The invoice went out in March. It aged past 30, then past 60. Your contact in accounts payable stopped replying around day 45, and the controller you escalated to says it is in the queue for the next check run — which is what she said last month. Payroll does not reschedule itself. So you start looking at collection agencies, and what you want to know is whether one will take this to court for you.
Short answer: no. A collection agency cannot sue on your behalf. It is not a law firm, and in Texas, representing another party in court is the practice of law — reserved to members of the state bar (Tex. Gov’t Code § 81.102(a)).
What happens when an account “goes legal” is narrower and more useful to understand. The agency refers the file to a licensed collection attorney. You engage that attorney. Suit is filed in your name. You are the plaintiff — you were always going to be the plaintiff. The referral does not hand your file off to someone else. It hands you a lawyer. Get that straight before you place anything, because “our legal department” and “we’ll take them to court” blur it constantly.
Why the answer is no
Only a lawyer can represent you in court. Section 81.102(a) of the Texas Government Code reads: “Except as provided by Subsection (b), a person may not practice law in this state unless the person is a member of the state bar.” Filing a petition for another party and prosecuting their claim is squarely that. An agency that promises to sue your debtor for you is describing something it cannot do.
Texas does not license collection agencies at all. What Texas requires is a bond. Under Tex. Fin. Code § 392.101(a), a third-party debt collector may not engage in debt collection without a surety bond, a copy of which must be filed with the secretary of state; subsection (c) fixes the amount: “The bond must be in the amount of $10,000.” A bond is not a license. A firm calling itself a “licensed collection agency” in Texas is claiming a credential the state does not issue. Collection attorneys are licensed — that is the real credential, and the one that matters the moment a file goes to suit.
So when you evaluate an agency, the useful question is not “do you sue?” It is: who signs the petition, and who is named as plaintiff?
What “going legal” actually looks like
Roughly, in order:
- Placement. You send the contract, invoices, proof of delivery, and correspondence trail. The fee arrangement is agreed in writing before anything is placed.
- Verification and investigation. The balance is confirmed, the debtor’s exact legal entity and registered agent are pulled, and asset and banking information is developed. This decides whether suit is worth filing later.
- Demand, contact, and negotiation. Written demand, phone pressure, and in many commercial files a visit to the debtor’s place of business. This is where the bulk of the work happens.
- The recommendation. If the file stalls and the debtor looks collectible, counsel is recommended. You decide.
- Referral to counsel. You sign a separate engagement with the attorney. Suit costs — filing fees, service, court costs — are their own line, distinct from the collection fee, and settled in writing up front.
- Litigation. You verify the petition, answer discovery, produce documents, and may be deposed or required to appear.
Step 6 is the one creditors underestimate. Suit converts a file you were outsourcing into a file that needs you.
The decision tree: should this account go legal at all?
Start with the clock. Suit on a debt must be brought not later than four years after the cause of action accrues (Tex. Civ. Prac. & Rem. Code § 16.004(a)(3)). An action on an open or stated account, or on a mutual and current account concerning the trade of merchandise between merchants, carries the same four-year period, and § 16.004(c) sets accrual at the day the dealings in which the parties were interested together cease — which can shift the date in a long supplier relationship. Accrual is fact-specific; confirm it with counsel rather than counting forward from the invoice.
Then branch on the debtor.
Branch A — the debtor is gone, or has nothing. Dissolved entity, dark phone, no property, no visible bank relationship. Suit here buys a judgment, not a remedy. A Texas judgment does not enforce itself; enforcement is a separate campaign with its own costs, as collecting a judgment in Texas lays out. Do the asset work first.
Branch B — the debtor is solvent and genuinely disputing. Short shipment, workmanship, scope, an offset they claim you owe. That is a merits problem, not a collection problem, and documentation decides it. Get it to counsel early rather than spending six months on demand letters a real dispute will absorb.
Branch C — the debtor is solvent and simply ranking you low. No dispute, just a payment queue you keep landing at the bottom of. Before you spend on a filing fee, spend on the investigation: a verified balance, a debtor who knows you have located their assets, and a demand with a credible next step behind it change the shape of the conversation.
Branch D — the debtor is solvent, silent, and has broken promises. Payment plans that lapse, calls that stop being returned, a company still operating and still paying other vendors. The classic referral candidate.
Suit is a tool, not a default setting. If you are still deciding whether to place the account at all, when to hire a debt collection agency and in-house collections versus an agency are the earlier fork.
Which Texas court would your case land in?
