TEXAS THREAD - For those living in TX

[TomnTex]

This thread is just for posting info pertint to TX, not to answer questions. Welcome to the board and copy and paste your info above and make yourself a new thread.

[TomnTex]

In Texas you can do a DV letter anytime you want, for it to be effective, you must quote the TFC-392 in doing so. Also, if they do not respond. Follow up with this:

 

Dear XXXX:

 

On September XX, 2013, I mailed you a certified letter requesting validation of the above referenced account.  In that letter, I invoked my rights under Texas Finance Code (TFC) 392 and requested a deletion of the above referenced account from all credit reporting agencies (CRAs) in the event that you could not or would not provide proper validation within thirty (30) days.

 

Thirty (30) days has now passed, and you have not provided me with the required written validation, nor have you deleted the trade line from all credit reporting agencies.  You are now in violation of TFC 392.

 

In that original letter, dated September 13, 2013, I gave you a sixty (60) day right to cure notice.  There are thirty (30) days remaining on that notice, after which time I am legally permitted to seek further civil action.  

You have thirty (30) days to delete this trade line from all CRAs to which you report.  Failure to do so will result in legal action in XXX County, Texas for your violations of TFC 392 and Deceptive Trade Practices-Consumer Protection Act § 17.41 of the Business and Commerce Code.

 

Sincerely,

[TomnTex]

So that you can find it easier:

 

Texas State Laws, Statutes, Links and Websites:

http://www.law.corne...exas.html#codes

NEW TX law changes effective 9/1/03 regarding FDCPA...

http://www.capitol.s...xt/SB00533F.HTM

 

Texas Debt Collection Act:
http://www.occc.stat...CL_toc.html#392


The validation provisions are specific to 3rd party debt collectors and credit bureaus -- everything else is applicable to all debt collectors (including OC's and in-house collections, anyone collecting).

Texas Deceptive Trade Practices-Consumer Protection Act:
http://www.capitol.s...00.htm#17.01.00

Texas Regulation of Consumer Reporting Agencies Act:
http://www.capitol.s...00.htm#20.01.00

Texas UCC:
http://www.capitol.s...utes/bctoc.html (UCC is all of Title 1)

Other good links:
http://www.law.uh.ed...protection.html

 

http://www.statutes.legis.state.tx.us/
 

UPDATED:

 

TX Business & Commerce Code (updated)

 

Moving from another state SOL info:

§ 16.067. CLAIM INCURRED PRIOR TO ARRIVAL IN THIS
STATE. (a) A person may not bring an action to recover a claim
against a person who has moved to this state if the claim is barred
by the law of limitations of the state or country from which the
person came.

( A person may not bring an action to recover money from a person who has moved to this state and who was released from its
payment by the bankruptcy or insolvency laws of the state or country
from which the person came.

© A demand that is against a person who has moved to this
state and was incurred prior to his arrival in this state is not
barred by the law of limitations until the person has lived in this
state for 12 months. This subsection does not affect the
application of Subsections (a) and (.

 

 

 

 

 

[TomnTex]

TEXAS Land lord laws:

 

TX Landlord Tenant Laws Generally Applicable to All Tenancies

TX Landlord Tenant Laws for Residential Tenancies

TX Landlord Tenant Laws for Manufactured Home Tenancies

[texasrocker]

Recent TRCP changes applying only to JP court cases:

Edit:  2021 updated link.

http://www.txcourts.gov/media/1452232/trcp-combined-effective-january-1-2021.pdf  (See Part V)

Excerpt from the Texas Supreme Court order-

Rules of Civil Procedure 500-510 govern cases filed on or after August 31, 2013, and
cases pending on August 31, 2013, except to the extent that in the opinion of the court their
application in a case pending on August 31, 2013, would not be feasible or would work injustice,
in which event the formerly applicable procedure applies. An action taken before August 31, 2013,
in a case pending on August 31, 2013, that was done pursuant to any previously applicable
procedure must be treated as valid. Where citation or other process was issued or served prior to
August 31, 2013, in compliance with any previously applicable procedure, the party served has the
time provided for under the previously applicable procedure to answer or otherwise respond.

