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Collections on Judgments

Judgment must be divided into two parts

  • domestic (Texas)
  • Foreign (other states and/or countries)

Final  Judgments

One can only obtain a judgment after filing a lawsuit and complying with the rules of civil procedure in order to either prevail at trial or obtain a judgment by default. After the judgment is signed, the Court Clerk will not issue a writ of execution until it is at least 30 days old (21 days in justice court) at which time the judgment is considered final. This post-judgment waiting period exists because one may file a motion for trial in this window and set aside the judgment.

Collecting on the Judgment

Exempt property is a property that your creditors cannot take from you so as to sell it & pay your debt.  Hence, judgment creditors cannot take your exempt property.  Although, the property tax authority, homeowners association, and home equity loan lenders must obtain judgment before they foreclose, and then they are allowed to foreclose against your home.  The methods available to Texas debt collector are the abstract of lien that clouds title and goes on your credit, writ of garnishment for bank accounts or other financial institutions, and the usual letters and telephone calls.  A writ of execution will attach to all of non-exempt property, which would be allowed to be sold to pay judgments, post-judgment discovery, and the ‘appointment of a receiver’.

Writ of Execution

Once issued, the writ of execution is sent to the constable (or sheriff, in some counties) who charges a fee for attempting to collect.   The constable will go to the debtor’s residence and present the judgment.  They will inspect for any non-exempt property and also question the debtor.  Most of the good judgment creditor attorneys will have some information to direct the officer to a specific, known, and non-exempt asset for the purpose of attachment or garnishment.

Post-judgment Discovery

This is related to more fact finding  and asset locating which is done by the creditor to look for non-exempt assets after the judgment has become final.  The post-judgment discovery process includes interrogatories, requests for admission, and requests for production. Tex. R. Civ. P. 621a. These discovery  rules pertaining to limits on trial discovery do not apply to post-judgment.  In addition to written discovery, it is possible to  take the debtor’s deposition, although written discovery generally comes first. Note that if a debtor who has been properly served fails to answer the post-judgment discovery, he or she may be held in contempt by the judge, resulting in a fine or even jail time. Tex. R. Civ. P. 215.

If actionable information is obtained, the judgment creditor can approach the court and request a writ of attachment, Tex. R. Civ. P. 641; Tex. Bus. & Com. Code § 8.112, garnishment, Tex. R. Civ. P. 669, or a “turn-over order,” Tex. Civ. Prac. & Rem. Code § 31.002.  In addition, if the debtor continues to obstruct the collection process, the court has the power to appoint a receiver.   The receiver has broad powers which includes:

(1) take charge and keep possession of the property;
(2) receive rents;
(3) collect and compromise demands;
(4) make transfers; and
(5) perform other acts in regard to the property as authorized by the court.

Abstracting the Judgment

It is normal procedure for the creditor to request an abstract of judgment from the Clerk and then file that abstract in the real property records.  The Abstract stays on file for 10 years but may be refiled for successive 10-year periods, provided that the judgment has attempted to have been executed on by the judgment collector. Filing the abstract puts the public on notice that the judgment exists and attaches lien to the non-exempt real property of the debtor in the county for which the abstract is filed.

Enforcement of Judgments from Other States

Domestication and Enforcement of “foreign judgments” is governed by the Civil Practice & Remedies Code chapter 35, also referred to as the “Uniform Enforcement of Foreign Judgments Act” or “UEFJA.” This act provides that a foreign judgment from another state may be domesticated if: (a) at the time the foreign judgment is filed, the judgment creditor or the judgment creditor’s attorney files with the Clerk of Court an affidavit showing the name and last known address of the judgment debtor and the judgment creditor; (b) the Clerk then mails notice of the filing of the foreign judgment to the judgment debtor at the address given; and (c) the notice must include the name and address of the judgment creditor and, if the judgment creditor has an attorney in Texas, the attorney’s name and address.

The result is that a foreign judgment could be then enforced and collected in Texas just as any other judgment.  Many times I have seen foreign judgments attempting collection from the foreign jurisdiction and using that jurisdiction remedies for the enforcement of judgment.  The biggest of such is the wage garnishment.  The writ of wage garnishment is cut and then served on the debtor’s employer who is a Texas resident, but was a resident of the foreign state when the suit was filed.  This is a conflict of law and the courts are split as to what can be done if the employer of the debtor maintains offices in the judgment state.

It is best that you visit our firm so that we can look at your facts more carefully and then ascertain if and how to avoid the garnishment.  Many lawyers will tell you that it is easy to win and you will get a windfall.  Be careful as case law in the Houston region does not say this as evidenced by the Knighton v. IBM, 856 S.W. 2d 206 (Tex. App. Houston [1st Dist.] 1993) and Texaco v. LeFevre, 610 S.W. 2d 173 (Tex. App. Houston [1st Dist.] 1980).  In the Knighton case, the judgment debtor resided in Texas but had been served in New York. The debtor sought to enjoin judgment creditor from enforcing a garnishment order issued out of New York against wages earned by the debtor in Texas. Debtor argued that, because he resided in Texas, the Texas collection procedures should be applied. The Court disagreed and stated that our state court was bound to follow the decision of the Fedral district court even if the effect would be to allow the garnishment of wages, which our state court could not do because of the prohibition of  garnishment of wages in Texas. Thus, the  Court drew a distinction between the situation where a Texas Court was being asked to enforce a wage garnishment and where a Texas Court was simply being asked not to interfere in such an enforcement.   The court held that  wage garnishment would be allowed in the latter scenario.

The 1st and 14th court of appeals are the court of appeals that would hear your case if you are in the Houston region and attempting to avoid the wage garnishment.

Austin County Texas judgment collections, Brazos County Texas judgment collections, Colorado County Texas judgment collections, Fayette County Texas judgment collections