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.
Texans can free up cash each month with Freedom Debt Relief
Ozzy S., Freedom client²
“Right away, I had more money each month because of program costs so much less than what I was paying on my minimums.”
Excellent •
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.
What are the different types of debt relief programs available for Texas residents?
Texas residents’ options for debt relief include:
Credit card hardship programs
Debt management plans (DMPs)
Debt consolidation
Debt settlement
Bankruptcy (Chapter 7 or Chapter 13)
There are no state-sponsored programs for debt relief in Texas. If you get phone calls, emails, or letters from companies that claim to be able to help you walk away from debt, use caution. Those could be signs of a scam.
If you need to talk to someone about your debt, the Texas Office of Consumer Credit Commissioner (OCCC) encourages you to reach out to a credit counseling agency. You can find links on the OCCC website. A credit counselor can look at your income, expenses, and debt to determine whether you’re a candidate for a debt management plan. The OCCC regulates credit counselors in the state to make sure Texas residents are protected from unfair or unethical practices.
You can also get a free debt evaluation from a debt expert at Freedom Debt Relief. Click “See if you qualify” above.
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 March 2025. Here are the key statistics:
| Average credit card debt for all debt relief seekers | Percent holding Credit Card Debt | Average Debt for all debt relief seekers and carrying credit card balance |
|---|---|---|
| $14,019 | 88% | $15,872 |
| (▲ -1.4% MoM) | (0.0% MoM) | (▲ -1.1% MoM) |
Copyright© 2025. Freedom Debt Relief, LLC. www.freedomdebtrelief.com
This snapshot shows that the average credit card debt for Texans seeking debt relief rose slightly month-over-month (MoM), with both the percentage of debt holders and the average debt for balance carriers experiencing a modest increase.
Breakdown of average credit card debt by age group
This breakdown shows how credit card debt affects each age group in Texas, with older adults generally carrying higher balances and a greater proportion holding debt.
| Age Group | Percent holding Credit Card Debt | Average Debt for Balance Carriers |
|---|---|---|
| 18-25 | 78% | $8,916 |
| 26-35 | 86% | $12,192 |
| 36-50 | 88% | $16,555 |
| 51-65 | 88% | $16,610 |
| 65+ | 89% | $16,769 |
Copyright© 2025. Freedom Debt Relief, LLC. www.freedomdebtrelief.com
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 could reduce the amount of debt you have to pay. That could allow you to get rid of 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 financial reset 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.
Can Texas debt relief programs help with medical debt or student loans?
Texas debt relief programs could help with medical debt or student loans if you qualify for debt relief.
A debt relief company might be able to help you:
Create a monthly budget that allows you to manage medical bills and/or student loan payments
Negotiate a settlement of medical debts or private student loans that are in default
Find a consolidation loan for your medical bills
Help you weigh your consolidation or refinance options for student loans
Compare the range of services different companies offer to find one that helps with medical and education debt. You can also explore other options for help, outside of debt relief companies.
Texas charity care programs, for example, help with medical bills for people in financial need. Government-sponsored loan repayment programs offered in the state could help reduce the cost of student loans for borrowers who work in certain career paths.
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.
What are the pros and cons of debt settlement versus debt consolidation in Texas?
Debt settlement could help Texas residents pay off debts for less than what's owed. Debt settlement is for someone with a financial hardship. A settlement may be a good option if you:
Mostly owe unsecured debts, like credit cards or medical bills
Are behind on payments, or are in danger of falling behind
Need a more affordable monthly payment than what you have now
Would like to get rid of debt at a faster pace, compared to minimum payments
Debt consolidation is the combination of multiple debts into one, typically through a loan. For example, you might use a home equity loan to pay off credit cards and other debts. Debt consolidation lets you replace multiple payments with just one.
Consolidation could be a better fit if you can afford to make your monthly debt payments, but want to simplify them. Unlike debt settlement, consolidation won't reduce the total amount you owe.
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.
What are the Texas state laws regarding debt collection practices and consumer rights?
The Texas Debt Collection Act protects residents from abusive and fraudulent debt collection practices. Under the Act, debt collectors cannot:
Threaten you with violence or other criminal acts
Use profane or obscene language
Falsely accuse you of fraud or other crimes
Threaten to repossess or seize your property without a court order
Harass you with anonymous phone calls or excessive calls
Call you collect without disclosing their real name before you accept the charges
Use a false name or identification
Misrepresent the amount of the debt or its judicial status
Send falsified documents to create the impression that they come from a court or other official agency
Fail to disclose who holds the debt
Misrepresent their services
Use false representation to gain access to your information
Try to collect more than the amount agreed upon
If a debt collector violates your rights, you can report them to the Texas attorney general's office. Violations can trigger criminal and/or civil penalties.
Financial Hardship Programs For Texas Residents
As you consider your debt relief options, make sure you learn about Texas financial 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 U.S. 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.
