If you win a judgment against a non-paying debtor, you usually have the legal right to collect the money that owed to you. Unfortunately, if your debtor lives in Texas, you may not be able to collect any of that money. Texas has some of the most liberal protections for debtors in the country, and it is entirely possible that a Texas debtor could protect all of his assets from a judgment.
Judgment
If you are a creditor and your debtor won't pay his debt to you, you can sue him in court to win a judgment. A judgment is simply the court's agreement that the debt you hold is valid, and that the debtor has the legal responsibility to pay you. After that court verdict, you are essentially on your own in terms of getting the debtor to pay. While the court will support your efforts, it will not act on your behalf to collect the debt. However, the court will allow you to take certain legal measures to collect your debt, such as wage garnishment or asset attachment. Each state has its own laws regarding what creditors can take from a debtor, and Texas tends to protect the debtor over the creditor.
Wage Garnishment in Texas
In many states, if you don't have the right to seize any property, you have the right to garnish a debtor's wages. However, Texas does not allow wage garnishment. While federal standards suggest that states should allow garnishment of up to 25 percent of a debtor's wages, each state can determine its own level of garnishment, as long as it does not exceed the federal standard. In Texas, 100 percent of a debtor's wages are exempt from garnishment, so this is not an avenue for you as a Texas creditor. Although certain rare exceptions exist, such as garnishment for a student loan or child support, as an independent creditor you cannot garnish a Texas debtor's wages.
Texas Exemptions
Since you can't generally garnish the wages of a Texas debtor, your only avenue for repayment with a judgment in Texas becomes asset attachment. Unfortunately, Texas laws are generous towards debtors in this regard as well. The main Texas exemption is the homestead exemption, which is essentially unlimited. No matter what the size of a debtor's unpaid debt, you cannot slap a lien on a Texas debtor's property. Other protected assets include most insurance and annuities, public benefits and pensions and retirement plans. Most personal property is also protected up to $30,000 for a single debtor, or $60,000 for a joint debtor, although exceptions exist. If a debtor has most of his net worth in his homestead, even if it is a million-dollar homestead, you may not end up with any money out of your judgment.
Abstracts of Judgment
One debt collection strategy in Texas is to issue abstracts of judgment in any county where you feel your debtor may own additional property. If the debtor has any non-exempt property in any of these counties, or if the debtor ever acquires property in these counties, you may have priority in terms of establishing a lien against the debtor's property. Since the Texas homestead exemption only protects a debtor's primary residence, if your debtor has or acquires rental property you may be able to place a lien against that property to satisfy your judgment.
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