Jurisdiction turns on the amount in controversy. The ranges overlap on purpose.
| Amount in controversy | Where it can be heard | Authority |
|---|---|---|
| Not more than $20,000, exclusive of interest, where exclusive jurisdiction is not in the district or county court | Justice court | Tex. Gov’t Code § 27.031(a)(1) |
| More than $200 but not more than $20,000, exclusive of interest | Constitutional county court, concurrent with justice court | Tex. Gov’t Code § 26.042(a) |
| More than $500 but not more than $325,000, excluding interest, statutory or punitive damages and penalties, and attorney’s fees and costs | Statutory county court (county court at law), concurrent with district court | Tex. Gov’t Code § 25.0003(c)(1) |
| More than $500, no ceiling | District court | Tex. Gov’t Code § 24.007(b) |
Four things worth knowing about that table.
Two of those numbers moved recently. The justice court limit went from $10,000 to $20,000 under S.B. 2342, 86th Legislature, effective September 1, 2020, and it applies only to a cause of action filed on or after that date. The statutory county court ceiling went from $250,000 to $325,000 under H.B. 16, 89th Legislature, 2nd Called Session, effective December 4, 2025. Secondary pages still quote the old figures.
Justice courts cannot hear everything. Section 27.031(b) excludes, among others, a suit for trial of title to land and a suit for the enforcement of a lien on land. If your claim rides on a lien against the debtor’s real property, justice court is closed to that piece whatever the amount.
District court has a floor, not a ceiling. Its original jurisdiction covers civil matters where the amount in controversy is more than $500, exclusive of interest (§ 24.007(b)), and it may “hear and determine any cause that is cognizable by courts of law or equity” (§ 24.008).
Which county is a separate question. Venue generally lies where all or a substantial part of the events giving rise to the claim occurred, in the county of an individual defendant’s residence when the claim accrued, or in the county of a non-individual defendant’s principal office in Texas (Tex. Civ. Prac. & Rem. Code § 15.002(a)). A venue clause in your own terms may change that; whether it controls is a question for counsel, not a form. And because the legislature created county courts at law county by county, which bench actually takes a civil case is county-specific — ask the clerk where you would file.
Where your company can appear without a lawyer
Justice court, and the carve-out is statutory: “A corporation need not be represented by an attorney in justice court” (Tex. Gov’t Code § 27.031(d)). The rules say the same thing. Under Tex. R. Civ. P. 500.3(b), a corporation or other entity may be represented by an employee, owner, officer, or partner of the entity who is not an attorney, or by an attorney.
That deserves saying plainly even though it competes with placing the account: within the justice court limit, your controller can file and appear without hiring anyone. Above that line there is no matching provision — Rule 7 gives a party two ways to appear, in person or by an attorney of the court, and § 81.102(a) closes the gap.
One wrinkle trips people up. Rule 508 governs “debt claim” cases, but Rule 508.1 applies it to a claim for recovery of a debt brought by an assignee of a claim, a financial institution, a debt collector or collection agency, or a person or entity primarily engaged in the business of lending money at interest. A supplier suing on its own invoice, in its own name, is none of those. Your case runs under the ordinary justice court rules — Rules 500 to 507 — so much of what you will find online about “debt claim cases” describes a different track. It is also a reminder of what contingency placement is not: your claim stays yours, which is why you stay the plaintiff.
And no, the FDCPA is not your problem
Creditors often assume federal consumer-collection rules govern their file. Generally they do not. The FDCPA defines “debt” as an obligation of a consumer arising out of a transaction in which the money, property, insurance, or services are “primarily for personal, family, or household purposes” (15 U.S.C. § 1692a(5)). Texas Finance Code Chapter 392 draws the same line, defining “consumer debt” as an obligation, or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction (§ 392.001(2)).
An unpaid commercial invoice between two businesses is not that. Other law still applies — contract, fraud, tortious conduct — but the consumer-protection machinery is usually not the constraint on a B2B file. Commercial debt collection laws in Texas covers the rest.
What to have ready before you ask anyone to file
Pull these into one folder now. Every one gets asked for later:
- The signed agreement, purchase order, or accepted terms — including any venue, interest, or attorney’s fee provision
- All invoices and a current statement of account
- Proof of delivery, acceptance, or completion
- The correspondence trail, including any written acknowledgment of the balance
- Partial payments and any promise-to-pay
- Any personal guaranty
- The debtor’s exact legal entity name and registered agent from the Texas Secretary of State — not the name on the sign
That last one matters more than it sounds. Suing the wrong entity is unrecoverable time, and an entirely avoidable self-inflicted wound. On timing, when to send an account to collections is the companion piece to this one.
Alexander, Strauss & Associates works commercial accounts on contingency and, when a file warrants it, refers it to a licensed collection attorney in the debtor’s venue — see legal collections and contingency collections.
The useful next step, whoever you use: stop asking your debtor when they will pay and start confirming what they have. Verify the exact legal entity with the Secretary of State, calendar your four-year date from the correct accrual point, and get the documentation into one folder. Those three things decide whether suit is worth discussing, and they are worth doing this week.
General information for commercial creditors, not legal advice. Laws and deadlines change and depend on the facts — confirm specifics with qualified counsel.