Turbo Takeaways

They say everything is bigger in Texas, and unfortunately, that may be true about debt, too. Residents of the Lone Star State grapple with some of the highest credit card debt in the United States.

As the second most populous state in the U.S., just behind California, Texas is also one of the most popular states for people to seek residence. This is often attributed to its low cost of living and lack of state income tax, along with various social and cultural offerings.

While the Lone Star State may sound like a dream come true for cost savings, the amount of debt Texans have piled up is definitely one of the “big” parts of the state. Because of accrued credit card debt, along with missed and late credit card payments, Texas has one of the lowest credit scores in the U.S.

Although it may be cheaper to reside in Texas, with low living expenses and access to multiple low-priced services, debts can still add up fast and put consumers in financial trouble. Fortunately, Texas debt relief options give Lone Star residents the chance to get a fresh financial start.

Your Options To Get Out of Debt in Texas

Credit Counseling

Meeting with a credit counselor is a good start if you’re feeling overwhelmed with debt and don’t have a plan for getting out. Look for certified credit counselors who serve consumers in the Lone Star State.

How It Works in Texas
Certified credit counselors provide expert advice and help Texans explore their options for debt relief. Together, you and a credit counselor can make a plan to start tackling debts.
Pros
A credit counselor provides resources like financial education classes that train consumers to make informed choices with their money.
Cons
Credit counselors give advice, but it’s up to the individual to act on their suggestions and actually start paying down debt.
Cost
Credit counseling comes at a minimal cost, and those struggling financially may qualify for free or reduced-cost services.
Stats
More than 30,000 credit counselors work with clients across the U.S.
Resources
Explore the structure and benefits of credit counseling to decide if it’s the right path for your debt relief journey.

Debt Management

Texans who want to take the guesswork out of monthly bills can use debt management plans to simplify repayments.

How It Works in Texas
Many credit counselors offer debt management programs that schedule customer payments. Once you enroll in a debt management plan, the organization sends monthly payments to your creditors using a savings account you pay into.
Pros
Debt management takes the stress out of remembering to make payments every month.
Cons
Texans are typically required to close out most (if not all) credit cards while completing a debt management program.
Cost
You’ll pay a start-up fee and a monthly maintenance fee for each enrolled debt, ranging from $20 and up.
Stats
Texans owe an average consumer debt of $96,947.
Resources
Discover how debt management programs work and if they’re the right fit for you.

Debt Consolidation

Lone Star residents who want to simplify multiple payments into a single loan or pause interest fees to overcome modest credit card debt may want to consider using debt consolidation.

How It Works in Texas
Texans have two basic ways to consolidate debt to make payments more manageable. The first is to take out a debt consolidation loan big enough to cover all existing debts and switch to paying off one large new loan.
Another option is to open a zero-interest balance transfer credit card. This allows you to swap all balances to one card and knock out the principal without added interest fees.
Pros
Debt consolidation loans help consumers focus on paying off a single debt, often at a lower interest rate.
Balance transfer cards also simplify debt payments by eliminating or significantly lowering interest costs.
Cons
You’ll need a decent credit score to qualify for a debt consolidation loan. If you’re struggling with bad credit, you might have trouble securing a low enough interest rate and may end up paying more in fees than you would have with your separate debts.
Balance transfer cards only offer zero interest for an introductory period, typically around 12-18 months. If you fail to pay the full amount by the end of that window, your interest rate jumps, and you could pay sky-high fees on your leftover balance.
Cost
The cost of a consolidation loan depends on the amount you borrow to pay back your debt, plus interest. You may also pay an application fee for the loan.
Balance transfer cards may come with fees for various services, such as transferring your balance and an activation or application fee.
Stats
Texas carries a lower credit score than most states, with an average of 695. This ranks Texas 48th in the nation for credit scores.
Resources
Learn more about the importance of credit scores and how to improve them from TurboDebt’s® resource library.

Debt Settlement

Settling debt is an effective way to pay off unsecured balances faster, often for less than what you originally owed.

