Post Judgment Collection Texas Protecting Assets and Recovery

In Texas, protecting assets from post-judgment collection can be a complex process, but it's essential to understand the laws and procedures that govern it.

If a defendant has transferred assets to a third party, such as a family member or friend, the creditor may be able to reach those assets through a process called "piercing the veil."

The Texas Business Organizations Code allows creditors to pursue assets transferred to a third party if the transfer was made with the intent to defraud creditors.

A defendant's ability to protect assets is also limited by the Texas Uniform Fraudulent Transfer Act, which prohibits transfers made with the intent to defraud creditors.

Serving post-judgment discovery is a critical component in obtaining payment on the judgment and should be done before collection attempts commence.

Judgment creditors can use as many interrogatories as possible and requests for production that ask for information regarding the judgment debtor's assets for collection purposes.

Post-judgment discovery includes typical discovery methods, such as requests for production, interrogatories, requests for admissions, and depositions.

The rules which typically limit the scope of these requests in a pre-judgment setting are not applicable in post-judgment discovery.

Sanctions for failure to answer discovery include payment of judgment creditor's attorney's fees, fines, and possible jail time for failing to follow a court order.

We can also file an abstract of judgment for you which places a "judgment lien" on the property for enforcement of the judgment debt.

The abstract of judgment and lien last ten years, and there is no limit to the number of counties that we can file an abstract of judgment in.

A writ of garnishment is particularly useful in situations where the debtor does not have enough real or personal property to satisfy your judgment against them.

Accounts subject to a writ of garnishment can include not only bank accounts, but also some investment accounts.

The purpose of the abstract judgment is to put the public on notice that the judgment attaches to the judgment debtor's non-exempt real property.

This is especially useful once a title company runs a search to determine if proceeds from the sale of real property should be used to satisfy the judgment.

If the judgment debtor wishes to sell property, he or she will likely have to satisfy the judgment as most title companies will require that all liens are released.

Here are some common methods for judgment collection in Texas:

A turnover order can include accounts receivable, cash, stock in a closely held corporation, commissions, royalty checks, and property outside of Texas.

Enforcing court decisions in Texas can be a complex process, but it's essential to understand your options. A writ of garnishment is a straightforward way to collect a judgment from a debtor's bank account, and banks are often cooperative.

If a writ of garnishment isn't practical, a judgment creditor can request a writ of execution, which allows for the seizure of non-exempt property. However, this method may not be effective if the debtor lacks sufficient assets. In such cases, a writ of garnishment becomes a more attractive option.

Requesting a writ of garnishment requires information on the debtor's bank account, including the bank name, account name, and account number. This information can often be obtained from cancelled checks or other documentation. A good collections attorney will know how to navigate this process and avoid potential pitfalls, such as paying the bank's attorney fees if there are no funds in the account.

In Texas, a judgment creditor can request a writ of execution 30 days after obtaining a final judgment. This writ permits a constable to seize the judgment debtor's non-exempt property and sell it at auction.

A thorough asset search is crucial before requesting a writ of execution, so you can direct the constable to a specific property. Our experienced attorneys have many asset search tools available and can assist you with this process.

If the judgment debtor does not have enough non-exempt assets to satisfy the judgment, the mere presence of a constable at the door can be a powerful motivator to make payment arrangements. This can prompt the debtor to settle or negotiate the judgment.

A writ of execution can be a useful tool to collect a debt faster than a judgment lien allows. You can file for a writ of execution with the clerk of the court that decided your case, directing the sheriff or constable to seize and sell the debtor's nonexempt property.

To successfully levy on the debtor's nonexempt property, the judgment creditor should communicate with the constable executing the writ and instruct her to collect only those assets that would satisfy the amount of the judgment. This can prevent an unsuccessful levy attempt.

If other efforts for enforcement fail, your judgment enforcement attorney can request a motion for turnover, or turnover order. A turnover order is a court order that forces the debtor to deliver property that cannot be readily attached with a lien or garnished.

A writ of garnishment can be a good option if a writ of execution is not practical due to the judgment debtor's lack of sufficient non-exempt property in Texas. This allows the judgment creditor to garnish property belonging to the judgment debtor currently in the possession of third-party banks.

You can request a writ of garnishment to collect your judgment directly from the debtor's bank account. A writ of garnishment orders a third party (like a bank) to turn over property to settle a judgment.

Many judgment creditors are willing to settle a judgment debt for less or negotiate a payment schedule that is manageable. If you get a judgment against you in Texas, contact your creditor before assets are seized or liens filed.

Enforcing Out-of-State Decisions can be a complex process, but understanding the basics can help. In Texas, judgments obtained in other states are considered "foreign judgments" and are governed by Chapter 35 of the Civil Practice & Remedies Code.

