Protecting Property and Cash from a Judgment

Ignoring a  lawsuit could have very serious consequences. If you do not answer a lawsuit, it will most likely result in a default judgment against you. The amount of the judgment may include the debt, damages, attorney’s fees, court costs, and pre and post-judgment interest.

The following is a non-exclusive list of remedies a debt collector can use to recover a judgment.

Garnishment

A party who receives a judgment against you cannot garnish your wages in Texas. They can, however, garnish your bank account. If the judgment creditor is sophisticated, they will try to garnish your bank account the minute your pay check cashes. They are not required to give you notice of the garnishment (And why would they? Once they gave you notice, you could simply close your account and move to a new bank). Garnishment proceedings can take weeks or months to be resolved. During this time, you bank account will be frozen.

Some funds may be exempt from garnishment including, but not limited to, two months worth of social security payments, insurance proceeds, unemployment benefits, and retirement accounts.

Property Liens

After receiving a judgment, a debt collector can also file an abstract of judgment in the county’s property records. This will place a lien against any property you may own in the county where it is filed. A judgment creditor cannot foreclose on your homestead, but they could foreclose on another piece of property. It could also impact your ability to sell your home, refinance, or purchase additional property.

Writ of Execution

Once a judgment is obtained, debt collectors can file a writ of execution. This allows the debt collectors to seize property and assets from the debt collectors. Once seized, the assets are auctioned off and the proceeds go to paying off the judgment. Here is a list of items that are exempt from writs of execution: http://www.statutes.legis.state.tx.us/Docs/PR/htm/PR.42.htm

Post-Judgment Interest

A judgment can also accrue post-judgment interest. The longer the judgment sits unpaid, the more interest that it compounds. If you wait to long, you may up ending a whole lot more.

Contact us today if your bank account is being garnished, you have a judgment lien on your property, or your property has been seized for a judgment. More importantly, call us today if you are being sued so we can help work with you to keep your cash and property!