How It Works in Texas
Texans who enroll in a debt settlement program leverage expert help to negotiate with credit card companies or other creditors. These plans work best for Lone Star consumers who owe $10,000 or more in credit card debt.
Pros
Debt settlement programs allow you to pay off debts in as little as 12 months, depending on how much you owe.
Cons
Settlement isn’t effective for small debts or secured debts like a mortgage.
Cost
Reputable debt settlement companies don’t charge upfront fees. Instead, once your debt is settled, you’ll owe service fees up to 25% of what you enrolled.
Stats
Texans owe an average of $8,042 in credit card debt, up 5% from the previous year.
Resources
Read about the process of debt settlement and how it helps consumers.

Bankruptcy

Lone Star residents should consider bankruptcy as a last choice to relieve debt once other options have proved ineffective.

How It Works in Texas
Struggling Texans may find relief by wiping their financial slate clean through bankruptcy. Most consumers file either Chapter 7 or Chapter 13 bankruptcy, which involve selling off assets to pay creditors or following a structured payment plan lasting about three to five years.
Pros
Bankruptcy eliminates debts and allows you to reset your finances.
Cons
Bankruptcy negatively impacts your credit score and history for up to 10 years, making it hard to borrow money or make large purchases long after you’ve paid your debts.
Cost
Experts advise consumers to hire a bankruptcy attorney, which could amount to thousands of dollars in fees. You’ll also pay certain filing fees through your Texas district court.
Stats
Texas residents filed over 34,000 bankruptcy cases as of June 2025. This represents an increase of 25% from the previous year in certain districts.
Resources
Learn how bankruptcy affects your financial history and if it’s the right choice.

What You Need To Know About Debt in the State of Texas

Statute of Limitations on Debt Collections in Texas

The Statute of Limitations in the Lone Star State protects citizens and governs the rights of businesses to seek debt repayments. The length of time a debt is collectible gives a creditor up to that many years to seek legal action for debt repayment.

While consumers are still responsible for repaying debts after the Statute of Limitations expires, and debtors have made no payments, businesses have no legal recourse to pursue individuals and collect a debt.

Type of Debt Agreement Length of Time Collectible
Written Contracts4 years
Promissory Notes (Mortgages)4 years
Open-Ended Accounts (Credit Cards, HELOCs)4 years
Oral Agreements4 years
Medical Debt4 years

Resources for Financial Assistance in Texas

Texas provides many public programs to help citizens navigate financial hardship. Below you’ll find a brief list of key resources and financial assistance programs available in Texas:

Temporary Programs

State Health and Human Services

  • Supplemental Nutritional Assistance Program (SNAP): SNAP helps people purchase food and garden seeds to plant food that has nutritional value.
  • Women, Infants, and Children (WIC): WIC provides nutrition, health, and childcare resources to support pregnant mothers and those with young children. 
  • Lone Star Card: The Lone Star Card offers an Electronic Benefits Transfer (EBT) card for Texas residents that provides food and cash through programs such as TANF and SNAP.
  • Feeding Texas: The largest hunger relief organization in Texas, Feeding Texas provides food and resources from food banks to families and individuals in need.

Child Care

  • Texas Rising Star: Texas Rising Star works with childcare programs in the Texas Workforce Commission (TWC) and helps parents find early learning programs with available spots through its Texas Childcare Availability Portal.
  • Childcare Services (CCS): This program under the TWC provides financial aid to families needing childcare who meet income requirements. Parents can choose from licensed childcare centers, registered or licensed childcare homes, or relatives who are 18 or older.

Housing and Homelessness Assistance

Get Professional Help Paying Off Your Debt

Take that bold step towards financial freedom and relieve yourself of debts. Here at TurboDebt®, our team offers personalized solutions to help you navigate through your debt repayment journey with confidence.

Statistics About How TurboDebt Has Helped Texas Residents with Debt Relief

Whether you're struggling with credit card debt, personal loans, or other financial obligations, we have the expertise and resources to guide you every step of the way.

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