Turning Judgments into Cash: How to Collect Effectively in Houston
For over 25 years, I represented debtors in bankruptcy, filing more than 4,000 Chapter 7 and 13 cases in the Southern District of Texas, including Houston and Galveston divisions. During this time, I became intimately familiar with Texas exemptions and the strategies creditors use to collect on judgments. If you’ve secured a judgment against a debtor, you might be wondering: “How do I collect?” Let’s explore the tools at your disposal, including writs of garnishment and how they work in Texas.
Collections vs. Debtors’ Rights: The Legal Landscape
While securing a judgment is an accomplishment, collecting on it is where the real challenge begins. The state of Texas provides robust protections for debtors, which can make it tricky for creditors to enforce their judgments. Key exemptions include homestead protections, certain personal property, and wages in most circumstances. However, bank accounts, rental income, and other non-exempt property can often be pursued. Understanding these nuances is critical to successful collection efforts.
Collections Through Writs of Garnishment
One of the most effective tools available to judgment creditors is the writ of garnishment. This court order allows you to seize funds directly from a debtor’s bank account. Here’s how the process works:
- File for a Writ of Garnishment: Once you have a valid judgment, you can petition the court for a writ of garnishment. This involves filing the necessary paperwork and paying applicable fees in the court where your judgment was issued.
- Serve the Bank: The writ is served on the debtor’s bank, effectively freezing the account. The bank then files an answer with the court, disclosing how much money is in the debtor’s account.
- Debtor’s Response: The debtor may file a motion to contest the garnishment, claiming exemptions or procedural errors.
- Collect the Funds: If the court approves the garnishment, you can collect the funds held by the bank, up to the amount of the judgment.
Navigating Justice Courts
Most collection cases begin in Justice Courts (commonly called JP courts). These courts handle smaller cases and judgments, making them an ideal venue for filing writs of garnishment for judgments under $20,000. Here are a few tips for working within the Justice Court system:
- Understand the Limits: Justice Courts have jurisdictional limits on the amount they can oversee, but they’re efficient for smaller cases.
- Streamline Your Filing: Be prepared with all necessary documentation, including proof of judgment and the debtor’s banking information.
- Stay Persistent: Even if initial efforts fail, keep pursuing your collection rights within the bounds of the law.
Bankruptcy: A Debtor’s Shield
As a former bankruptcy attorney, I know firsthand how bankruptcy can disrupt collection efforts. When a debtor files for bankruptcy, an automatic stay goes into effect, halting all collection actions, including garnishments. Creditors must then navigate the bankruptcy court to assert their claims. In some cases, pursuing collection may require lifting the automatic stay or challenging the dischargeability of the debt.
Why Experience Matters
Having filed thousands of bankruptcy cases and now focusing on creditor-side collections, I bring a balanced perspective to this field. Whether you’re a creditor seeking to enforce a judgment or a debtor weighing bankruptcy options, understanding the interplay of exemptions, collection tools, and bankruptcy law is crucial.
For more information about judgment collections and your options, visit our website or call us at (713) 974-1151 to schedule a consultation. With extensive experience on both sides of the aisle, I’m here to help you navigate this complex process.
