If you fail to pay back credit card debt, your creditor can file suit against you in a court of law. Texas is one of a few states that prohibits creditors from seeking wage garnishment as a way to enforce a judgment. However, a creditor can plain a lien against your nonexempt property, as defined by Texas statute.
Statute of Limitations
If you don't pay back credit card debt in Texas, a credit card company cannot place a lien against your nonexempt property or otherwise forcibly collect the money you owe without going through the litigation process. A creditor who wants to file suit against you for credit card debt must adhere to the state's statute of limitations. A statute of limitations, which can apply to both civil and criminal actions, imposes certain time limits after a cause of action occurs during which a suit can be filed. In Texas, creditors have four years in which to bring suit against you for credit card debt.
The Process
Before a creditor places a lien against your nonexempt property, it must first go through Texas' civil litigation process and prove to a court of law that you rightfully owe the debt. When a creditor files suit against you, they must give you legal notice in the form of a citation, delivered to you by a process server. The court may render a decision without your case actually going to trial; for example, if your creditor produces convincing evidence that you owe credit card debt and you have no defense, a court may issue a summary judgment in the favor of your creditor -- or in your favor, if the creditor has no grounds in which to file suit. Also, if you fail to respond to the notification, the court may issue a default judgment in favor of your creditor. If the court finds in favor of your creditor, this in itself doesn't automatically put a lien against your nonexempt property or otherwise force collection of the debt. The court's decision simply gives your creditor express permission to enforce the judgment in the manner it chooses. In the state of Texas, putting a lien against your nonexempt property is an option your creditor may choose.
Enforcing the Judgment
If your creditor opts to enforce a judgment with a lien against your property, the creditor must again go through the required legal steps. A creditor who opts for a judgment lien must file an abstract of judgment in the property records in every county where you currently hold nonexempt real property or where you may own real property in the future. Before the property is sold and/or the property deed transferred, the lien must be paid.
What's Exempt Property?
It's very difficult for creditors to collect a money judgment in Texas simply because so much property is considered nonexempt. State statute generously exempts real property that's defined as a homestead -- a house and 1 acre in an urban area or a house and up to 200 acres of land in a rural part of the state. Certain personal property, such as motor vehicles, heirlooms, furniture, farm animals and equipment, is also exempt from lien or seizure and sale if valued at no more than $60,000 if you're married or $30,000 if you're not.
Other Information
Even if you have only nonexempt property against which a credit cannot file a lien, a judgment can still create problems for you. A judgment, a type of public record, endures on your credit report for at least seven years. A judgment negatively affects your credit rating and may make it difficult for you to get new credit or a loan. Consult an attorney if a credit card company has filed suit against you. If you cannot afford an attorney, seek help from low-cost or pro bono legal aid services in your area.
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