It seems simple. You have a court judgment against a vendor or client, but they haven’t paid. Now, it is time to force the issue. Unfortunately, business debt collection can be complex in Texas.
People and entities with judgments against a recalcitrant debtor can force them to sell any non-exempt real property in order to pay that judgment. However, many debtors don’t have any non-exempt property. They either have exempt property only or they have no real property at all.
For example, their homestead (a house and up to one acre in urban areas of up to 200 acres in a rural area) is exempt. Their current wages, many unpaid commissions and health aids are exempt. Their personal property is exempt up to $30,000 for an individual and $60,000 per married couple. This generally includes:
- Home furnishings, including family heirlooms
- Provisions
- Farming or ranching vehicles, implements, tools, equipment, and motor vehicles or boats used in trade
- Clothing and most jewelry
- Two firearms
- Athletic and sporting equipment
- A four-wheeled vehicle for each member of the household who has a driver’s license
- Certain farm animals and forage necessary to feed them
- Household pets
- Cash surrender value of certain life insurance policies
If your debtor doesn’t have any exempt property, you won’t be able to force a sale to pay the judgment.
If you’re trying to collect a business debt, call a business law attorney
It’s not true that there are no remedies against business debtors who have no exempt property, but the remedies are harder to achieve.
First, wait for the deadline to appeal the judgment has passed. This is typically five to 10 days from the issuance of the judgment.
If you believe your debtor may have non-exempt real estate, you can obtain an Abstract of Judgment from the county where that property is located. This informs the county that you have a judgment against the debtor and creates a judgment lien on any real estate in that county. This will cause a notation on the debtor’s credit report.
Thirty days after the judgment is issued, you can obtain a Writ of Execution, which allows you to seize the debtor’s non-exempt property. This should not be done unless you can show the debtor has non-exempt property.
There may be additional remedies available, but they take time and effort. A business law attorney with experience in debt collection can help you determine what rights you have and pursue your judgment vigorously.