Texans who need debt relief have several options, including hardship programs, debt consolidation and more.

Debt Relief in Texas

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Millions of Texans struggle financially every year. Texas regularly ranks toward the top of states with the highest total credit card debt, averaging $6,753.

Texas also has some of the most lenient payday lending laws, landing two cities — Dallas-Fort Worth and Houston — on the list of top 10 cities with the worst payday lending problems.

If you’re a Texan who needs debt relief or other financial assistance, you’re not alone. Read on to learn about your state’s key resources.

Are you eligible for debt relief?

If you’re a Texas resident, DebtHammer may be able to help.

Texas overview

The state has an estimated population of 29,527,941 and is ranked 13th in terms of poverty rate at 13.4%. In contrast, the nationwide average poverty rate is 11.6%.

The median household income in the Lone Star State is around $63,826, according to 2020 census data. In comparison, the median household income in the United States is $70,784, about $7,000 higher than that in Texas.

Texas debt statistics

Here are the most recent debt statistics in Texas:

  • Average household debt: $45,290
  • Average student loan debt: $32,920
  • Average credit score: 692
  • Median mortgage payment: $1,549 (monthly)
  • Bankruptcies: 66.93 per 100,000 residents filed in 2021
  • Personal income: $54,230 (annual mean wage)
  • Child poverty: 19.2% in 2019
  • Unemployment: 4% (estimated as of September 2022)

Debt relief options for Texas residents

Several forms of Texas debt relief options exist, including:

  • Debt management plans: A DMP is a three- to five-year program you can set up through a nonprofit credit counseling agency. With one, you work with a credit counselor to repay what you owe over time. The credit counselor may be able to get your creditors to waive late fees or lower your monthly interest rates.
  • Debt consolidation loans: Debt consolidation loans let you merge several high-interest debts – credit cards, personal loans, etc. – into one loan with a consistent monthly payment. If you have good credit, you could potentially cut down on interest charges and save hundreds or even thousands of dollars.
  • Debt settlement: This option usually involves working with a debt settlement agency to negotiate how much you owe to a reduced amount. If it works, it could cut your total amount owed down by up to 50%. This process typically requires you to make a lump-sum payment to pay the remaining balance. You may also need to pay agency fees.
  • DIY plans: A DIY debt settlement plan is a good alternative to using an agency if you have solid negotiation skills and want to save on agency fees.
  • Bankruptcy: Filing for bankruptcy could offer you a fresh start, but it could also ruin your credit score. The two main types of personal bankruptcy are Chapter 7 and Chapter 13. Speak with a bankruptcy attorney before going this route.

Debt settlement in Texas

If you’re struggling to make multiple payments each month, have fallen behind on bills, or have turned to high-interest loans or credit cards to make ends meet, a debt settlement plan could be the answer.

With a debt settlement plan, you could get the total amount of debt owed reduced to a lower amount – usually 10% to 50% of the original balance. Instead of making payments to your creditor, you save up so you can make a lump-sum payment for a smaller amount.

In Texas, debt settlement can help you pay off different forms of consumer debts, including:

  • Credit cards/lines of credit
  • Personal loans
  • Department store cards
  • Old judgments
  • Student loans in default
  • Other unsecured loans or debts

Debt settlement can be risky, though. Before going this route, here are a few things to be aware of:

  • Your creditors are not required to agree to settle debts, meaning the process may not work.
  • If a creditor refuses to settle a debt and you’ve stopped making payments, you could end up having to pay late fees.
  • Any missed or late payments will show up on your credit report and bring down your score.
  • Even if the debt is forgiven, you may have to report the forgiven amount as income tax to the IRS.

