Texas Demand Letter

Introduction

Key Things to Know

1. 1

   If you are a DTPA consumer (an individual or a business that bought or leased goods or services, other than a business with assets of $25 million or more, per Section 17.45(4)), Texas Business and Commerce Code Section 17.505(a) requires written notice at least 60 days before you sue for damages under the Deceptive Trade Practices Act, stating your specific complaint and a dollar amount of damages and fees.

2. 2

   For claims on rendered services, performed labor, furnished material, or a sworn account or contract, this letter can serve as presentment under Civil Practice and Remedies Code Section 38.002, starting that section's 30-day clock for recovering attorney's fees; this presentment rule does not apply to claims against a quasi-governmental entity, a religious organization, a charitable organization, or a charitable trust (Section 38.001(b)).

3. 3

   A demand letter must never threaten arrest or criminal prosecution to collect a consumer debt. The Texas Debt Collection Act, Finance Code Section 392.301, provides that a person collecting consumer debts, including a creditor collecting its own, may not threaten arrest for nonpayment without proper court proceedings (Section 392.301(a)(5)), and may not threaten a criminal charge or action against a debtor who has not violated a criminal law (Section 392.301(a)(6)).

4. 4

   Business and Commerce Code Section 3.506(b) and Penal Code Section 32.41 do not provide civil multiplied damages for a dishonored check; the only fixed civil add-on found in those statutes is a processing fee capped at $30 (Section 3.506(b)), which may not be charged if a reimbursement fee was already collected under Code of Criminal Procedure article 102.007(e). Section 32.41's bad-check notice is a criminal mechanism, not a civil collection tool.

5. 5

   Texas gives four years to sue on a debt, an open or stated account, or most contract claims (Tex. Civ. Prac. & Rem. Code Sections 16.004(a)(3), (c) and 16.051), and two years to sue for injury to property (Section 16.003(a)).

6. 6

   If the parties never agreed on a rate, Texas Finance Code Section 302.002 lets a creditor charge legal interest of 6 percent a year starting on the 30th day after the amount is due; an agreed contract rate is capped at 10 percent a year absent other statutory authority (Section 302.001(b)).

7. 7

   Texas justice court hears civil matters of not more than $20,000, exclusive of interest, where exclusive jurisdiction is not in the district or county court (Tex. Gov't Code Section 27.031(a)(1)).

Texas Requirements for Demand Letter

• DTPA 60-Day Pre-Suit Notice

  Texas Business and Commerce Code Section 17.505(a) requires a consumer to give written notice at least 60 days before filing suit for damages under the Deceptive Trade Practices Act, stating the specific complaint and the dollar amount of damages and fees claimed. Skipping the notice lets the defendant automatically abate the suit under Section 17.505(d) until 60 days after proper notice is given.

• DTPA Notice Has No Mandated Delivery Method

  The DTPA notice statute does not itself require certified or registered mail; it requires only written notice given at least 60 days before suit (Tex. Bus. & Com. Code Section 17.505(a)). Sending it by a method that proves delivery and the date sent still protects the sender if the notice period is later disputed.

• CPRC 38.001-.002 Attorney's-Fee Presentment

  For claims on rendered services, performed labor, furnished material, or a sworn account or contract, presenting the claim and waiting 30 days for payment under Texas Civil Practice and Remedies Code Sections 38.001(b) and 38.002 is a condition to recovering attorney's fees on that claim. This presentment rule excludes claims against a quasi-governmental entity, a religious organization, a charitable organization, or a charitable trust (Section 38.001(b)).

• DTPA Settlement-Offer Damages and Fee Cap

  Under Business and Commerce Code Section 17.5052, a recipient of DTPA notice may tender a written settlement offer within set statutory windows; if the offer's damages amount is the same as, substantially the same as, or more than the eventual verdict, the consumer's recovery is capped at the lesser of the offer or the verdict, and recoverable attorney's fees are limited to those incurred before the offer was rejected (Section 17.5052(g)-(h)).

• Debt Collection Act Bars Threats and Deception

  The Texas Debt Collection Act, Finance Code Section 392.301, bars threatening arrest without proper court proceedings, or a criminal charge or action against a debtor who has not violated a criminal law, to collect a consumer debt, including by a first-party creditor collecting its own debt; Section 392.304 bars specific deceptive practices in a collection demand. A violation is also a deceptive trade practice under Section 392.404(a).

• Dishonored Check: Fee, Not a Multiplier

  Business and Commerce Code Section 3.506(b) and Penal Code Section 32.41 do not provide civil multiplied damages for a dishonored check; the only fixed civil add-on found in those statutes is a processing fee capped at $30 (Section 3.506(b)), barred if a reimbursement fee was already collected under Code of Criminal Procedure article 102.007(e). The Penal Code Section 32.41 bad-check notice is a separate criminal mechanism, not a civil collection tool.

• Four-Year Limit on Debt and Contract Claims

  Texas gives four years to sue on a debt, an open or stated account, or a claim with no other stated limitations period (Tex. Civ. Prac. & Rem. Code Sections 16.004(a)(3), (c) and 16.051), and two years to sue for injury to property (Section 16.003(a)).

• Legal Interest Runs 30 Days After the Debt Is Due

  Where the parties have not agreed on a rate, Texas Finance Code Section 302.002 lets a creditor charge 6 percent legal interest a year beginning on the 30th day after the amount is due; an agreed contract rate is capped at 10 percent a year absent other statutory authority (Section 302.001(b)).

• Justice Court Venue and $20,000 Limit

  A Texas small claims case is heard in justice court, whose civil jurisdiction reaches an amount in controversy of not more than $20,000, exclusive of interest, where exclusive jurisdiction is not in the district or county court (Tex. Gov't Code Section 27.031(a)(1)).