What Personal Property Can Be Seized in a Judgment in Texas? | Kretzer (2024)

If you’ve recently lost a judgment, your mind may be filled with questions and concerns like:

• “Is my property safe?”
• “Will I have a place to live?”
• “Will I have a car to get to work?”

The answer is the State of Texas is generally “yes” to all of these questions, and with the help of a seasoned attorney, you can rest assured that you will know what real estate and personal property is safe from collection efforts and what steps to take to forge ahead towards a debt-free future.

For more information, continue reading or contact Houston judgment defense lawyer Seth Kretzer today.

What Personal Property Can Be Seized in a Judgment?

Personal property that can be seized in a judgment is the type of property that does not meet one of the numerous exemptions available under the Texas Constitution, Texas Property Code 41.001, Texas Property Code 42.002, Texas Property Code 42.0021, the Texas Homestead Law and other applicable laws. If that seems like a lot of legal protections, it is. Texas is a virtual stronghold of property protections from creditors and is one of the safest states to lose a judgment in the United States.

For most families, property that can be seized in a judgment is a small percentage of what people own. The type of property that can be seized may seem like a luxury to a person faced with collection efforts – such as jewelry above a certain protected amount, a hunting or fishing cabin, a timeshare or other vacation home.

Exempt Property in Texas

If you are facing judgment from a creditor, you should know that the State of Texas offers a variety of protections for property for the average-income family, which has legal roots dating back to the state’s first settlers. Many of these settlers were themselves seeking to escape the financial burdens of judgments in their home states and start over.

These are called “exemptions,” and the property subject to legal exemptions is referred to as “exempt property.” Assets that can be seized in a lawsuit exclude the following under the Texas Constitution, Texas Property Code 41.001, Texas Property Code 42.002, Texas Property Code 42.0021, the Texas Homestead Law and/or other applicable state laws:

• The primary urban or rural residence of a debtor and surrounding acreage (the “homestead”)
• Cemetery plots purchased and intended for use by the family
• Up to $50,000 of personal property for an individual
• Up to $100,000 in personal items for a Texas family
• Home furnishings
• Provisions for consumption; livestock, farm implements
• Tools, equipment, books, and vehicles used for work in a trade or profession
• Jewelry and family heirlooms
• Athletic and sporting equipment
• A motor vehicle for each member of the household with a driver’s license
• Funds in college savings plans
• Retirement plans and accounts
• Clothes
• Firearms
• Pets and more.

The list above and even more items are exempt from debt collection under Texas laws from judgment, and the owner can make a claim of exemption of enforcement of judgment in the event a creditor tries to seize these assets.

These legal exemptions form the basis of our answers to some of the Frequently Asked Questions about exempt property in Texas which follow below.

Can a Creditor Take My Car?

One of the most common questions we answer is, “Can a judgment creditor take my car if I lose a judgment?”

There are a few points to consider in relation to cars. If you financed your vehicle, you may have entered a contractual arrangement that gives the bank the legal right to take possession of the car after a certain number of payments are missed. This scenario is a matter of contract law, however, and this scenario is separate from the idea of a judgment creditor being able to take your car after you lose a judgment. (For this reason, if times are getting tough, you want to remember to always pay your car bill ahead of unsecured debts, like credit card bills).

Under Texas Property Code 42.002 (9), “a two-wheeled, three-wheeled, or four-wheeled motor vehicle for each member of a family or single adult who holds a driver’s license or who does not hold a driver’s license but who relies on another person to operate the vehicle for the benefit of the non-licensed person” is exempt from seizure as part of a judgment. This means you most likely will still have your car to get to work, your teenager or young adult will still have their car to get to school, and you will be able to remain road-worthy to conduct your personal affairs as you work toward resolving the judgment against you.

Can a Creditor Take My House?

Another common question we answer is whether creditors can come after your house. A creditor in Texas cannot take your primary home away through a judgment on real estate or other judgment enforcement efforts.