Texas debt settlement companies

Looking for a debt settlement agency in Texas to help you get a handle on debts? Here are a few firms that could help:

  • Debt Redemption Texas Debt Relief: This agency is accredited on BBB and has 5/5 stars and an A+ rating. The address is 40 NE Interstate 410 Loop, Suite 340 San Antonio, Texas 78216.
  • Ledell Group Credit Firm: This credit counseling company offers services that primarily help with credit repair and building. The address is 350 North St. Paul Street, Dallas, TX 75201.
  • Xpert Credit Repair: This company offers an initial free consultation and specializes in credit repair services. However, it also refers those seeking debt settlement or lawsuit help to a qualified Consumer Credit Attorney. The main address is 1409 Botham Jean Blvd. Ste 239, Dallas, TX 75215.
  • New Era Debt Solutions: With 4.92 out of 5 stars on BBB and an A+ rating, this company offers debt settlement in Texas. Their headquarters are located at 330 Wood Rd., Suite B Camarillo, CA 93010.
  • InCharge Debt Solutions: BBB accredited with an A+ rating, this company offers debt solutions and debt settlement services in multiple states, including Texas. Their main address is 5750 Major Blvd Suite 300 Orlando, FL 32819-7971

Texas debt settlement attorneys

Law Office of Marilyn D. Garner: 2001 E Lamar Blvd #200, Arlington, TX 76006; www.marilyndgarner.com

Allmand Law: 8350 N US 75-Central Expy 1000 Suite 1200, Dallas, TX 75206; www.allmandlaw.com

Shuster Law, PLLC: 860 Hebron Pkwy STE 303, Lewisville, TX 75057; www.shusterlawfirm.com

Weston Legal, PLLC: 177 W Gray St, Houston, TX 77019; www.westonlegal.com

Law Office of Susan G. Taylor: 1502 West Ave, Austin, TX 78701; www.affordabletexasbankruptcy.com

The Chivis Law Firm: 18911 Hardy Oak Blvd Suite 207, San Antonio, TX 78258; chivislaw.com

Griffin Law Firm, Debt Resolution Center: 1123 E Rio Grande Ave, El Paso, TX 79902; bankruptcy4elpaso.com

Debt resources for Texas residents facing hardship

Texas offers a variety of local and state programs for residents looking for help with debt or finances. Among other things, these resources can provide low-cost or free childcare, job-related education and training, healthcare, and legal aid. Some programs can also help with the cost of rent or utilities.

State hardship programs

Texas offers many state-specific hardship programs for low-income households and people experiencing financial hardship. These include:

  • TDHCA: The Texas Department of Housing and Community Affairs is an online resource that offers information and resources about how to receive financial aid. Click “Help for Texans” on the main website to find funding through a specific program.
  • CHIP: Children’s Health Insurance Program is meant to help low-income families get affordable health care for their children. It includes certain services, like medicine and hospital care.
  • SNAP: In Texas, SNAP is available to help low-income households subsidize their food costs. Simple apply for a Lone Star Card and use it like you would a debit card at most grocery stores.
  • TANF: This program helps low-income individuals through a monthly cash stipend that can be used to pay for basic necessities – such as food, housing, and clothing.
  • WIC: The Women, Infants and Children program is designed to help certain people, including low-income women with young children, afford food costs. Most people who qualify for SNAP or TANF benefits also qualify for this program.
  • Healthy Texas Women: This programs focuses on women’s health. It includes benefits that can help pay for many female-focused examinations, such as pregnancy testing, HIV screening, and mammograms.
  • RAICES: The Refugee and Immigrant Center for Education and Legal Services helps low-income immigrants in many ways, especially with legal services. This includes assistance with citizenship services.
  • Refugee Services of Texas: This program helps refugees and people who’ve survived human trafficking through basic need assistance, employment help, and applications for state or federal benefits.

If you need help finding or applying for benefits, check with Your Texas Benefits. Alternatively, go to 211Texas and see what types of assistance are available there. Or, if you’re looking for specific help in your area, go to Texas Department of Housing and Community Affairs.

Food assistance

Through the Texas Health and Human Services website, there’s also a list of food banks and pantries throughout the state. This is called the Texas Food Bank Network Provider.

