Texas Commercial Debt Collection Laws: A Creditor's Guide

4 yearsCPRC §16.004 written contract

USD 10K§392.101 surety bond

TurnoverCPRC §31.002 — reaches intangibles

The Statutory Framework for Texas Commercial Debt Collection Laws

4 yearsCPRC §16.004Written contract / open account

4 yearsCPRC §16.051Residual — oral + open accounts

TurnoverCPRC §31.002Reaches receivables, equity interests

18%Finance Code 303Max commercial interest ceiling

10yr→CPRC §34.001Judgment enforcement — revivable

Collection process

1

Bond check + limitation audit

Finance Code §392.101: third-party collectors must file USD 10K surety bond with Texas Secretary of State. Check bond number before first demand. CPRC §16.004: 4yr clock from breach/due date — not invoice date.

2

Texas District Court or federal SDTX/NDTX

CPRC §38.001: attorney fees recoverable if prevail on contract. DTPA exemption: §17.49(g) for transactions >USD 500K. Pre-judgment attachment (CPRC §61.002) where debtor removing assets. Writ of garnishment (CPRC §63.001) with bond.

3

Post-judgment enforcement + turnover order

CPRC §31.002 turnover: court order compelling debtor to turn over non-exempt intangibles — receivables, contract rights, causes of action, equity in affiliates. Receiver appointed. Non-compliance = contempt. Most powerful Texas creditor tool.

Your Texas Houston distributor owes USD 380,000. Their counsel mentions homestead. Understand: Texas has a robust homestead shield AND an aggressive remedy set for non-homestead assets. The turnover order (CPRC §31.002) reaches exactly what the homestead does not protect.

Texas Enforcement Tools

RemedyAsset targetNotes

Turnover order + receiver (§31.002)

Intangibles

Receivables, equity interests, contract rights, causes of action — contempt for non-compliance

Ex parte possible

Post-judgment garnishment (§63.001)

Bank accounts

Bank accounts and third-party obligations owed to judgment debtor

Fastest for cash

Abstract of judgment lien (§52.001)

Real property

Non-exempt real property in county of recording — 10yr lien

10 yr lien

Writ of execution

Tangible assets

Constable/sheriff levies on non-exempt tangible personal property

Physical assets

Pre-judgment attachment (§61.002)

Bank/property

Debtor removing assets or about to defraud creditors — bond required

Pre-suit

Homestead shield (Property Code §41.001)

Protected

Unlimited value urban homestead (10 acres) / rural (100-200 acres) — no forced sale

Exempt

What are the commercial debt collection laws in Texas?

Texas commercial debt: CPRC §16.004/§16.051 — 4yr limitation. Finance Code §392.101 — USD 10K surety bond required. Post-judgment: turnover order (§31.002) reaches intangibles; garnishment (§63.001) reaches bank accounts; abstract of judgment creates 10yr real property lien. Homestead unlimited in value but capped at 10 acres urban / 100-200 acres rural — focus enforcement on non-homestead assets.