Debt lawsuits up to $20,000 can now be filed in your local justice of the peace court, where the rules are simpler, the answer deadline is short, and Rule 508 governs debt claim cases.
Raised justice court civil jurisdiction under Government Code § 27.031(a)(1) from $10,000 to $20,000, exclusive of interest, for cases filed on or after September 1, 2020. The Supreme Court of Texas amended Rule 500.3 to match, so a debt claim case may seek up to $20,000, excluding statutory interest and court costs but including attorney fees.
- Citation
- Tex. S.B. 2342, 86th Leg., R.S. (2019), Acts 2019, ch. 696, § 32; Tex. Gov't Code § 27.031(a)(1); Tex. R. Civ. P. 500.3 (Misc. Docket No. 20-9070)
- Court or agency
- Texas Legislature
- Date
- September 1, 2020
- Law
- Texas law
Summary
S.B. 2342 was signed in June 2019 with a delayed effective date of September 1, 2020. It doubled the amount a justice court can hear and raised the ceiling for statutory county courts' concurrent civil jurisdiction to $250,000. The Supreme Court of Texas conformed the justice court rules in Misc. Docket No. 20-9070.
Background
Justice of the peace courts are Texas’s neighborhood courts. Since 2013 they have handled four kinds of civil cases under Part V of the Texas Rules of Civil Procedure: small claims, debt claim cases, repair-and-remedy cases, and evictions. A “debt claim case” under Rule 500.3(b) is a suit to recover a debt brought by an assignee, a debt collector or collection agency, a financial institution, or a business primarily engaged in lending money at interest. Rule 508 sets special rules for those cases.
Until 2020 the justice court limit was $10,000, so larger card balances and loans went to county or district court.
What changed
S.B. 2342 (86th Legislature, 2019) amended Government Code § 27.031(a)(1) so that justice courts hear civil matters in which the amount in controversy is not more than $20,000, exclusive of interest. Section 36 of the bill applied the change only to cases filed on or after the effective date, and section 37 set that date at September 1, 2020.
The same bill raised the upper limit of statutory county courts’ concurrent civil jurisdiction from $200,000 to $250,000 and directed the Supreme Court to adopt rules for faster, cheaper resolution of cases in county courts at law.
On May 26, 2020, in Misc. Docket No. 20-9070, the Supreme Court of Texas amended Rule 500.3 to raise the limit for small claims, debt claim, repair-and-remedy, and eviction rent claims from $10,000 to $20,000, “excluding statutory interest and court costs but including attorney fees, if any,” effective September 1, 2020. The amended rule repeats that debt claim cases are governed by Rules 500 through 507 and Rule 508, with Rule 508 controlling in a conflict.
Our take
The change moved a large share of consumer debt litigation into justice court. That has some benefits for consumers: filing fees are lower, the courts are local, and Rule 508 requires a debt claim plaintiff to plead specific information about the account and the assignment chain. But justice court also moves fast. The answer deadline is generally the end of the 14th day after service, and many defendants never file one.
Note that the $20,000 limit includes attorney fees. A plaintiff seeking a balance plus fees above that amount must file elsewhere.
What it means if you’re sued in Texas
Look at the top of your citation to see whether you were sued in a justice court, county court, or district court. The deadlines and procedures differ. In justice court, a written answer filed on time keeps the plaintiff from getting a default judgment and preserves your defenses, including limitations and challenges to the plaintiff’s proof that it owns the debt. A free case review is available if you would like help understanding your deadline and options.
Takeaway
Many credit card and personal-loan suits that once went to county court now land in justice court. Read your citation carefully, note which court you are in, and calendar the answer deadline right away.
Sources
Primary authority
- S.B. 2342 enrolled bill text (Texas Legislature Online)
- S.B. 2342 bill history (Texas Legislature Online)
- Misc. Docket No. 20-9070, order amending Tex. R. Civ. P. 47, 500.3, 509.2, and 509.6 (Supreme Court of Texas)
- Texas Government Code chapter 27, including § 27.031 (Texas Constitution and Statutes)
Secondary sources
This summary and analysis are general information, not legal advice. Later decisions, amendments or agency actions may change the law; check the current status before relying on it.