Business Debt Relief in Houston

A Houston business owner with merchant cash advance debt can start by gathering every contract, three months of bank statements and a list of each debit, then talking with a Texas attorney and taking a free, confidential first conversation to see the options. Texas spells out what a judgment creditor can and cannot reach, and a fixed debit is set by the contract, not by the weather. The midnight worry is simple: money leaves whether sales came or not.

Picture an owner like Ray, a composite who runs a nine-person pipe-fitting and insulation shop out of Pasadena. His crews work turnarounds at plants along the Ship Channel, and the checks arrive in lumps, and some come long after the job closes. When a plant pushed back a start date, Ray took an advance for $50,000 to cover payroll. A second followed when a supplier tightened terms, and a third paid off part of the second. Today the three debits add up to $1,100 every business day, against deposits of about $210,000 in a decent month. Ray is not careless. He is a good tradesman who borrowed against next month to pay this month.

This page is for owners like Ray in Houston, Pasadena, Sugar Land, The Woodlands, Katy, Baytown and the towns between. It covers the Texas rules on exemptions, wages and turnover orders, where a lawsuit would be filed, what two hurricanes did to cash flow, and the costs that come ahead of a funder. Hamilton & Merchant is based in Orlando, Florida, has no office in the Houston area, and holds its first conversations by phone.

Which Houston businesses feel a fixed daily debit first?

The ones whose cash arrives in lumps or depends on weather, plant schedules and ships: specialty trade contractors, restaurants, haulers, and clinics waiting on insurers. Metro Houston has about 7.9 million residents and 175,617 business establishments, and the Bureau of Labor Statistics counted 3,489,400 nonfarm jobs in September 2026, up 1.0% over twelve months, with unemployment at 4.6%.

Construction is where the growth sits. It stood at 269,300 jobs in September, up 5.4%, and the Greater Houston Partnership counts 123,155 of the metro’s 257,620 construction workers in specialty trades such as plumbing and electrical. Energy is large and uneven. The Partnership estimates 221,947 jobs in selected energy and related industries, the metro holds 11 refineries and 41.1 percent of the nation’s base petrochemical capacity, and yet the Dallas Fed puts oil and gas employment in July 2026 down 1.1 percent, about 800 jobs, from a year earlier while exports through the Houston-Galveston port district rose 17.5 percent to $26.6 billion in June. Busy docks and thinner payrolls can sit side by side, and a small supplier can feel both.

Freight carries its own swings. The Ship Channel moved 65 million short tons in the first quarter of 2026, up 12 percent, yet Port Houston’s April container volume of 353,319 TEUs came in 9 percent below April 2025. A month like that shows how quickly volume can shift for the people hauling those boxes, as the trucking and logistics page explains. A contractor waiting on plant payments has a different rhythm, covered on the contractor page, and a restaurant sees cash nightly but carries food, labor and rent against it, which the restaurant page describes. Leisure and hospitality, the group that includes restaurants, held 368,000 jobs in September, up 0.6%.

How did Hurricanes Harvey and Beryl change cash flow for Houston businesses?

Both storms could stop sales for days while rent, payroll and fixed debits kept their dates. Harvey in 2017 flooded at least 160,000 structures in Harris and Galveston counties, and Beryl in July 2024 left more than 2.6 million Texas households and businesses without power at the peak, with hundreds of thousands still dark a week later.

Harvey’s highest rainfall total was 60.58 inches near Nederland. It caused at least 68 direct deaths in Texas, 36 of them in Harris County, and carries a NOAA damage estimate of $125 billion. Across southeastern Texas more than 300,000 structures flooded, as many as 500,000 cars, and about 336,000 customers lost power. A shop that took on three feet of water has no sales to count. That is a flood problem first and a debit problem second, and it belongs with the owner’s insurance agent and attorney.

