Texas debt relief - facts, programs, and solutions

Credit card debt has become a national epidemic. Unfortunately, Texans are not immune. At a time when credit card debt is at an all-time high nationally, Texas residents face a larger credit card debt burden than most Americans.

If debt is weighing on your budget, you may need a helping hand. Fortunately, there are a variety of debt relief solutions available to Texans. Learning about your options can be the first step toward solving the problem.

What is debt relief?

Debt relief is one of those broad terms that can mean a variety of things. In general, it refers to making your debt more affordable. This can be done a few ways:

• Stretch your payments over a longer time

• Reduce your interest rate

• Write off some or all of your debt

Getting debt forgiven is what people often think of as debt relief. However, other methods can also make your debts easier to handle. These include credit counseling, bankruptcy, and debt consolidation. You also have legal defenses available to you, as well as various kinds of public aid. 

The right approach depends on your needs and resources. It’s important to understand your options so you can see which is the best fit. 

Average Credit Card Debt in Texas

Credit card debt in Texas impacts many across all age groups. We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during October 2024. Here are the key statistics:

The average debt is much higher than those reported by the New York Federal Reserve. For example, based on Q2 2024 data, Texans owe an average of $6,824 of credit card debt. That’s over $500 more than the national average. Texans are also more likely than the average American to be 90 days or more overdue on their credit card debt. 

In other words, the need for debt relief is more urgent than in most other places. That’s why it’s especially important to know what types of debt relief are available in Texas.

Texas debt relief programs: How do they work? 

Although many people in Texas face similar debt problems, everyone’s situation is a little different. The best debt solution depends on a few variables. These include:

• the type and amount of debt you have

• your credit standing

• how much income and other financial resources you have.

These factors help explain why Texas debt relief programs of different kinds are available. 

For example, if you think you could pay your debts with the right advice, credit counseling might be right for you. This doesn’t reduce the amount you owe. However, it could help you figure out how to pay what you owe without further credit damage.

If your debts are simply more than you can hope to repay, bankruptcy may be the right approach. Bankruptcy is a legal procedure for getting rid of most types of debts, using whatever resources you have. This can mean giving up some assets or future income, and it can have a long-term impact on your credit. However, once the court decides how much of your debt you can pay, it protects you from any further attempts to collect the rest of your debt. 

Somewhere in between the extremes of debt counseling and bankruptcy is debt settlement. This can reduce the amount that you owe, while leaving you more financial flexibility than bankruptcy.

Debt settlement: A powerful solution for Texas residents

Debt settlement works by convincing creditors to accept less than the full amount you owe. While creditors don’t like to do this, they may realize it’s their best option once they understand that you’re unable to pay all your debts. 

You can reach this understanding by negotiating with creditors yourself. Or you can work with a debt relief specialist like Freedom Debt Relief. 

What can debt settlement accomplish? Often, debt settlement can reduce debt by 25% to 50%. That can allow you to pay off your remaining debt faster than just changing the terms of your debt. The sooner you get rid of your debt, the sooner you can rebuild your credit. 

That fresh start can be the right solution if you’ve already done a lot of damage to your credit by missing payments. You might have to pay taxes on the portion of your debt that’s forgiven. However, that should still cost you less than paying the full amount of your debt. 

Is debt consolidation the right choice?

If you feel you could pay your debts if the payment terms were a little easier, debt consolidation might be a good choice.

With debt consolidation, you borrow money to pay off some or all of your other debts. This isn’t simply to move debt from one creditor to another. In the process, you should accomplish one or more of the following:

• Simplify your monthly payments by merging multiple payments into one

• Lower the interest rate on your debt to reduce your borrowing costs

• Reduce monthly payments by stretching repayment over a longer time, though this may raise your long-term interest costs.

This approach makes the most sense if your credit is still in pretty good shape. It allows you to avoid the kind of hit to your credit that bankruptcy or debt settlement might entail. Better credit also makes it more likely that you can qualify for a debt consolidation loan. 

On the other hand, debt consolidation might not be as strong a solution as debt settlement if your debts are too big to afford under any circumstances. This is especially true if you have a lot of unsecured debt, like credit card debt. 

Texas statute of limitations

When considering your options for handling debt, it helps to be aware of Texas debt laws. Debt collection is subject to a statute of limitations. This is a time limit on how long a debt collector can wait before bringing a lawsuit to collect a debt.

There is no federal statute of limitations on debt collection. Instead, this time limit varies from state to state. The statute of limitations in Texas is four years. This means a creditor has four years from when a debt becomes overdue to file a lawsuit to collect it.

If the statute of limitations expires, the debt collector may still try to collect it. Non-payment of the debt may still appear on your credit record. However, you would no longer be under threat of a lawsuit that could force you to pay the debt. 

It is important to seek legal advice about how the statute of limitations applies to your situation before you assume protection under it.

Hardship programs for Texas residents

As you consider your debt relief options, make sure you learn about Texas hardship programs offering financial assistance and advice. Here are some examples:

• Healthcare expenses are often a cause of debt. You can find out about federal Medicare and Medicaid programs to help with these expenses through the Centers for Medicare & Medicaid Services. 

• The Texas Department of Health and Human Services offers information on a variety of state relief programs. These services include help with healthcare insurance, food benefits and emergency payments for essential needs. 

• The state government provides financial hardship assistance for renters and homeowners. 

• The US Department of Justice has a search tool that can help you find approved credit counselors in Texas. 

• The Texas Legal Services Center offers free assistance to low-income Texans. This legal assistance can help you access healthcare, housing and government benefits. 

• Freedom Debt Relief is available to help Texas residents understand and implement debt relief solutions. 

Find your debt relief solution

If you’re struggling with debt problems in Texas, you can learn more about your options with a free debt relief evaluation from Freedom Debt Relief. 

Freedom Debt Relief has offered personalized debt solutions to millions of people. They can help you stop worrying about your debt problems, and start solving them.