Bad Business
You have a dispute with someone as a result of a business transaction that went sour. After attempting to settle it peacefully, you finally broke down and filed a lawsuit. Because you were in the right, the Court ruled in your favor and awarded you a judgment. However, your opponent refuses to send you a single dime, now what?
With a judgment in hand, you've got a few options. You can seek an Abstract of Judgment, a Writ of Execution, or a Writ of Garnishment; but this is by far an all inclusive list of options.
Obstacles
One of the major obstacles facing you as you attempt to collect your judgment stems from who you are attempting to collect from. If you are attempting to collect from an individual person, you will face many hurdles, because there are many exemptions under the law that protects their property from collection. However, since we are discussing collections from businesses, you'll be glad to hear that there are very few exemptions from collection.
Abstract of Judgment
This is usually the first method used in collecting a judgment. An Abstract of Judgment creates a lien on your opponent's non-exempt real property. The Abstract of Judgment should be filed with the County Clerk in every county where they own real property to give you a greater chance of success in recovery.
Writ of Execution
In my own personal view, this is one of the most embarrassing methods of recovery for a judgment debtor. A Writ of Execution allows the Sheriff to go to their business with trucks and start collecting non-exempt property. The Sheriff then sells the property at auction and turn the proceeds over to you to satisfy the judgment.
Obviously there is much more to it than this, but you get the general idea of how it works.
Writ of Garnishment
This method is usually saved for last because it is fairly harsh and is expensive to pursue compared to the other methods. Also, the Writ of Garnishment is only available if, "within the plaintiff's knowledge, the defendant does not possess property in Texas subject to execution sufficient to satisfy the debt."
The Writ of Garnishment allows you to collect your opponent's property that is held by a third-party, such as money held in a bank account, safe deposit box, etc. If you have to resort to this method, you'll essentially have to file another suit because it will be assigned a new cause number and pay a new filing fee.
Preferred Method
Unfortunately, there is no silver bullet in this area of law and I can't tell you the best method to use. Each case is different and requires a different approach, and sometimes a combination of more than one of the above described collection methods. The above is only meant to give you a cursory overview of some options and not nearly detailed enough to be relied upon as a guide to the relevant law.
You and your attorney should sit down and discuss your goals and formulate a plan to attempt to collect what is owed to you. Regardless of how you choose to proceed, you will certainly need patience because collection of judgments is rarely a speedy affair.
--Authored by Matthew L. Harris, Esq.,
Matthew Harris Law - Business Law Division
1001 Main Street, Suite 806, Lubbock, Texas, 79401-3322,
(806) 318-8482
Great post on an important subject, Matt! My dad just today told me a story about collecting a debt a number of years ago. His client got a judgment against a convenience store, but the store owner would never pay up. So one day, Pop rented a tanker truck, brought along the sheriff and a writ, and arrived at the store concurrent with that day's gasoline delivery. Store owner had the ultimatum of either pay or lose his gas. He paid.
ReplyDeleteThat is an outstanding story, Adam! I would love to have seen the look on that store owner's face when he realized what was happening.
ReplyDeleteThat was smart of your dad to think of that; I'm going to keep that in mind in the future. Thanks for sharing.