How to Qualify for Government-Assisted Debt Relief Programs in Texas
The only government debt relief program available in Texas is bankruptcy. Chapter 7 bankruptcy eliminates eligible debts. Chapter 13 lets you repay them over three or five years.
Chapter 7 eligibility is based on your income, compared to the median income in your state, by household size. If your income is below the threshold, you qualify.
Here are the median incomes for Texas by household size, as of June 2025:
Family of 1: $63,448
Family of 2: $83,037
Family of 3: $95,391
Family of 4: $110,719
*Add $11,100 for each additional person above four.
In a Chapter 7 bankruptcy, you might have to give up some of the things that you own and turn them over to the court. Those assets are sold, and the money is used to pay your creditors.
Everyone who files bankruptcy gets to keep something. Texas is unique because it’s the only state where you get to keep the entire value of your home.
How does filing for Chapter 7 bankruptcy in Texas impact your credit score and future borrowing?
Chapter 7 bankruptcy is all but guaranteed to cause you to lose credit score points. The higher your score is before you file for bankruptcy in Texas, the steeper the drop is likely to be. You may not notice as much of a dip if your score is already low.
A Chapter 7 bankruptcy remains on your credit report for 10 years. You may have a hard time getting approved for loans or lines of credit initially. Over time, the credit score impact begins to fade.
Try these tips to rebuild your credit standing:
Apply for a secured credit card or a small credit-builder loan
Pay bills on time or early each month
Have someone you know add you to one of their credit cards as an authorized user
Apply for a retail store credit card and pay the bill in full each month
You could begin to notice results within 12 to 18 months.
Find Your Texas 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 could help you stop worrying about your debt problems, and start solving them.
Texans can free up cash each month with Freedom Debt Relief
Ozzy S., Freedom client²
“Right away, I had more money each month because of program costs so much less than what I was paying on my minimums.”
Excellent •
List of accredited non-profit credit counseling agencies in Texas
A nonprofit credit counseling agency could help you understand your debt situation and explore a debt management plan. Here are some of the options you may consider if you need an accredited, nonprofit credit counselor in Texas.
Money Management International (MMI): MMI can offer guidance on debt resolution and debt management plans.
American Consumer Credit Counseling (ACCC): American Consumer Credit Counseling's team of experts can provide help with debt management plans.
Navicore Solutions: Navicore offers help with debt management plans.
Accredited credit counseling agencies also offer the course that’s required of anyone filing for bankruptcy protection.
Other notable nonprofit accredited credit counselors that operate in Texas include 1$ Wiser Consumer Education, Debt Education and Certification Foundation, and GreenPath Financial Wellness.
Nonprofit credit counseling agencies typically don’t offer other debt solutions besides a debt management plan. If you want to weigh all of your options, it’s a good idea to talk to a bankruptcy attorney and a debt settlement expert as well.
Compare the best debt relief companies operating in Texas for 2024
The best Texas debt relief companies offer actionable solutions and charge reasonable fees. Some of the best debt relief companies include:
Freedom Debt Relief: The nation’s leading debt settlement company also has a network of partners who can provide help with debt consolidation loans.
Other top debt relief providers include:
National Debt Relief
Pacific Debt Relief
Accredited Debt Relief
All four debt settlement companies have excellent ratings on TrustPilot and an A+ rating with the Better Business Bureau (BBB).
What are the common signs of a debt relief scam in Texas and how to report it?
Texas debt relief scams can cost residents money, but there are two simple ways to identify them:
Help comes to you. A debt relief company that offers to help you even though you haven't reached out to them could be a scam. Watch out for unsolicited phone calls, emails, letters, or texts.
Demands for payment upfront. No reputable debt relief company asks for payment upfront. If a company requires you to pay before they'll help, or they ask for payment through unusual methods, like Cash App or Venmo, you may want to look elsewhere for debt relief.
If you think you've been targeted by a debt relief scammer, report them to the Texas attorney general's office. You can also file a complaint with the Consumer Financial Protection Bureau (CFPB) and submit a report to the Federal Trade Commission (FTC).
What are the average fees or costs associated with debt management plans in Texas?
Texas debt management plans may come with a one-time setup fee and monthly fees. The average fee can vary by company and by the number of accounts you enroll in the plan.
State law limits how much debt management companies can charge, so fees aren't unlimited.
Here are the statutory limits on debt management plan fees as of June 2025:
Debt management setup fee: $136
Debt management monthly service fee: Lesser of $14 per account or $68
Counseling or education if no debt management service is provided: $136
Fee for dishonored payment: $30
Debt settlement fees are also subject to caps under Texas law. The maximum setup fee allowed is $544, while monthly service fees are limited to the lesser of $14 per account or $68.
If you're considering a debt management plan in Texas, review the fees before you enroll. Ask for an explanation of any fees that you don't understand.
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