Turbo Takeaways
- Texans face growing debt despite the state’s relatively low cost of living.
- Debt relief programs like settlement, consolidation, and management plans can ease repayment.
- With a tailored strategy, residents can reduce debt faster and rebuild financial confidence.
Your Options To Get Out of Debt in Texas
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.
Credit Counseling
Pros
- Access to certified professionals who help create realistic goals
- Offers free or low-cost financial education to improve money management
- Helps identify budgeting habits that prevent future debt
Cons
- Requires consistent follow-through to see real progress
- Doesn’t directly eliminate existing debt balances
- Some agencies may promote paid services if not fully nonprofit
How It Works
Certified credit counseling advisors provide expert insights and help Texans explore their options for debt relief. Together, you and a credit counselor can make a plan to start tackling debts.
Meeting with a credit counselor is a good start if you’re feeling overwhelmed by debt and don’t have a budgeting strategy for getting out. Look for certified credit counselors who serve consumers in the Lone Star State.
- Cost
Credit counseling is available at minimal cost, and those struggling financially may qualify for free or reduced-cost services. - Stats
Over 30,000 credit counselors are dedicated to helping clients across the U.S., providing support and guidance every step of the way. - Resources
Explore the structure and benefits of credit counseling to decide if it’s the right path for your debt relief journey.
Debt Management
Pros
- Combines multiple debts into a single structured payment
- May secure lower interest rates and reduce late-fee risk
- Builds positive payment history over time
Cons
- Often requires closing active credit accounts to prevent more debt
- Includes enrollment and monthly maintenance fees per account
- Completion can take three to five years for full results
How It Works
Texans who want to take the guesswork out of monthly bills can use debt management to simplify repayments. Many credit counselors offer debt management services that schedule customer payments.
Once you enroll in a debt management program, the organization sends monthly payments to your creditors using a savings account you pay into.
- 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, which includes various types of debts such as credit card balances, student loans, auto loans, and personal loans. - Resources
Discover how debt management plans (DMPs) work and if they’re the right fit for you.
Debt Consolidation
Pros
- Debt consolidation loans merge multiple debts into one manageable payment
- Balance transfer cards can eliminate or significantly lower interest costs
- Simplifies repayment and may improve credit over time
Cons
- Requires good credit to qualify for competitive loan terms
- Balance-transfer cards revert to high APRs after the intro period
- Potential fees can offset savings if repayment isn’t disciplined
How It Works
Lone Star residents who want to simplify multiple payments into a single one or pause interest fees to overcome modest credit card debt may want to consider consolidating their debt.
Texans have two basic ways to consolidate debt. The first is to take out a new debt consolidation loan large enough to cover all existing debts and switch to paying off a single large loan.
Another option is to open a zero-interest balance transfer credit card. This allows you to consolidate all balances onto one card and pay off the principal without incurring additional interest fees.
- Consolidation Loan 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 Cost
0% 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 the TurboDebt® resource library.
Debt Settlement
Pros
- Negotiates reduced payoffs, often saving 40–50% before fees
- Shortens repayment timelines compared to traditional methods
- Frees up cash flow once settlements are complete
Cons
- Not particularly effective for small or secured debts such as a mortgage
- Temporarily lowers credit scores during the settlement period
- Involves service fees after settlements are finalized
How It Works
Settling debt is an effective way to pay off unsecured balances faster, often for less than what you originally owed.
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.
- Cost
Legitimate 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
On average, Texans have $8,042 in credit card debt, which is a 5% increase from the year before. - Resources
Read about the process of debt settlement and how it helps consumers resolve their debts and regain financial stability.
Bankruptcy
Pros
- Offers a legal path to discharge or restructure most unsecured debts
- Stops creditor collection efforts immediately
- Provides a financial reset when all other options fail
Cons
- Stays on credit reports for up to ten years
- May require selling assets or following court-ordered repayment
- Limits access to new credit for years after filing
How It Works
Lone Star residents should consider bankruptcy as a last choice to relieve debt once other options have proved ineffective.
Most consumers file either Chapter 7 or Chapter 13 bankruptcy, which involves selling off assets to pay creditors or following a structured payment plan lasting about three to five years.
- 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
As of June 2025, Texas residents filed over 34,000 bankruptcy cases (PDF). This represents a 25% increase from the previous year in certain districts. - Resources
Understand how bankruptcy impacts your financial history and if it’s the right choice for your current situation.
What You Need To Know About Debt in Texas
The statute of limitations in the Lone Star State protects citizens and governs the rights of businesses to seek debt repayment. The length of time a debt is collectible gives a creditor up to that many years to seek legal action for debt repayment.
Statute of Limitations on Debt Collections in Texas
While Texans 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.
Here’s a look at the statute of limitations in Texas:
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 4 years |
| Promissory Notes (Mortgages) | 4 years |
| Open-Ended Accounts (Credit Cards, HELOCs) | 4 years |
| Oral Agreements | 4 years |
| Medical Debt | 4 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
- Temporary Assistance for Needy Families (TANF): This is a program run through the United States Department of Health and Human Services that provides cash payments to families for food, clothes, housing, and other living essentials.
- Texas Stimulus Checks: While these funds helped Texans through the pandemic, there are no new stimulus checks for Texas residents, and no news about them in the near future.
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
- Permanent Supportive Housing Program: This program helps those who are 18 or older find safe, affordable housing and learn the skills needed to live independently.
- Texas Rent Relief (TRR): TRR offers help to those who are homeless or at risk of homelessness with temporary rent and utility assistance.
- Homeless Housing and Services Program (HHSP): HHSP funds the nine largest cities in Texas to support the homeless or those at risk of becoming homeless.
Get Professional Help Paying Off Your Debt
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