We recently published a post discussing important things to know about collecting judgments in Utah. Being that we are licensed to operate in a total of six states, we thought it might be wise to discuss collecting judgments in all of them. This post will focus on collecting judgments in Texas.
In some ways, judgment collection in Texas is more challenging compared to other states. But judgment creditors do have options. Texas law doesn’t leave them hanging out to dry.
Just as in every other state we collect judgments in, Texas leaves judgment enforcement to the creditor. The judgment itself is nothing more than a legal proceeding verified by a piece of paper with the judge’s signature. Courts very rarely get involved in enforcement actions except under limited circumstances.
Attorneys can pursue judgment collection in Texas. So can specialized collection agencies like Judgment Collectors. We obviously believe the latter choice to be the better one.
If a judgment debtor is unable to enter into a mutually agreeable payment plan, creditors in Texas may be forced to look at nonexempt assets. But before that can happen, post-judgment discovery needs to take place. Texas allows interrogatories for that purpose.
Texas courts can accept attorney motions to compel debtors to respond to interrogatories. Courts can also find debtors in contempt if they refuse to cooperate. That makes the interrogatories a powerful tool for post-judgment discovery.
Because Texas law includes a lengthy list of exempt assets that creditors cannot touch, a debtor’s list of nonexempt assets may be a challenge to work with. An abstract of judgment can make it easier for creditors to go after those assets. The nice thing about the abstract of judgment is that it can be filed immediately after judgment is entered.
Texas law also does not limit the number of counties in which creditors can file abstracts of judgment. As soon as one is filed in relation to a particular asset, a judgment lien is automatically generated and attached to that asset.
Creditors in Texas can legally seize nonexempt assets after 30 days. However, a writ of execution is necessary to do so. A debtor files a motion with the court to obtain a writ of execution. With writ in hand, the debtor can utilize local law enforcement to seize and sell nonexempt assets to satisfy the judgment.
Garnishment is a tool that judgment collectors utilize nationwide. However, garnishment rules vary by state. In Texas, creditors cannot garnish wages earned for personal services. They can garnish bank accounts and certain types of investment accounts.
This particular strategy is not ideal because it tends to take too long for garnishment to satisfy sizable debts. But when a debtor’s nonexempt assets are limited, garnishment may be the only way to pursue payment.
Although a skilled judgment collector can continue attempting to collect on a judgment indefinitely, enforcement is limited to 10 years at a time. Should an initial judgment not be collected within the first 10 years, the creditor must either renew it or let it expire. It is not uncommon for creditors to seek multiple renewals before finally getting payment.
If you have unpaid judgments in Texas, do not attempt to collect them on your own. Turn them over to us and, along with them, the expense and hassle collecting judgments in Texas is known for. Judgments are what we specialize in. Let us handle them for you.
Published August 23, 2022