Some of the main food banks in the state include:

Food Bank of West Central Texas

5505 N. First Abilene, TX 79603

(325) 695.6311

North Texas Food Bank

3677 Mapleshade Lane Plano, TX 75075

(214) 330.1396

Central Texas Food Bank

6500 Metropolis Drive Austin, TX 78744

(512) 282.2111

High Plains Food Bank

815 S. Ross PO Box 31803 Amarillo, TX 79120

(806) 374.8562

West Texas Food Bank

411 S. Pagewood Ave. Odessa, TX 79761

(432) 580.6333

Debt collection laws in Texas

The state of Texas adheres to the Fair Debt Collection Practices Act (FDCPA). This is a federal law that governs how creditors and debt collectors can try to collect money.

Debt collectors in Texas are also regulated by the Texas Debt Collection Act, which offers additional protections that the FDCPA does not. Under the Texas Debt Collection Act, the original creditor cannot engage in certain practices that are usually only applied to third-party debt collectors.

The Texas Debt Collection Act prohibits debt collectors from doing any of the following:

  • Using threats of violence or arrest
  • Coercing the borrower
  • Falsely accusing the debtor (person who owes the money) of committing a crime or fraud
  • Claiming they can repossess any property without a court hearing
  • Call the debtor without disclosing their name and agency
  • Use obscene language or profanities
  • Make anonymous calls or contacting the debtor’s friends, employer, or family

Debt collectors and creditors are also prohibited from engaging in the following fraudulent acts:

  • Intentionally misrepresenting themselves or knowingly using another name (including agency name) to collect money
  • Falsifying the nature of the services rendered by the collection agency
  • Claiming to have something of value intended for the consumer in order to get personal or financial information about the consumer
  • Refusing to identify the amount owed and who the debt belongs to
  • Attempting to get more money than what’s originally owed (there may be exceptions, such as late fees or interest charges)
  • Sending fake court documents to the debtor

Income and employment in Texas

The current unemployment rate in Texas is 4%. This is a vast improvement over the previous percentage, which was 12.6% (during 2020).

Currently, Texas is ranked number 1 in the U.S. for job growth. The state has experienced considerable job growth in recent years.

Texas is a “right to work” state, meaning you cannot be denied employment for refusing to join a labor union. The downside is that there is less job security since employees are not protected by a union. It may also lead to lower wages.

The state is also an employment at-will state, meaning an employer has the right to fire an employee for any reason or no reason. There are exceptions to this. For example, an employer cannot fire somebody due to discrimination or for participating in obligatory jury duty.

How to apply for unemployment benefits in Texas

Applying for unemployment benefits in Texas is fairly straightforward. Start by heading over to the Texas Workforce Commission website. There, you’ll find a useful tutorial document that can help you along the process.

Either from the main page or through a TWC Internet application, you’ll need to set up a User ID and password. From there, follow the prompts to complete the online application. You’ll need certain information, such as:

  • Personal information
  • Contact information
  • Job information (ex. business name, employer contact details, number of hours worked, and dates of employment)
  • Some form of ID (ex. Texas driver’s license or identification card)

It’s recommended to apply as soon as you find out you’re going to lose your job – ideally before you finish your last day. The effective date for unemployment benefits will begin the Sunday of the week you apply.

For information on eligibility and benefit amounts, go here: https://www.twc.texas.gov/jobseekers/eligibility-benefit-amounts 

Banking and taxes in Texas

Nine out of 50 states do not have state income tax, one of which is Texas. The Lone Star State does have a 6.25% sales tax, though.

Around 7.7% of Texans – about 2,273,651 residents – are currently unbanked, which means they don’t have a checking or savings account.

Texas housing market

The average home value in Texas is $315,815, according to Zillow. This is a 17.7% increase over the previous year. In comparison, the current average home value in the country is $357,810.

Around 62.3% of housing units in Texas are owner-occupied. The median monthly mortgage payment, meanwhile, is around $1,675. Rent varies based on location and property size. In Austin, for example, rent is $1,826.

Like many states, Texas has a homestead exemption. This exemption lets certain homeowners reduce how much they owe in taxes – up to $40,000. To be eligible, you must be a full or partial homeowner, use the property as your primary residence, and be a current resident of Texas. 

Retirement in Texas

According to Personal Capital, the average Texan has about $434,328 set aside for retirement. To retire comfortably, the average Texan should have about $610,019 saved up. 