[walterg55]

A misunderstood portion of the 60 day notice to cure is that for the notice to be valid, it must explicitly state the damages you have incurred and a dollar amount for each category of damages. Failure to do so allows the opposing party to file a Motion for Abatement. This will not dismiss the case and you are allowed to cure the deficiency. Using the 60 day notice without the damages provision being correct is a dead giveaway to the other sides attorney

[stacey66]

what a great work.

[houtxman]

Recent TRCP changes applying only to JP court cases: 

 

http://www.hro.house.state.tx.us/pdf/ba821/hb0079.pdf

http://www.supreme.courts.state.tx.us/rules/trcp/trcp_part_5.pdf

 

(If the .pdf file shows up illegible then download it and open with Adobe Acrobat)

 

 

Excerpt rom the Texas Supreme Court order-

Rules of Civil Procedure 500-510 govern cases filed on or after August 31, 2013, and

cases pending on August 31, 2013, except to the extent that in the opinion of the court their

application in a case pending on August 31, 2013, would not be feasible or would work injustice,

in which event the formerly applicable procedure applies. An action taken before August 31, 2013,

in a case pending on August 31, 2013, that was done pursuant to any previously applicable

procedure must be treated as valid. Where citation or other process was issued or served prior to

August 31, 2013, in compliance with any previously applicable procedure, the party served has the

time provided for under the previously applicable procedure to answer or otherwise respond.

 

Does anyone know what the change was the @donim74 is referring to here >> ??

 

He mentioned a change in the way Rules have changed in Texas.   I dont know that anyone is sure what this new change was exactly and how to counter it or work within the new rules..   The judge told him that a month before  his trial he would have been correct in the way he presented his objections.  However all of his objections were overruled and in effect he lost.   I think it could be beneficial to anyone reading the Texas threads..

[Just Me 78631]

Disputing the Existence of Deemed Admissions

 

Facing alleged deemed admissions, and disputing them

This post discusses fact issues relating to the existence of deemed admissions, and related defense strategies, which are procedural and evidentiary in nature. Separate blog posts address, or will address, other defensive strategies: (1) A motion to strike or un-deem, which is appropriate in a situation when the existence of deemed admissions cannot be in good faith denied; and (2) a challenge to deemed admissions on the grounds of legal sufficiency (or rather insufficiency) when the plaintiff offers no other evidence, or the other evidence is either not sufficient to entitle the plaintiff to judgment, or not admissible. The latter strategy may even be invoked post-judgment and/or on appeal.

THE DEEMED ADMISSIONS RULE

Rule 198.1 of the Texas Rules of Civil Procedure entitles a litigant to serve requests for admissions on another party. Tex. R. Civ. P. 198.1. Depending upon the time they are served, the party to whom they are addressed has thirty or fifty days to respond to them. Tex. R. Civ. P. 198.2(a). Should the receiving party's response be untimely or nonexistent, each request is deemed admitted without the necessity of a court order. Id. at 198.2©.

Texas Rule governing Requests for Admission (RFA) and Deemed Admissions

(click on image to enlarge) DISPUTING THE EXISTENCE OF DEEMED ADMISSIONS

Parties may use deemed admissions as a substitute for evidence, either for summary judgment purposes, or at trial. While the rule states that no court order is required for deemed admissions to arise under the rules governing requests for admissions, the proponent of deemed admissions must nevertheless establish that deemed admissions even exist in order to take advantage of them.

Such proof has two components: Proof of service on a specific date, and proof of non-response before the date responses were due, based on the date of service.

When facing a motion for summary judgment based on deemed admissions, a defendant may have several options, depending on the circumstances: (1) filing evidence of non-receipt in the form of an affidavit, and thereby rebutting any presumption of receipt; (2) pointing to lack of anything giving rise to a presumption of receipt in the first instance; (3) pointing to absence of a certificate of discovery mentioning service of a request for admissions, or failing to show the date of such service (combined with the absence of evidence of service).

At trial, the defendant may testify about non-receipt, but if he or she is represented by counsel, the client's testimony about non-receipt would carry (even) less weight because any request would have been served upon his or her attorney of record pursuant to Rule 8. The best evidence of non-receipt may be an returned envelope bearing notation or rubber stamp to the effect that delivery was attempted but not successful. That evidence, of course, would be in the possession of the attorney or law firm that tried to serve the requests and may then be trying to rely on deemed admissions.