Beryl was a different kind of disruption. It came ashore near Matagorda at 4 a.m. on Monday, July 8, 2024, as a Category 1 hurricane, yet Houston-area stations recorded unofficial gusts of 83 to 89 mph and the surge reached 8.79 feet above the tidal datum at Manchester in Harris County. A restaurant or shop could come through with its building intact and still lose its power. The region’s electric utility told the Public Utility Commission that as many as 500,000 customers could still be without power a week after landfall, and the commission’s November 2024 report flagged problems with communication to customers and other utilities. By late July 2024 at least 23 people had died from the storm and the outages. A kitchen that cannot refrigerate food or run a register has no revenue until the lights return, whether or not the building was touched.

Hurricane season runs June 1 to November 30, the peak threat for the Texas coast falls in August and September, and hurricanes have struck the Texas coast in every month of the season. The more useful question for an owner paying a daily debit is what a lost week does to the arithmetic, which the next chapter works through.

Beryl never read anybody’s contract, and no contract reads the forecast. That gap is where Houston owners get hurt.

What does a week without power do to a fixed daily debit?

It can turn a manageable cost into a cash squeeze in a few days, because the debit is set by the contract and the sales are set by the weather. Here is a hypothetical with round numbers.

Take Marisol, a composite owner of a family restaurant in Katy. In a normal week she deposits about $21,000 over six days, pays $8,000 in payroll, and owes one advance debit of $450 each business day. A storm knocks out the power Monday through Thursday, and she reopens Friday and deposits $1,500. The schedule does not change: five business days at $450 is $2,250. In a normal week that debit is about 11 percent of deposits. In the storm week it is 150 percent of deposits, and payroll for a staff that could not work is still on the calendar.

Three steps are worth taking with a picture like that, and none of them is dramatic. Read the contract for a reconciliation clause; some advances let the owner ask for the daily amount to be adjusted to actual sales, and the reconciliation guide shows what to look for. Find out what the bank charges when a debit lands on a short account. And price the advance in dollars with the MCA cost calculator, because a storm week magnifies a cost that was already there.

Missing debits is not a plan. A missed or stopped payment can put an advance in default, and default carries four risks: a lawsuit, added fees, damage to credit, and a claim on any personal guarantee. The quieter version of this squeeze is a slow season, which the slow-season guide covers. Owners on the Florida side of the Gulf face the same calendar, and the Tampa Bay page covers that market.

What does Texas law say about merchant cash advances?

Texas added Chapter 398 to its Finance Code through House Bill 700, effective September 1, 2025. It covers providers and brokers of commercial sales-based financing, requires registration with the Office of Consumer Credit Commissioner and written disclosures on specific offers under $1 million, makes a confession-of-judgment clause in these contracts unenforceable, and limits when a provider may set up an automatic debit of a deposit account. The state administers it, the civil penalty is $10,000 per violation, and the chapter creates no private right of action. The filing dates are on our Texas HB 700 deadline page.

The Dallas-Fort Worth page walks through the chapter section by section, so I will not repeat it here: see the Dallas-Fort Worth page, and the state MCA laws study for how Texas compares with other states. The product is still sold as a purchase of future receivables, and a court reads the actual terms of a given contract to decide how to treat it.

Where could a funder file a lawsuit against a Houston business?

In one of three kinds of Texas court, depending on the size of the claim, or somewhere else if the contract names another place. The next chapters take up forum clauses; this one covers the Texas courts.

• Justice courts. Harris County has eight justice court precincts with two courts each, sixteen in all. Texas justice courts hear civil matters of not more than $20,000, not counting interest.
• County civil courts at law. A statutory county court shares jurisdiction with the district court over civil cases above $500 and up to $325,000, not counting interest, penalties, attorney’s fees and costs. That ceiling took effect December 4, 2025, through House Bill 16 of the second called session, for cases filed on or after that date. The earlier ceiling was $250,000, and a court’s own materials may still show it, so check the statute and the court before relying on either number.
• District courts. They hear the same range concurrently with the county courts at law, and the Harris County District Clerk runs a records search and a docket search on its website.

