Dallas Business Attorney: Post-Judgment Collection!
Posted on | October 14, 2011 | No Comments
The first question that all of my clients ask after receiving a final judgment is, “when do I get my money?” Unfortunately, it rarely, if ever happens that the judgment debtor will accept the loss, whip out his or her checkbook and write a check for the entire judgment amount. Therefore, after a judgment is entered (signed by the judge), I inform my clients that the hard part is just beginning. Realistically, the judgment debtor will refuse to cooperate in the collection effort, causing a need for additional court intervention.
The first step in the collection process is to perfect the judgment. Perfecting the judgment is accomplished by filing a proper abstract of judgment in the real property records where the debtor has or may have property. The effect of the abstract judgment creates a lien on the debtor’s non-exempt real property in the counties the abstract was recorded. The abstract should be filed immediately after rendition of judgment, to perfect the lien as soon as possible. The following collection steps depend upon whether the judgment debtor perfects an appeal, files a bond and suspends enforcement of the judgment.
If no appeal is perfected, or the appeal is perfected and no bond is filed, than the judgment creditor may serve the debtor with post-judgment discovery. The purpose of the discovery is to determine and locate assets of the debtor, which are available to satisfy the judgment. However, just because a debtor receives the post-judgment discovery does not mean that he or she will answer said requests. Even if the debtor does respond, the answers will more than likely be illusive and vague. Therefore, court intervention may be necessary in the form of a motion to compel the debtor to respond to the discovery fully. It may also be useful to take a deposition by videotape of the debtor in order to gain more information.
After the judgment becomes final (30 days after the judgment is signed if no appeal is perfected) a writ of execution should be issued. A writ of execution is a judicial writ directing the enforcement district, county, or justice court judgment. See Tex. R. Civ. P. 261. The writ typically directs the sheriff or constable to levy on a debtor’s nonexempt property, sell it, and deliver the sale of the proceeds to the judgment creditor to be applied towards the satisfaction of the judgment. See Tex. R. Civ. P. 637. However, a judgment creditor should be cautious in filing a writ as damages for wrongful execution are potentially severe, and the judgment creditor may be held liable for the wrongful execution.
Another tool in the collection arena is the Turnover Statute. Section 31.002 of the Texas Civil Practice & Remedies Code allows the court to appoint a receiver to seize and sell a judgment debtor’s nonexempt assets, including present or future rights of property. In order to have a receiver appointed it is necessary to file an application for turnover relief with the court. No bond is required to be filed for a receivership as most turnover receivers receive a fee from what they collect.
If you need help collecting on a judgment, please call The Wright Firm, LLP and schedule an appointment today at 972-353-4600 or visit our website at www.thewrightlawyers.com.
Tags: Collection > Dallas Business Attorney > Dallas Business Lawyer > Denton Business Lawyer > Lewisville Business Attorney > Lewisville Business Lawyer > Post-Judgment Collection > Texas Business Law > The Wright Firm
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