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Many creditors try to obtain repayment for the debt owed to them and have difficulty accomplishing this task.  Debtors might intentionally avoid creditors.  Another hurdle, particularly for creditors who are attempting to receive repayment from debtors residing in Texas, is the fact that Texas laws are extremely protective of debtor's interests. 

Additionally, under Texas Civil Practice and Remedies Code Section 16.004(a)(3), creditors generally have up to four years from the time the cause of action accrued to file a legal action for debt owed.  To ensure that creditors obtain repayment for debt owed to them, it is important to navigate through existing federal and state laws knowledgably and effectively.  An attorney who has experience handling debtor/creditor issues can assist you in obtaining the money you rightly deserve.  

Texas Homestead Exemption

Under Texas Property Code Section 41.001, if one's home is declared to be a "homestead," then it is exempt from seizure by creditors, which means that a creditor cannot induce the debtor to sell the home.  However, debts that result from purchasing the home, such as mortgages, or debts incurred for home improvements and refinance of a lien against the homestead, are not exempt.  Additionally, other limitations on the homestead exemption exist. For example, only the homeowner's principal residence can qualify, the homeowner has to be an individual and not a corporation, and the urban homestead is limited to 10 acres.

Personal Property Exemptions

Texas law also protects certain personal property from being seized, attached, or garnished by a creditor.  Under Texas Property Code Section 42.001, a creditor cannot attach or seize property that is for a family and has an aggregate fair market value of not more than $60,000, exclusive of the amount of liens and security interests encumbering the property. 

Alternatively, if the debtor is single with no family, and owns personal property having an aggregate fair market value of not more than $30,000, exclusive of any liens or security interests encumbering the property, the debtor can still have this property exempted.  Some types of personal property that are exempt under Texas law include home furnishings, farming vehicles, and clothes.

An experienced commercial transactions attorney can help creditors maneuver through Texas laws so that they can get the compensation they are rightly owed, or at the least, obtain a judgment before expiration of the applicable statute of limitations. 

Wage Garnishment in Texas

Generally, under Texas Property Code Section 42.001(b), a creditor cannot garnish a debtor's wages to repay a debt.  However, wages can be garnished to pay for court-ordered child support, student loans that are in default, and back taxes.  Another important note is that if a debtor is self-employed, then the money earned from customers are not "wages" and may be garnished once the creditor gets a writ of garnishment.  A creditor cannot obtain a writ of garnishment, however, until the creditor has obtained a court judgment against the debtor for the debt owed.  In some cases, reasonable attorney's fees can be awarded, in addition to the amount of the debt.

If you are a creditor seeking repayment from a debtor, a commercial transactions attorney can assist you in filing a lawsuit against the debtor and collecting the money owed to you.  At the very least, your judgment for the debt should be abstracted (filed of record with the county clerk) in case the debtor's financial situation changes in later years.  Remember, your judgment lien, if properly abstracted, can last for up to 10 years.  Also, if you are a creditor being sued for violating a debt collection law, it is important to retain competent legal counsel to represent you.  If you are seeking a knowledgeable, experienced commercial transactions attorney who knows the "ins and outs" of debtor/creditor issues, contact the Law Office of Philip W. Boyko immediately to schedule your initial consultation.  

Law Offices of Philip Boyko

Attorney at Law
4615 Southwest Freeway
Suite 600
Houston, Texas 77027
Telephone: 713-626-2221
Fax: 713-626-0182


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