The metro covers ten counties, so a business in Fort Bend, Montgomery or any other county should check the clerk for the county where it sits, not only Harris. The county’s justice court site has a “Find Your Case and Court Date” tool. A search is worth doing before any phone call about the advances.

What happens in the first weeks after a Houston owner is served?

The clock starts at service. A Texas citation in a district or county court directs the defendant to file a written answer by 10:00 a.m. on the Monday next after the twenty days have run, and it warns that a default judgment may be taken if no answer is filed. Read the date printed on the citation itself.

Missing that Monday can let the other side ask for judgment on what it alleged without hearing from you. Don’t let the sun set on a citation. Get a Texas-licensed attorney the same week, and use the lawsuit guide to understand what the papers mean. Ignoring them is the one move that makes every later option harder.

Does a New York forum clause or a confession of judgment matter in Houston?

Both can matter, and Texas has spoken on each. Civil Practice and Remedies Code Section 30.001 says that in an instrument executed before suit is brought, a person may not accept service and waive process, enter an appearance in open court, or confess a judgment. Chapter 398, effective September 1, 2025, separately makes a confession-of-judgment clause in a commercial sales-based financing contract unenforceable; whether that reaches a contract signed earlier is a question for the owner’s Texas attorney. The confession-of-judgment guide covers the clause in general.

Forum clauses are a different matter. In the Texas case In re AIU Insurance Co., a 2004 insurance case, the Texas Supreme Court enforced a clause naming New York, said the party resisting it carries a heavy burden, and held that mandamus was available because an appeal was no adequate remedy. It was not an advance case, so it settles nothing about any one contract, but it shows that a Texas court can send a dispute elsewhere when the contract names another state. Whether a particular clause holds is a question for the owner’s own Texas attorney.

If a judgment is entered in another state, a creditor can file an authenticated copy with a Texas clerk under Chapter 35, and it then carries the same effect and procedures as a Texas judgment. The creditor files an affidavit and promptly mails the debtor notice of the filing, and a debtor who shows an appeal is pending and furnishes the required security is entitled to a stay of enforcement. The out-of-state judgment guide covers the practical side.

How does a judgment creditor reach a bank account in Texas?

Through a writ of garnishment served on the bank, which Texas allows after a judgment and, on an affidavit, in some pending suits on a debt; after a judgment, also through a turnover order or a receiver. Chapter 63 of the Civil Practice and Remedies Code allows a writ for a plaintiff who holds a valid, subsisting judgment and files an affidavit that the defendant has no Texas property subject to execution sufficient to satisfy it. For the pending-suit version the plaintiff files an affidavit that the debt is just, due and unpaid, that the defendant has no sufficient reachable Texas property, and that the writ is not sought to injure anyone.

The clerk of a district, county or business court, or a justice of the peace, issues the writ. Once it is served, the bank may not pay the defendant. The Finance Code adds that a claim against a customer, which includes a writ of garnishment, must be served at the address the bank designated for its registered agent, and the customer is the one who must seek a restraining order, injunction, protective order or other remedy to limit the bank’s compliance. The practical point is that the bank follows the writ and the account holder has to go to court to limit it. The frozen account guide covers the next steps.

A turnover order is a separate tool. Under Section 31.002 a judgment creditor can ask a court to order the debtor to hand nonexempt property to an officer for execution, to apply it to the judgment, or to appoint a receiver who takes possession of nonexempt property, sells it and pays the creditor. A court may not order turnover of the proceeds of property exempt under a statute, and a receiver’s rights over the debtor’s bank accounts attach only when the bank is served with a certified copy of the order. The seizure guide lists what else can come into play. That is a lot of machinery, but each piece has a trigger: a judgment, an affidavit, a served writ. The word “nonexempt” carries the weight, which is why the next chapters read the exemption lists closely.

What does the Texas homestead protect?

The Texas Constitution protects the homestead of a family or a single adult from forced sale for the payment of debts, with listed exceptions, and Property Code Chapter 41 puts a size on it. An urban homestead can be up to 10 acres; a rural one up to 200 acres for a family or 100 for a single adult.

