Why Texas Judgment Collectors Want to Know About Debtor Property

Collecting money judgments in Texas is subject to certain rules and regulations. But one thing Texas has in common with other states is that it allows judgment creditors to leverage certain types of debtor property for payment. That is why Judgment Collectors put so much effort into learning about debtor property.

Texas judgment collectors want to know about property because it equals leverage. A debtor’s property is one of the best tools creditors have at their disposal to encourage payment. But not everything a debtor owns offers sufficient leverage. Creditors only leverage certain types of property. To do so, they need to know what the debtor owns.

Filing an Abstract of Judgment

In order to use property as leverage to encourage payment, a judgment creditor must file what is known as an Abstract of Judgment. This document is filed with the county clerk in the same county where the debtor owns property.

The Abstract of Judgment attaches a lien to the debtor’s property. With that lien in place, a judgment creditor now has leverage to encourage the debtor to pay.

Exempt and Nonexempt Property

The need for thoroughly investigating a debtor’s property arises from the fact that the state of Texas recognizes both exempt and nonexempt property. Exempt property is property to which a judgment lien cannot be attached. It is property a judgment creditor cannot go after.

What constitutes exempt property varies from one state to the next. In Texas, there are three types of exempt property:

  • A primary residence (a.k.a. the debtor’s homestead).
  • Personal property up to a certain dollar value.
  • The debtor’s current wages.

In terms of personal property, the monetary values are $50,000 for a single debtor and $100,000 for couples or families. That means for a single debtor, the first $50,000 in personal property is exempt from judgment liens.

What does that leave us in terms of nonexempt property? In Texas, nonexempt property includes:

  • Bank accounts.
  • Investment accounts.
  • Non-homestead real estate.
  • Vehicles (a debtor is allowed one exempt vehicle).

Texas judgment collectors make a point of learning as much about debtor property as possible. We want to know what the debtor owns and what it is worth. Armed with this information, we can better plot a strategy to help the judgment creditor collect.

Property Is Important to Its Owner

It is hard for us to do justice to the importance of property in the judgment collection game simply by explaining to you what it is and why we look for it. So perhaps a better way to drive the point home is with an example.

We once worked on a case in which a judgment debtor claimed to have no means by which to pay what he owed. Our team did a thorough records search and discovered a piece of nonexempt property in a neighboring county. That property was extremely valuable to the debtor.

When we informed the debtor that we knew about the property, he changed his mind about his ability to pay. He was motivated to work with our client to get the debt paid in full.

It’s Worth the Effort

Digging around to learn about debtor property takes time and effort. It is not easy. But as a judgment collection agency that specializes in helping judgment creditors get paid, we know the effort is worth it. We have seen time and again that knowing about property helps Texas judgment collectors do right by their clients. The more we know about debtor property, the more successful we are as a collection agency. Contact our experts at Judgment Collectors today.