Obtaining a judicial judgment or arbitration award is typically the first step to recovering what is owed on a commercial debt. The next step, which many times is equally as challenging, is to collect on the judgment or award through the post-judgment collection process. As with the pre-judgment asset preservation process, there are a variety of methods available to assist creditors in Texas with enforcement and collection of judgments.
Discovery in Aid of Judgment
In Texas, a party that obtains a judgment may inquire about a judgment debtor’s ability to satisfy the judgment through the post-judgment discovery process, which is a process conducted through the court that rendered the judgment. Through this process, a person whom obtains a judgment may utilize many of the same discovery devices available to parties in litigation to obtain information about the judgment debtor’s non-exempt assets to aid in collection efforts, including depositions, written interrogatories, and written requests for production of documents and tangible items.
Typically, one of the first steps taken to preserve an interest in a judgment in Texas is the filing of an abstract of judgment. With some limited exceptions, once an abstract of judgment is recorded and indexed in the county records, a lien attaches to all non-exempt real property currently owned or owned in the future in that county by the judgment debtor. The attorneys at Powers Taylor assist clients in both locating assets owned by judgment debtors and filing abstracts of judgment in the county records of every county in which a judgment debtor may have an interest in real property.
Writ of Execution
One of the primary tools in Texas available for judgment creditors, or those who have secured a judgment for monetary damages, is the writ of execution. A writ of execution is the process by which the clerk of the court that rendered the judgment issues a writ of execution and directs any sheriff or constable in the State of Texas to seize, or levy upon, the judgment debtor’s non-exempt assets to satisfy the judgment. A writ of execution typically also empowers a sheriff or constable in Texas to sell all property seized as part of the execution at public auction and apply the monetary proceeds from the sale to the judgment debt. The writ of execution process involves numerous notice and filing requirements.
The turnover process is a statutorily granted remedy in which a court literally orders a judgment debtor to “turn over” non-exempt assets owned by the debtor that can be used to satisfy a judgment. While the turnover process typically only involves requiring the judgment debtor to turn over property, a court may in some circumstances order any other person or entity holding a debtor’s non-exempt property to turn that property over to aid in collection.
Garnishment proceedings are also available to those who have secured a monetary judgment in Texas. Much like the pre-judgment garnishment process, the post-judgment garnishment process allows a judgment creditor to reach a debtor’s non-exempt assets that are in the possession of a person or business not involved in the litigation. Post-judgment garnishments can be complicated and even involve a trial on the merits.