2026 Best Business Debt Settlement Lawyers in Houston, Texas

Best Business Debt Settlement Lawyers in Houston for 2026

HB 700

The Legislature weighed in with HB 700 (added to the Finance Code at Chapter 398), which means you are not entirely on your own. Under HB 700, merchant cash advances aren’t illegal or price-capped in Texas. Now all new auto debits need a funder’s first-priority perfected lien. The law lets only one creditor hold first priority at a time, so second and third funders’ daily ACH debits are often on shaky ground. You cannot sue them under that law, but the OCCC can hit them $10,000 per violation, which is good leverage for settlement.

Texas banned pre-suit confessions of judgment for decades, but HB 700 added one new wrinkle. If a MCA contains a confession or a ‘similar provision’, Texas will treat the whole contract as void. So far, that word similar hasn’t seen the light of day in court. By the end of this year, all direct funders and brokers need to register in Texas. If a MCA is backed by an unregistered funder, the funder faces regulatory exposure, so that can be a point of leverage for settlement.

In Texas, usury depends on whether the MCA is really a loan. Courts look at things like reconciliation, term and recourse, and if you win you get three times the excess interest. If a merchant cash advance is a loan, Texas usury limits generally float 18-24% per year. That ceiling can reach 28% for business credit, but common annualized MCA pricing exceeds that. Usury is a lever, but not an automatic win. Also, you must give written notice at least 61 days before suing and the funder can cure. Courts usually honor savings clauses. Catch: most Texas MCA contracts choose New York law, and courts generally honor that unless it breaks fundamental Texas policy. But what’s fundamental in one case may be okay in another. It can feel like a judge just picks a result, but lawyers know what factors matter.

Must File a Written Answer

This part gets very tricky. If you are sued in county or district court, you must file a written answer by 10 a.m. on the Monday after 20 days. If not, the court may enter a default judgment against you. Your written answer will keep your defenses alive. By waiting, you lose your best defenses to non-payment: usury, fraud and the confession-of-judgment rule. A judgment from New York can be filed in Texas and counts as final on the day of filing. If you want to dispute it you have 30 days to file a motion for new trial. The lesson here is not to wait for the bank account freeze. If a creditor freezes your business bank account after getting a Texas judgment, you’ll need a sworn motion to dissolve the writ of garnishment. Ask for an early hearing and the court will give you a date. Under Texas law a business account has no exemption.

Old debts are a lingering hazard for you too. Texas generally gives a creditor 4 years to sue on a debt, but that assumes that the creditor is not using a contract clause to trigger New York law. The real deadline can be buried in the small print.

Your attorney will generally seek to draw a line in the sand, and the least formal way to start the process is to make a documented reconciliation request. If you have the contract, they’ll check it under HB 700’s new provision about MCAs under Chapter 398. In many cases that prompts a workout.

Finding a lawyer you trust is a big deal, as you want an expert you can stick with. You can screen and vet a list of your own, but a referral service can get you started. Try the Houston Lawyer Referral Service, a nonprofit that’s been connecting local residents with screened attorneys since 1958. Searches are by practice area, and a 30-minute first consultation runs $20. It can help you find a lawyer if you are in Harris, Montgomery, Fort Bend, Brazoria or Galveston county. When vetting a name, start with the State Bar of Texas Find-a-Lawyer directory. It shows license history and any public grievance history. And board certification requires five years in full-time practice, so just be sure the listed specialty is the right fit. Written contingent fee agreements in Texas must list the attorney’s share of any recovery, the way the fee will be calculated and any expenses that may come out of your share. These are requirements for any contingency contract under Texas Rule 1.04(d).

The terms you want in any settlement call for the MCA to become paid off by your reduced payments or a discounted lump sum. That requires a UCC-3 termination and dismissal of any suit. Once your payoff has cleared, the funder must file or send you the UCC-3 termination within 20 days after you put that in writing. Under the federal tax code, the forgiven part of a debt is generally income unless it is discharged in bankruptcy. Another exception is insolvency.

If you’ve signed a personal guarantee, the first thing you need to know is that Texas has strong debtor protections. Texas protects the homestead, up to $50,000 in personal property for a single person ($100,000 for a family) and retirement accounts. Just know that you generally must claim them.

If talking just does not work, Subchapter V Chapter 11 bankruptcy may offer a fresh start. The automatic stay halts debits, lawsuits and garnishments the moment you file, and the debt limit is $3,424,000. This limit may change. Congress passed H.R. 7730 in September 2026 to restore the $7.5 million limit. The new measure applies only to cases filed after it becomes law. The filing fee is $1,738. Even in bankruptcy, in the Fifth Circuit, which covers Texas, the funder can still pursue fraud claims. It matters what is said in MCA applications. ‘No bankruptcy anticipated’ statements count.

Mistakes to avoid: telling the bank that authorized debits were unauthorized and moving money to a new entity or relative’s account (a fraudulent transfer).

The bottom line is that the best MCA lawyer is the one who’s licensed in Texas, knows these Texas rules, checks out, and puts any agreement in writing.