How to Collect After a Judgment: Bankruptcy Services for Creditors
If you’ve recently won a judgment but are struggling to collect the debt owed to you, you’re not alone. It’s one thing to get a judgment in your favor, but actually collecting on that judgment can prove to be a different challenge altogether. This is where bankruptcy services tailored for creditors can become crucial.
In Houston, including areas such as Deer Park and League City, the legal landscape for collections and bankruptcy can be complex, especially when you are dealing with individuals or businesses that have declared bankruptcy. However, with over 25 years of experience in bankruptcy law and a deep understanding of Texas exemptions, I’m here to guide you through the steps of collection and how to use the power of bankruptcy proceedings to enforce your rights as a creditor.
Judgment in Hand – Now What?
You’ve already secured a judgment. That’s a significant achievement, but unfortunately, winning the case doesn’t automatically mean that you will receive the money owed. There are various tactics available for creditors to collect on judgments, with writs of garnishment being one of the most effective tools, especially when the debtor has bank accounts or other assets.
A writ of garnishment is a legal process that allows creditors to collect the owed debt directly from a debtor’s bank accounts, wages, or other assets. However, the process can be challenging without a thorough understanding of Texas law and the court system.
How Writs of Garnishment Work
Once you have a judgment in your favor, the next step is determining how to collect. A writ of garnishment is typically filed with the court to seize funds directly from the debtor’s bank account or wages. Here’s how it works:
- Obtain a Writ of Garnishment: After a final judgment is entered, you can request a writ of garnishment. This is done by filing a motion with the court, which allows you to attach the debtor’s property, including bank accounts or wages.
- Servicing the Garnishment: Once the writ is issued, it is served to the debtor’s bank or employer. The garnishment places a legal hold on the debtor’s account, meaning the bank must freeze the funds up to the amount owed.
- Receiving Payment: The funds that are frozen by the bank will be directed to you, the creditor, after the appropriate legal procedures are followed.
In many cases, garnishments can be a highly effective method of recovering funds, especially when the debtor has sufficient assets or income.
Navigating Justice Court
In Texas, understanding how to work within the Justice Court system is crucial when pursuing collections. The process of filing and obtaining writs of garnishment can differ based on jurisdiction, but the general principles remain the same:
- Filing the Garnishment: After a judgment is obtained, creditors can file the necessary paperwork in the Justice Court. Make sure that all documentation is accurate and complete to avoid unnecessary delays.
- Enforcement of the Judgment: The court will review your garnishment application and, if approved, issue the writ to the appropriate financial institution or employer. Depending on the debtor’s assets, this could result in full or partial payment.
- Responding to Objections: If the debtor challenges the garnishment or claims exemptions, they may file a motion to release the funds. Texas provides specific exemptions, such as a portion of wages or certain bank accounts, but these need to be carefully evaluated.
Bankruptcy and Creditors’ Rights
When a debtor declares bankruptcy, it can complicate the collections process, especially if the debtor files for Chapter 7 or Chapter 13 bankruptcy. However, as a creditor, you still have rights and options.
- Secured vs. Unsecured Debts: Bankruptcy often discharges unsecured debts, but if your judgment is based on secured debt, you may have a stronger position to collect.
- Bankruptcy Court and Collections: In some cases, creditors may be able to file a claim in bankruptcy court to recover part or all of their judgment. Understanding the intricacies of bankruptcy law is key to protecting your interests.
- Stay on Collections: Once a debtor files for bankruptcy, an automatic stay goes into effect, temporarily halting all collection efforts, including garnishment. As a creditor, it’s essential to consult with an attorney to see if you qualify for an exemption or if there are opportunities to collect through the bankruptcy process.
Why You Need an Experienced Attorney
Dealing with collections and navigating bankruptcy law can be complex, especially when dealing with garnishments and judgment enforcement. That’s why it’s crucial to have a skilled attorney with experience in debtor-creditor law. I’ve been a creditor’s attorney for over 25 years and have filed more than 4,000 Chapter 7 and Chapter 13 cases in the Southern District of Texas, including the Houston and Galveston divisions. My expertise in Texas exemptions and understanding of the court system gives me the ability to efficiently help you collect on your judgment and protect your financial interests
