The last couple of years have been good to Ray Sea the owner of Barely a Wake Marine Dealership in Palacios, Texas. Sales of the boats he manufactures are trending up. However, so are Ray’s accounts receivable. Hull Sizer, a purchaser of Ray’s superior Barely a Wake beauties, was over 180 days past due. Ray went to his lawyers for advice.
The right question is, “can Barely a Wake collect from Hull Sizer if it does get a judgment?” Predictably Ray’s lawyers told him that anyone can file a lawsuit.
Tilting the Scales in Your Favor. The best question for Ray Sea and Barely a Wake Marine Dealership to consider is not just whether the lawsuit can be filed or is any good, but whether Hull Sizer has sufficient non-exempt assets to pay a Barely a Wake judgment.
Collecting a Texas Judgment. A judgment creditor may only collect in Texas against property that is not exempt. Assuming that Barely a Wake does get a judgment against Hull Sizer and believes that Hull has non-exempt property, it may follow these steps to try to collect its judgment.
When? First allow the appeal time on the trial court judgment to run out, which is ten days in Justice and Small Claims Court and thirty days in County Court at Law or District Court. Before the appeal time runs, Barely a Wake can file an Abstract of Judgment in the deed records of any county where it believes Hull Sizer owns real property. Doing so creates a judgment lien on the debtor’s real estate in that county and should be picked up by credit reporting agencies and noted on the debtor’s credit report.
What is considered not exempt property? Any non-exempt property is subject to a Writ of Execution issued by the Clerk of the Court where the judgment was obtained. Generally speaking (and there are exceptions and clarifications for each), Barely a Wake may not seek to satisfy its judgment against Hull’s homestead, the cash surrender value of certain life insurance policies, his retirement plan and his current wages (held by his employer except court ordered child support). Also exempt from execution is the first $60,000 of Hull’s family personal property (30,000 for Hull personally) that fits into one or more of the following categories: home furnishings, family heirlooms, wearing apparel, tools and equipment used for trade, athletic and sporting equipment, two firearms, farming or ranching implements and vehicles, 60 head of livestock other than cattle, 12 head of cattle and a two-, three- or four-wheeled vehicle, household pets, and more.
How long? If not paid, the Barely a Wake judgment can stay on Sizer’s credit report for 10 years. If the judgment is not paid within 10 years, then it can be renewed by Barely a Wake for another 10 years and so on.