The Property Code describes an urban homestead as land used as an urban home, or as both an urban home and a place to conduct a business or calling. “Urban” has its own definition: inside a municipality, its extraterritorial jurisdiction or a platted subdivision, with police and fire protection and at least three of electric, gas, sewer, storm sewer and water service. In a metro of 128 separate cities and 37 census-designated places, whether a given property meets that test is a fact question for an attorney.

The constitutional text lists exceptions: the purchase money, the taxes due on the property, an owelty of partition, a refinance of a lien against the homestead, and work and material used in constructing new improvements, along with provisions for certain home-equity and reverse-mortgage credit. The proceeds of a sold homestead are not subject to seizure for a creditor’s claim for six months after the sale.

A homestead provision speaks to the house. It says nothing about whether an owner signed a personal guarantee, and the guarantee is what puts personal assets in the conversation; the personal guarantee guide explains the clause. This page describes what the Texas texts say. It does not tell any reader that a home is safe, and a Texas attorney decides how the law applies to a given household.

What do Texas property exemptions protect for a business owner?

Chapter 42 of the Property Code lists personal property that is exempt from garnishment, attachment, execution or other seizure up to an aggregate fair market value of $100,000 for a family and $50,000 for a single adult who is not part of a family. The list includes tools, equipment, books and apparatus, including boats and motor vehicles used in a trade or profession, plus home furnishings, wearing apparel, provisions for consumption, two firearms, and a vehicle for each family member or single adult who holds a driver’s license.

Two features matter for an owner. A security interest or a lien fixed by other law is not avoided on the ground that the property is exempt, so a lien on equipment is not erased by the exemption. And the text is written about property provided for a family or owned by a single adult. How it applies to equipment titled in an LLC’s name is a question for the owner’s own Texas attorney.

Wages are the clearest line. The Constitution says current wages for personal service are not subject to garnishment, except to enforce court-ordered child support or spousal maintenance, and the garnishment chapter repeats the rule, subject to what other state or federal law provides. Whether money an owner pays himself or herself from the business fits the phrase “wages for personal service,” and for how long after it is paid, is also a question for the owner’s attorney. The debtor rights guide covers the general picture.

Texas publishes its lists in the open, which is useful. The risk is leaning on the list without reading the exceptions.

Read the list, then read the exceptions. In Texas the exceptions are where the trouble lives.

How long does a Texas judgment last?

A judgment lien on real property in a county lasts 10 years from the date the abstract is recorded and indexed, and it ends sooner if the judgment goes dormant. A judgment from a court of record or a justice court becomes dormant if no writ of execution issues within 10 years, and a second writ must follow within 10 years of the first. The lien does not attach to property exempt under Chapter 41, the Constitution or other law. Ten years is a long road for a small business, and waiting it out is not a plan.

Which Houston costs come ahead of a funder?

Sales tax comes first, because the owner holds it for the state. Texas charges a 6.25 percent state rate and allows up to 2 percent in local tax, for a combined ceiling of 8.25 percent. The City of Houston levies 1 percent and the Houston transit authority 1 percent, so a sale inside Houston reaches that ceiling; confirm the rate for your own address with the Comptroller. Monthly returns are due on the 20th of the following month. Tax Code Section 111.016 says collected tax is held in trust for the state and that an individual who controls collection or payment and wilfully fails to pay it can be personally liable. The guide to the creditor you pay first explains why, and the advance tax guide covers how advances show up on a return.

Payroll has a Texas quirk. The state lists no wage floor of its own above the federal $7.25 an hour, so the market sets the pay scale rather than a state schedule. Workers’ compensation is optional for private employers, who may choose whether to carry it, and those that do not must report injuries with more than one day of lost time to the Division of Workers’ Compensation. For a contractor with a crew, an uninsured injury is a cost nobody scheduled.

