When a debtor fails to repay back the person's debts over a long period of time, Texas law gives the creditors the legal right to initiate a lawsuit in order to recover these debts. In many cases the debtor's default is often associated with a financial adversity like multiple debts, unemployment, medical expenses and other financial adversities. It must be noted that most financial, as well as legal, experts usually encourage the debtor to take quick and efficient steps in order to prevent such lawsuits against debts that are in a bad financial state.
In many cases the debtor consults professional legal attorneys as well as financial advisors who can help the person negotiate with the credit company in order to formulate a repayment plan. Creditors also often prefer such re-negotiation instead of going to a debt collection agency. Creditors usually sell off their debts to the collection agency in cases where it is almost guaranteed that the debtors would be unable to repay the debts within the foreseeable future.
Texas laws also provide debtors' protection which can offer beneficial protection against creditors and debt collection agencies. Debt collection agencies must follow the various laws enshrined under the Texas Debt Collection Act.
The Act prescribes that debtors do not engage in any fraudulent activities or try to collect any money above and beyond the stipulated and agreed upon settlement between parties. The debtor can even dispute any of these settlements. Agencies have around 30 days from the date of a debt's written receipt before taking any actions in such cases.
Source: Texas Attorney General, "Debt Collection," Accessed on May 22, 2015