Average Texas insurance premiums

The standard car insurance premium in Texas is $1,842 annually, or $153.50 a month. This is about $400 more than the national average of $1,442.

When it comes to home insurance, Texans spend a little more than $1,800 a year for a home valued at $250,000. This is similar to how much they spend on auto insurance but significantly higher than the U.S. average.

Payday lending status in Texas: Legal

Payday loans are legal in Texas. The state’s payday lending laws are highly complex, yet also minimally restrictive.

If you’re thinking about taking out a payday loan, here’s what you can expect:

  • Maximum loan amount: N/A
  • Maximum Interest Rate (APR): N/A (due to the credit access business loophole under Tex. Fin. Code Ann. §393)
  • Minimum loan term: 7 days
  • Maximum loan term: 180 days

For more information about payday lending in Texas, check out this article: https://debthammer.org/texas-payday-loan-laws/

Statute of limitations on debt in Texas

The statute of limitations on consumer debts in Texas ranges from three to four years, depending on the debt type. In particular:

  • Medical debt: 4 years
  • Credit card: 4 years
  • Auto loan debt: 4 years
  • State tax debt: 3 years

Help for Veterans

 As of 2022, Texas was home to 1.4 million registered Veterans. The Texas Veterans Commission serves as an advocate to help improve the quality of life for Veterans throughout the state — as well as for their families.

For Veterans who need help or are facing unemployment, homelessness, or other financial hardships, here are resources that can help.

Facilities in Texas

There are many facilities for Veterans throughout Texas. Some of the main ones include:

West Texas VA Health Care System

300 Veterans Boulevard Big Spring, TX 79720-5566

(432) 263-7361

Central Texas Veterans Health Care System

1901 Veterans Memorial Drive Temple, TX 76504-7451

(254) 778-4811

Michael E. Debakey Department of Veterans Affairs Medical Center (VA Houston Health Care)

2002 Holcombe Boulevard Houston, TX 77030-4211

(713) 791-1414

Dallas Vet Center

8610 Greenville Ave. Suite 125 Dallas, TX 75243

(214) 361-5896

Houston Regional Office (Veterans Benefits Administration)

6900 Almeda Road Houston, TX 77030

(800) 698-2411

Fort Bliss National Cemetery

5200 Fred Wilson Ave. El Paso, TX 79906

(915) 564-0201

Austin Information Technology Center (VA Central Offices)

1615 Woodward St, Austin, TX 78741

For a complete directory of VA offices, go to the U.S. Department of Veterans Affairs website and choose your state.

Employment resources for Veterans

Whether you’re a Veteran or are a surviving spouse of one, here are employment resources in Texas that could help:

  • CareerOneStop – one-stop shop for job resources and available positions in your area
  • Warriors to Work – helps through career counseling, job searching, resume assistance, etc. (part of the Wounded Warrior Project)
  • Helmets to Hardhats – this nationwide program helps Veterans and active-duty military personnel transition into a civilian career in the construction field
  • VeteranRecruiting.com – designed for Veterans and military spouses, this website offers employment resources, online career fairs, and a virtual recruitment center
  • My Next Move – this resource helps Veterans find a civilian career that uses their military-gained skills
  • Hiring Our Heroes – another nationwide program, this one helps Veterans and their families with networking, job training, and related education

The Bottom Line

From debt settlement to debt consolidation, debt relief exists for residents of Texas. More than that, the state offers a multitude of affordable resources and programs for those who need financial help.

Whatever your situation, if you need help, check with your local and state government to see what’s available. They may be able to help through temporary financial hardship relief, bills management, job search assistance, and more.


How long can a debt be collected in Texas?

This depends on the type of debt, but most consumer debts can be collected for three to four years.

When does the statute of limitations begin in Texas?

The statute of limitations in Texas begins on either the date of the last payment, or when the debt is first considered past due.

Am I responsible for my spouse’s debt if I get divorced in Texas?

When you get divorced in Texas, all marital debts (those acquired during the marriage) are split between both spouses. If your spouse acquired a debt before the marriage, they are solely responsible for repaying it.

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