Can a Creditor Place a Lien on Property in Texas?

If you are a Texas resident and have failed to make payments on a debt, Texas law affords creditors a variety of options to collect from you. A creditor will typically use collection strategies, such as sending you demand letters by regular or certified mail and calling you to try to convince you to pay your debt. However, if you resist paying your debt or avoid your creditor's contact attempts, your creditor may resort to more aggressive strategies, including placing a lien on your personal property.

Judgment

Before a private creditor can place a lien on your personal property, it must obtain a legal judgment against you for your debt. The creditor will typically hire an attorney to file a civil suit against you in the county where you live. You will then receive a summons from the court, and you will have an opportunity to raise a defense against the lawsuit. If you can show that you have already paid the debt or the creditor improperly filed the suit, the court may dismiss the lawsuit. However, if you cannot raise a valid defense, the court will award a judgment in the creditor's favor.

Creation of Lien

Under Texas law, a judgment awarded to a creditor for debt creates a lien on any personal real estate property that you own. The creditor does not need to take any additional action to obtain a real estate lien. Your judgment creditor may also petition the court for a lien on other personal property, such as a vehicle, boat or household valuables.

Effect of Lien

A lien created as a result of a civil judgment in Texas gives the creditor an interest in the property you own. This means that you cannot sell or transfer the property until you satisfy the judgment by paying the debt, including interest permitted by the Texas court and the creditor's costs associated with obtaining the judgment. The lien may also permit the creditor to seize and liquidate the personal property to pay your judgment debt, particularly if you attempt to avoid paying the judgment.

Length of Lien

The lien created by a civil judgment ends when you satisfy the judgment by paying off the debt, plus interest and costs. If you do not pay off the judgment, the lien is subject to the 10-year statute of limitations on judgments in Texas. However, Texas law permits creditors to renew unsatisfied judgments. If the creditor renews the judgment, the lien can last an additional 10 years or until you satisfy the judgment.