In fact, Texas offers some of the strongest protections in the United States for the “homestead,” which is defined as a house and up to ten (10) acres of land in an urban area like the Houston-Galveston Metro area; a house and up to one-hundred (100) acres of rural land for a single person; and a house and up to two-hundred (200) acres of rural land for a family under Texas Property Code §41.001.

Non-Exempt Property in Texas

What can creditors take from you? The answer is “non-exempt property.” Non-exempt property is anything that is not exempt from debt collection because it does not meet the criteria for an exemption under the Texas Constitution, Texas Property Code 41.001, Texas Property Code 42.002, Texas Property Code 42.0021, the Texas Homestead Law and other applicable laws.

This type of property is what property can be seized in a judgment. The key is to start with the applicable laws and look for exemptions, making an itemized list of what you have and where it falls. Whatever falls outside of the exemption, which is likely a small amount of property, may be subject to seizure.

Can I Buy a House with a Judgment against Me?

If you are buying a house in a cash transaction, there will be no need to run a credit check. But most people are not so fortunate, and the average home buyer needs to take out a mortgage in order to pay for a new home. It will be difficult to buy a house with a judgment against you due to credit checks, though there are several ways that the Law Offices of Seth Kretzer can help you be in the best position possible in the home-buying market.

From the banks’ perspective, who will be reviewing your application for the mortgage and running credit checks on you, having a judgment on your credit is potentially worse than default or even foreclosure. This is due to the well-known time and expense that went into your creditor hiring an attorney, filing a lawsuit, and taking the necessary steps to collect a judgment in Texas.

Plus, there is the fact that the creditor won the lawsuit, which means you could not pay a debt you owed and does not bode well for trying to take on another debt. So, while getting a mortgage with a judgment on your credit isn’t impossible, it’s certainly no easy task.

One way to improve your chances of qualifying for a mortgage is to satisfy your judgment. Another way is to write potential lenders a hardship letter explaining why you have a judgment against you. Otherwise, creditors will see that there is a judgment and for how much, but they won’t get any other details about the situation.

Perhaps a major medical issue, family member who needed one-time assistance, or other situation beyond your control led to the financial problems that resulted in the judgment. If you feel there is a compelling reason for a lender to overlook your judgment, we can help you draft a letter to explain your situation.

Can I Sell My House If I Have a Judgment against Me?

This is where things get a little more complicated because even though a creditor cannot seize your homestead in Texas, they can still file a lien against it.

What is a judgment lien on real property? The answer is it’s a legal document that the creditor records in the county office that has the power to “cloud” your title, meaning that you don’t own the home “free and clear,” and thus, you are not in a good position to sell it. Many creditors will do this with the help of judgment liens attorneys in Houston, knowing they can’t seize the home or force a sale, as leverage to receive a payment for the judgment.

Although it is a well-established law that in Texas a judgment creditor can’t take your home away from you, problems surface when a homeowner attempts to sell or refinance. This is where the lien shows its teeth. The judgment lien will prevent the sale/refinancing until the lien is released by the appropriate second document filed in the county clerk’s records.

Working with a skilled attorney like Mr. Kretzer, you can send a letter to the attorney of the creditor requesting a “partial release of the lien” as to the homestead property only. If the judgment creditor signs it, the judgment lien will continue in existence and the homeowner will still be liable for the creditor’s judgment, but your liability will no longer cloud the title of the homestead property.

The creditor’s attorney can be encouraged through our negotiation efforts to sign the partial release document or face a claim for “slander or title” that will cost the creditor money.

Judgment Lien on Personal Property for Money Owed

There are two important things to remember in terms of liens against personal property: the many exemptions available against seizure under Texas laws, and the reality that selling personal property, unlike selling a home or a vehicle, does not require any type of title document.

Even if a creditor attempts to put a lien on your personal property, if that property is exempt property, you can sell the property and use the proceeds from the sale to help pay off your judgment.

Get Help with Post-Judgment Issues from Creditors

If you wish to know more about creditor judgments in the State of Texas and how they may affect your personal property or real estate, contact the Law Offices of Seth Kretzer today to discuss your case.

Seth is an attorney with specific experience in this area of law and possesses the right knowledge, tools, and resources to help you.