Collecting Business Debts in Texas: Strategies for Foreign Creditors
Collecting Business Debts in Texas: What Foreign Creditors Need to Know
Texas for International Creditors
Texas is the second-largest US state economy and a major destination for international trade — particularly energy, manufacturing, technology, and agriculture. Foreign creditors collecting debts from Texas-based companies benefit from a creditor-friendly framework: no state licensing requirement for collection agencies, powerful post-judgment enforcement tools, and efficient court systems across the state's major commercial centres (Houston, Dallas, San Antonio, Austin).
The challenge for foreign creditors: Texas is vast (268,596 square miles with 254 counties), and court venue depends on the debtor's location. A creditor pursuing a debtor in Houston files in Harris County; one pursuing a debtor in Dallas files in Dallas County. Each county has its own court schedules and local rules.
The Collection Process for Foreign Creditors
Jurisdiction. If the contract specifies Texas law or the debtor is based in Texas, Texas courts have jurisdiction. Foreign judgments can be domesticated in Texas under the Uniform Enforcement of Foreign Judgments Act (Texas Civil Practice and Remedies Code Chapter 35) — converting a foreign judgment into a Texas judgment enforceable through Texas courts.
Demand phase. Formal demand in English citing the contract, outstanding amount, and accrued interest. Texas permits contractual interest up to 18% for commercial transactions. The demand establishes the creditor's intent and creates the foundation for court proceedings.
Court filing. Texas District Courts handle commercial claims. Summary judgment for undisputed debts with strong documentation: 6-12 months. Default judgment for non-responsive debtors: 2-4 months.
Enforcement. Texas turnover orders (Texas Civil Practice and Remedies Code §31.002) are the foreign creditor's most powerful tool — the court can compel the debtor to surrender all non-exempt assets and appoint a receiver to manage the debtor's property until the judgment is satisfied.
Key Considerations
Statute of limitations: 4 years for written contracts. Foreign creditors must ensure claims are filed before this deadline — the clock typically starts from the date of breach, not the date the foreign creditor became aware of Texas procedures.
Currency. Texas courts award judgments in US dollars. Foreign creditors should ensure their claim calculations account for currency conversion at the appropriate date.
Representation. Texas requires that corporations be represented by licensed Texas attorneys in court proceedings. Foreign creditors must engage Texas counsel — they cannot represent themselves in Texas District Court.
Texas provides foreign creditors with a creditor-friendly framework, powerful enforcement tools, and efficient courts. The combination of turnover orders, no licensing requirements, and foreign judgment domestication makes Texas a productive jurisdiction for international debt recovery.