Property tax changed in 2026. House Bill 9 raised the Tax Code exemption for income-producing business personal property to $125,000 of appraised value, effective January 1, 2026, on voter approval of the constitutional amendment, which passed on November 4, 2025. How the exemption applies to a company with several locations is worth confirming with the appraisal district before any budget leans on it.

Which free resources help Houston business owners?

The University of Houston’s Small Business Development Center network offers no-cost, confidential business advising, and its Houston center at 1455 West Loop South, Suite 900, serves central and north Harris County. The Houston Lawyer Referral Service, sponsored by the Houston Bar Association and nine other local bar associations, provides free referrals and lists an initial 30-minute consultation for a reduced fee of $20; confirm the fee when you call.

Neither is a debt-relief program, and Hamilton & Merchant is not affiliated with either. They are places to get a business plan reviewed and a lawyer’s first look, and the vetting guide helps with any company that approaches you later.

When should a Houston owner get help with merchant cash advance debt?

When the debits begin deciding what gets paid. Earlier is better than later, because options narrow after a default notice or a lawsuit. These are the signs I would take seriously:

• A new advance is covering the last one, or a broker is pitching a “consolidation” of several into one.
• Payroll or sales tax is running late to keep a debit whole.
• The account is short on debit days and the bank is charging for it.
• A default notice, a collector’s call or court papers have arrived.
• After a storm or a lost contract, deposits sit well below the level the debits assumed.

Hamilton & Merchant, based in Orlando, holds a free, confidential first conversation by phone. It is a chance to lay out the advances, the debits and the deadlines, and to understand which kind of help fits: an attorney for a lawsuit or a guarantee, a CPA for taxes, or a settlement program for the advances themselves. Hamilton & Merchant is not a law firm or a CPA firm, and nothing here is legal or tax advice. The how it works page describes the conversation, and the relief page lays out the kinds of help.

In a settlement program the regular payments can stop while each funder is negotiated, and that puts the advances in default. Default carries four risks: a lawsuit, added fees, damage to credit, and a claim on any personal guarantee. Some funders agree to a settlement and some don’t, and results vary. That is why the decision belongs to the owner, with a Texas attorney and a CPA at the table, and not to a stranger on the phone. The lawyer-or-company guide and the agency-finding guide help with that choice.

What to bring

• Every advance contract, including renewals and amendments.
• The last three months of business bank statements.
• A list of each advance with its start date, amount, daily or weekly debit and balance.
• Any court papers, default notices or letters from a collector.
• The most recent sales tax return, if the business files one.

• Good help does this

  • Puts every term in writing and says who is licensed, and in which state.
  • Sends you to your own attorney for lawsuits and guarantees.
  • Asks to see the contracts before saying anything about them.
  • Keeps taxes and payroll in the picture.

• Good help never does this

  • Promises a result or quotes a number before reading the contracts.
  • Charges before any work is done.
  • Tells you to ignore a lawsuit.
  • Pushes you to act on your bank account or debit authorizations before you have spoken with your own attorney.

If you want a quick read before you call, the free MCA diagnostic takes a few minutes. When you are ready to talk, call (407) 993-1416.

What to do this week

None of these steps needs a stranger’s help. Work down the list and stop where something turns up.

1. Gather the contracts, the last three months of statements and the one-line-per-advance list from the note above.
2. Search your business name and your own name on the Harris County District Clerk’s records search and on the county’s justice court case finder. For another county, use that county’s clerk.
3. If you are holding a citation, write down the answer date printed on it (for a district or county court it is 10:00 a.m. on the Monday after the twenty days run), and call a Texas-licensed attorney that day.
4. Pull your last sales tax return, note the 20th as the due date, and keep the tax you collected apart from operating cash.
5. Call your insurance agent and ask in writing what the policy says about lost income when the power is out, and photograph equipment and inventory before the next season opens June 1.
6. Start the cushion described in the 90-day cash reserve guide, even if the first deposit is small.
7. Book the free, confidential first conversation with Hamilton & Merchant by calling (407) 993-1416.

Questions owners in Houston ask