The Challenge Of Exempt Property In Texas Judgment Collection
One of the reasons it's a lot more difficult to collect a judgment in Texas is that
we have a somewhat liberal list of property that is exempt from seizure and sale under a writ of execution. However, it's not impossible to collect a judgment in Texas. It's merely more challenging than in most other states.
General Rule for Writ of Execution
The general rule is that a Texas judgment debtor's a property is subject to a writ of execution if it's not exempted by the Texas constitution, a statute or other rule of law. Section 42 of the Texas Property Code then itemizes individual categories of assets which are definitely exempt from a writ of execution in Texas. These are broad groups of exemptions. Each grouping deserves additional explanation and will certainly be the subject of future articles. Meanwhile, understand that these groups represent broad areas of exemptions. It's also worthy to note that there are exceptions to these exemptions if the personal debt being collected is for a child support obligation.
With that in your mind, the following broad categories of property are without a doubt exempt from an execution to satisfy a judgment:
1. The homestead
2. Personal property with a net fair market value up to $ 60,000 for a family and $ 30,000 for a single adult.
The "net fair market value" ultimately suggests that you must figure out the fair market value and subtract from that sum the dollar amount of liens, if any, on the property.
3. Current wages for personal services
This is the one which usually trips people up in Texas due to the fact that it's different from the majority of other states. Thus, for sake of complete clarity, you need to be aware that Texas does not allow you to garnish your judgment debtor's salary in order to pay your judgment. There is, on the other hand, an exception for the enforcement of court-ordered child support.
4. Professionally prescribed health and wellness aids for the judgment debtor or a dependent of the judgment debtor
5. Certain retirement benefits and funds
Some of these retirement benefit exemptions are worthy of an article in their own right. Suffice it to say for now that retirement benefits are ordinarily "off limits" to a levy and execution in Texas.
6. Workers' compensation payments
7. Cemetery lots held for purposes of sepulcher
8. Property that the judgment debtor has pledged, assigned or mortgaged as security for a debt.
Typically, if the judgment debtor has property that has not been presented as security for a financial debt, that property must be levied first. On the other hand, if the only property he possesses has been actually presented as security, you have the ability to levy on that property and sell it under a writ of execution. But, you can only sell the interest owned by the judgment debtor. What this effectively means is that you should make certain the property sells for an adequate sum to pay the collateralized note on the property, the expenses of the sale and then the remainder is applied to the judgment.
9. Assets held by a trustee in a spendthrift trust for the benefit of the judgment debtor
10. Insurance benefits
11. Alimony, support, or separate maintenance payments the judgment debtor gets as support or the support of dependents
12. A sacred bible or some other book incorporating spiritual writings of a religion taken by a creditor aside from a lessor of real property who is exercising the owner's contractual or statutory right to seize personal effects after a tenant breaches a lease agreement for or abandons the real property; and
13. Judgments of Texas courts.
If your judgment debtor has a viable judgment against another individual or company and is getting payments on that judgment, you won't be able to levy and execute on that judgment. On the other hand, you might be able to obtain a turnover order to get to those payments or the dollar value of that judgment.
This listing of broad areas of exemptions is a nonexclusive list. Nevertheless, this list does represent those areas you will most likely encounter if you are actually trying to use a Texas writ of execution against an individual judgment debtor.
by: Harvey L. Cox
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