I live in Texas. I have an outstanding debt for collection of an unpaid balance on a car loan.

The car was totaled in a wreck and the insurance company paid all but ~$6k. The car loan company (Chrysler Financial) sent me a letter on July 9, 2004, requesting me to pay the remaining balance in full within 10 days or I'd be sent to collections. Chrysler did not send it to collections until Nov 11, 2004.

The reason I've explained this is because the SoL (Statute of Limitations) in Texas is 4 years on "bringing suit" for "debt" (Texas Civil Practice & Remedies Code - Section 16.004. Four-Year Limitations Period). I've also researched when the start of the SoL would occur on a debt and so far what it states is at the "cause of action" on the debt. I referenced what I'm thinking is the "cause of action" in my prior paragraph, July 9, 2004 plus 10 days.

I received a notice from the courts this last week, on a "Prove Up" hearing on August 12, 2008, signed July 30, 2008. I am assuming I am being sued but I have not received any notification of a lawsuit or judgement of a lawsuit.

My questions are:
1. Am I correct in my interpretation of the SoL on the start date of the SoL?
2. If I've already been 'sued' but no judgment has been made yet, has the SoL run out and can the lawsuit be invalid now?
3. If the debt collection agency's law suit is considered valid and within the SoL then what happens if judgement is passed? Can I still settle outside of court?