TX HB4238

Prohibits creditors, debt collectors, and third-party debt collectors from attempting to collect consumer debt that resulted from identity theft when a consumer provides a court order declaring them an identity theft victim

Requires debt collectors to cease collection efforts within 7 business days of receiving notice of identity theft and to notify any parties who previously received reports about the debt that it is disputed and not collectible from the victim

Bars the sale or transfer of identity theft-related debt for consideration, except to collect from the actual perpetrator or another responsible person other than the victim

Allows creditors to enforce security interests on tangible personal property securing the disputed debt but prohibits collecting any deficiency from the identity theft victim

Does not apply to home loans or the collection of judgments already obtained; takes effect September 1, 2025