, YES- you should hire an attorney. One local debt collection attorney noted to our staff that he does not mind dismissing the cases where an attorney steps in to represent a consumer as these cases only account for about 10% of his case load. Meaning, he does not mind dismissing 10% of his cases due to representation seeing as he is still getting judgments granted in his favor on the other 90%. This could be seen as a general business model for most debt collection law firms. It makes no sense for them to use their time and resources on contested cases if they can be more efficient on those that are uncontested.

You can find a consumer attorney in your area by visiting

If you cannot afford to pay a private consumer attorney and you believe your income is low enough for you to be considered “impoverished” by the Federal Poverty Guidelines, you can apply at your local legal aid or other non-profit legal services center for help.

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.