A judgment is a piece of paper signed by a Judge that states you owe a creditor a certain amount of money plus interest, accruing at the post judgment interest rate allowed by law. A judgment by itself is relatively harmless.

A judgment is the result of a creditor winning their lawsuit against you. Whether they win by trial, or if you simply don't respond to the lawsuit, either way a judgment will occur.

Chad Johnson Managing Partner

A judgment becomes a problem when it is abstracted by the creditor. The process of abstracting a judgment is what makes a judgment public record and provides the creditor the ability to seize assets that you own to satisfy the judgment. What property can they come after? They can seize any non-exempt property. Which begs the question, what is safe, or exempt, property?

The following property is exempt from collection, meaning that your creditor cannot take these items (the full list can be found in Section 42 of the Texas Property Code:

• Your Homestead
• Home Furnishings
• Clothes
• Jewelry up to $7,500.00
• Two Firearms
• One Automobile per person
• Most Retirement Accounts

essentially all of the necessary things on which you rely on to live day to day.

So what can be taken from you? Everything else. The most popular asset that can be seized would be a rental property or other real estate that is not your homestead. Trailers and excess vehicles are also fair game, the most popular one being your Harley Davidson Collector's Edition motorcycle.

What if you don’t own any non-exempt property that can be seized? Well, unfortunately Texas does not offer an exemption for bank accounts. So this leads us to the most common method of how creditors collect on judgments: Bank Account Garnishments. Yes, a creditor can freeze your bank account to satisfy the full amount of the judgment.

A judgment expires after 10 years, however creditors can simply renew judgments over and over indefinitely. The process of renewing a judgment is fairly simple by filing the proper paperwork with the court system. Thereafter, the judgment renews for an additional ten years. It has drastic negative effects on your credit, especially once it is abstracted, and can even cloud title to your homestead making it difficult to sell. Judgments are a big problem and simply do not just disappear, despite the common misconception and belief.

A judgment can be resolved one of two ways: 1) settlement or 2) bill of review. Settlement means offering to pay the creditor a reduced amount in exchange for both a promise to not freeze your bank account and to release the judgment at a later date. A bill of review is a less-commonly used method of fighting the service of the underlying lawsuit that caused the judgment. In essence, if you can allege that you were not properly served with the lawsuit that caused the judgment, you may have grounds for a successful bill of review.

Fighting a judgment here in Texas is an uphill battle, and not one you should attempt alone. We are ready to step in on your behalf to get your judgment overturned or removed. Contact us today and let's work together to get your judgment resolved.

The information contained in this webpage is for general information and educational purposes and is not legal advice. Reading these posts does not create an attorney / client relationship with the law firm of Johnson & Bryan.