To enforce a foreign judgment in Texas, the judgment must be domesticated by filing the proper documents with the clerk of court. This is a crucial step to get the process started.

Once a foreign judgment is domesticated, it's treated as a Texas judgment, giving the judgment creditor more options for collecting non-exempt property located in Texas.

The collection process in Texas can be complex, but understanding the key steps can make a big difference.

Serving post-judgment discovery is a crucial step in obtaining payment on the judgment. This involves sending requests to the debtor for information about their assets.

Our post-judgment discovery strategy is twofold: either the debtor answers the requests and provides necessary information, or they don't, which leaves them liable for sanctions.

Sanctions for failure to answer discovery can be severe, including payment of the creditor's attorney's fees and fines. In extreme cases, a debtor may even face jail time for failing to follow a court order.

Here are the potential sanctions for failure to answer discovery:

If you're facing a post-judgment collection in Texas, it's essential to understand what assets can be taken by a receiver. A receiver can take any nonexempt property, which includes financial accounts, real estate, stock certificates, rents, and contractual interests.

Exempt property, on the other hand, is protected by Texas and federal laws. This includes your homestead, vehicles, current wages (except for certain debts), Social Security Administration benefits, and more.

Here's a list of some exempt property:

Keep in mind that the specific amount of exempt property allowed varies, so it's crucial to review the details carefully.

Judgment debtors may try to avoid paying a judgment by making transfers with the intent of hindering, delaying, or defrauding a judgment creditor.

Under the Texas Uniform Fraudulent Transfers Act (TUFTA), debtors are not allowed to make such transfers.

You can get back property or assets that mysteriously disappear by pursuing legal action.

If a judgment debtor makes a transfer to avoid paying a judgment, you can take action to recover the transferred assets.

Judgment creditors must "follow the money" to track down assets and recover them.

Read more about the remedies for fraudulent conveyance in our blog, “What Is a Fraudulent Transfer in Texas?”

Your homestead is protected from turnover receivers, which means you can keep your home and its contents safe from creditors.

Vehicles are also exempt, but you're limited to one per licensed driver, so if you have multiple drivers in the household, you'll need to decide which one gets to keep their vehicle.

Current wages are exempt, except for specific situations like paying child support, spousal support, alimony, and federal debts like taxes and student loans.

Social Security Administration benefits, including Social Security Retirement, SSI, and SSDI, are all protected from receivers.

Veterans Administration benefits and Railroad Retirement Board benefits are also off-limits to receivers.

Office of Personnel Management retirement benefits and FEMA disaster benefits are exempt as well.

Workers' compensation benefits and unemployment benefits are also protected.

Here's a list of some of the other exempt properties:

These exemptions can provide significant protection for your assets, so be sure to take advantage of them if you're facing financial difficulties.

You should respond to the receiver's contact, even if you only have exempt property. This is because not answering can result in the receiver taking your exempt property.

If you only have exempt property and income, you may be judgment-proof, so be cautious when negotiating a payment plan with the receiver.

A receiver can take nonexempt property to pay the debt owed, including post-judgment interest and other costs. These costs usually include the creditor's attorney's fees, the receiver's fee, and other expenses.

If the property taken or sold is worth more than the total amount owed, any leftover proceeds from the sale will be returned to the debtor. This is a crucial point to keep in mind when dealing with a receiver.

The receiver's fees can be significant, sometimes as much as 25% of the judgment collected. The receiver can take property to pay these fees in addition to the debt being collected.

You have 14 days after being served with the Notice of Protected Property Rights to claim any exemption. If you don't claim your exemption within this timeframe, the receiver can sell your nonexempt property.

A receiver can't sell your property for at least 14 days after you've been served with the Notice of Protected Property Rights. This allows you time to claim any exemption.

If the receiver has taken or frozen your exempt property, you should file a Protected Property Claim Form with the court as soon as possible. You should have received this form from the creditor after the receiver was appointed.

The fees of the receiver are paid by the debtor, and the receiver can take property to pay these fees in addition to the debt being collected.

If you've obtained a judgment, you can get a "turnover order" where a court-appointed receiver collects assets on your behalf.

This order allows the receiver to conduct further discovery and turn over assets directly to you, making it easier to recover what's owed.

You can also domesticate a judgment from another state, referred to as a "foreign judgment", with the county clerk's office.

Domesticating your judgment gives you access to a full range of judgment enforcement services, including collection and asset recovery.

To protect your rights, it's essential to work with a lawyer who has experience enforcing collections and knows the local laws and regulations.

Call a lawyer experienced in post-judgment collection in Texas to schedule a free consultation and discuss your options.