Houston Bankruptcy Law: Collecting Judgments and How Bankruptcy Can Help
If you’ve recently won a judgment but are struggling to collect, you are not alone. Many creditors in Texas face the challenge of pursuing judgment enforcement once the court rules in their favor. While having a judgment is a victory, it doesn’t automatically guarantee payment. This is where bankruptcy can play a role in addressing your collection difficulties, particularly when dealing with debtors who are struggling financially.
With over 25 years of experience as a bankruptcy attorney in Houston, I’ve seen how difficult it can be to collect debts even when a court has ruled in your favor. After all, obtaining a judgment is just one part of the process; the next challenge is ensuring you can recover the money owed to you. Thankfully, there are several tools available, including the use of writs of garnishment on bank accounts and other assets.
The Role of Bankruptcy in Debt Collection
If you have a judgment but are facing challenges with collecting the amount due, filing for bankruptcy may be the solution. Bankruptcy, specifically Chapter 7 or Chapter 13, provides a way for debtors to have their debts discharged or reorganized, but it also provides creditors with a clearer path to pursuing collections. As someone with decades of experience in bankruptcy law, I can help you navigate this process and take action to recover what is owed to you.
Writs of Garnishment: A Key Tool for Debt Collection
One of the most effective methods for collecting a judgment is through a writ of garnishment. This legal action allows a creditor to directly seize funds from a debtor’s bank accounts or wages. If you have a judgment and the debtor is not paying, I can assist you in obtaining a writ of garnishment to secure payment.
When you initiate a writ of garnishment, it essentially freezes the debtor’s account and orders the bank to transfer the funds to you, the creditor. However, to successfully pursue this route, it’s essential to understand the logistics involved and ensure you comply with Texas laws. Here’s how it works:
- Obtain a Judgment: This is the first step in any collection process. Once you win a judgment, you are legally entitled to collect the amount owed to you.
- File for Writ of Garnishment: You must file a request for a writ of garnishment in the Justice Court or the court that issued the judgment. This legal action forces the debtor’s bank to freeze their accounts and transfer the funds to satisfy your debt.
- Execute the Writ: After the writ is approved, it is served to the financial institution. It’s crucial to know how to properly execute the garnishment to ensure the bank or third-party institution follows through.
- Court’s Role in Collection: Understanding how the local courts, including Justice Courts in Harris County, process these requests is vital to ensuring timely and effective enforcement.
Texas Exemptions and Collecting Debts
Another important consideration in this process is Texas exemptions. As someone who has filed over 4,000 bankruptcy cases in Houston and Galveston, I can guide you through how exemptions can affect the collection process. Certain assets are exempt from collection under Texas law, which can impact the amount you are able to collect.
Even in cases where a debtor files for bankruptcy after you obtain a judgment, you still have options. Chapter 7 bankruptcy may lead to liquidation of some assets, while Chapter 13 can involve a repayment plan that could still enable you to recover a portion of your judgment.
What Happens When a Debtor Files for Bankruptcy?
When a debtor files for bankruptcy, the court typically imposes an automatic stay that halts all collection efforts, including garnishments. However, there are exceptions, especially if the debt is tied to a judgment already obtained. In some cases, creditors can seek permission from the bankruptcy court to continue collection efforts, particularly if the debt is non-dischargeable (e.g., related to fraud, child support, or some tax debts).
Let Us Help You Collect What’s Rightfully Yours
If you’re a creditor with a judgment and facing difficulty collecting, bankruptcy may provide a path forward. Whether you’re pursuing collections through garnishment or navigating the bankruptcy process, having a knowledgeable attorney by your side is key to ensuring that your rights are protected and that you’re able to recover what is owed to you.
With over 25 years of experience, I am equipped to guide you through the complexities of judgment collection and bankruptcy proceedings. Contact me today to schedule a consultation and learn how we can work together to collect your debt effectively.
