January 1, 2012

Judgment in Texas on unsecured debt - Options?

An unsecured creditor has obtained a judgment against me here in Texas. He is now demanding I turn over all sorts of personal financial information. Can I fight this and can I overturn this judgment? I understand it would have been better before the judgment; but, that's no longer where I'm at.

I'm married and currently unemployed and would prefer not to declare bankruptcy.

I don’t know what was intended by your expression “subpoena for financial information" other than that the OP was summoned or noticed to appear before a formal post judgment debtor’s examination.

And if so, I fail to see how the OP could be held in contempt of court for his failure to comply/appear inasmuch as there is no specific provision under Texas law providing for such a process.

Apparently the OP has either received “Written Interrogatories in Aid of Judgment” or a "Notice of Deposition/Subpoena Duces Tecum Pursuant to Rule 176 of the Texas Rules of Civil Procedure, or perhaps both. But I suspect the former.

In other words, in Texas the post-judgment means of discovering non-exempt assets of the jdugment debtor is conducted under Texas’ discovery rules.

If thereby having discovered any such assets, and "they cannot be readily levied upon by the sheriff under normal legal processes", the judgment creditor can apply to the appropriate court for a Turnover Order pursuant to Section 31.002 of the Civil Practice and Remedies Code.

Which order will direct the debtor to surrender any such non-exempt assets (together with all documents pertaining thereto) to a named sheriff or constable - or in the alternative, order the appointment of a "receiver" to take physical charge of the assets.

THEN in case of "refusal or disobedience" the judgment debtor can be held in contempt (Section 31.02(c)

Or, be cited for contempt of court after the issuance of an order compelling post-judgment discovery.

For all of which the judgment creditor might (cant say for sure) be entlted to recover attorney fees actually incurred.

Did you even bother to go to court over this lawsuit before the unsecured creditor was awarded a judgment? THAT would have been the time to dispute the facts and make your efforts to avoid the judgment altogether.

Depending on how long it's been since the judgment was issued against you, you MAY be able to file a motion for a new trial (within 30 days after the judgment was issued) or filing an appeal of the judgment (not sure, but again, I believe that's 30 days from the date the judgment was issued).

I suspect that it's already too late to file a Motion for New Trial or for an appeal, since you have already received a request for your personal financial information that they can use to collect the judgment. Most jurisdictions require that the appeals timeframe be expired already before the judgment creditor begins their collection efforts, otherwise they might be in vain. At this point, they are demanding that info, and the courts will support it, in order to allow for the creditor to obtain whatever information they need and can use to find any money or assets you have that can be used to satisfy the debt. Can you fight it? You can try, but chances are that you will lose. Although the courts won't do the direct collection for the creditor, it DOES supply legal support to those working to collect those debts. If there are any bank accounts, financial assets, valuable items such as vehicles, real estate, or other collateral that can be sold to satisfy the debt, the court will require that you give up that information.

Don't want to pay? Then it looks like bankruptcy might be an option for you.