Were the requests for admissions served? ... and if so, when?

In order to rely on deemed admissions in lieu of evidence, the proponent must establish that the requests for admissions were served in compliance with the rules of civil procedure. Such a showing can be made with with a certificate of discovery and a certificate of service appended to the requests for admissions.

The difference between the two is that a certificate of service is to be filed with the court, while discovery requests themselves are not supposed to be filed with the court. Therefore, if the proponent wishes to rely on the latter, it must attach a copy of the certificate of service that certifies that the RFAs were properly served upon the defendant or his/her attorney of record on such and such date. The date is essential because it controls the deadline to respond.

Unless the request for admissions itself is already on file with the court (a practice the rules do not condone), the proponent will also have to submit a copy of the requests. Otherwise, the court would not know what propositions the other party admitted by failing to respond. Even if deemed admissions exist, the nature of the admissions must be such as to establish the essential elements of the Plaintiff's claims (or the Defendant's affirmative defense, should the defendant wish to use deemed admissions against the Plaintiff.) Therefore, the existence of deemed admissions does not necessarily guarantee that the party in whose favor they operate will win.

The presumption of receipt is rebuttable, assuming it even arises in the first instance

Service in conformity with Rule 21a, as certified by means of a certificate of service, creates a presumption of receipt.

Rule 21a of the Tex R. Civ. P. provides for several methods of service.

Regular first class mail is not one of them. Certified mail is. A certificate by a party or attorney of record is prima facie evidence of the fact of service. Accordingly, rule 21a creates a presumption that documents mailed as provided in the rule were received by the addressee.

However, the opposing party may rebut that presumption by offering proof that the document was not received. The rule expressly provides for this situation by stating that "[n]othing herein shall preclude any party from offering proof that the notice or instrument was not received".

But there is twist: Even when a party does not receive actual notice of requests for admissions, where the serving party has complied with the requirements of rule 21a, "constructive notice" may be established if the serving party presents evidence "that the intended recipient engaged in instances of selective acceptance or refusal of certified mail relating to the case." To take advantage of the exception, the proponent of deemed admissions must adduce additional extrinsic evidence to establish that the defendant was dodging service of the discovery requests.

Is there evidence of non-response? And if so, is such evidence competent?

Deemed admissions arise automatically if the party to whom they are directed does not respond. Therefore, in order to used deemed admissions in lieu of evidence, the proponent must not only establish fact and date of service, but also of non-response by the other party before the deadline.

That proof requirement is most easily met with a response that affirmatively reflects its untimeliness. If the other party never responded at all, however, the proof requirement is more difficult because the absence of a response could have been caused by other reasons, such as mail having been lost by the post office (probably a dubious claim in most cases given that the rules require certified or registered, rather than regular mail) or the response having been lost or misplaced, or misfiled, in the law office handling the plaintiff's case. Debt collection attorneys typically work in (or for) high-volume law offices, so a certain error rate in processing mail can be expected. Additionally, because of the high volume, it is likely that no one person will handle all incoming mail, with the effect that no one person will know what happened to any one particular piece of mail or a particular fax.

Unless the court is satisfied that the absence of a certificate of service certifying service of responses to request of admissions is sufficient, the proponent of deemed admissions will have to present sworn testimony as to nonreceipt. For summary judgment purposes, this would be in the form of an affidavit; on occasion of a trial, it would have to be through live testimony, or an affidavit to which the Defendant does not object on hearsay or other grounds.

A plaintiff's attempt to establish nonreceipt is typically subject to challenge on the grounds that the witness/affiant does not have or would not have personal knowledge. For summary judgment purposes, the affiant would have to establish non-receipt based on routine business duty to process and record incoming mail. The attorney of record will hardly be the one to process mail pertaining to hundreds, if not thousands, of pending case and will arguably not be in a position to establish the fact of nonresponse based on absence of a response in the files of the lawfirm that handles litigation for the bank of debt buyer. Additionally, attorney testimony is frowned upon because attorneys are not supposed to appear as witnesses, at least not on substantive matters other than reasonableness and necessity of attorney's fees.

As for establishing non-receipt at trial, it is normally not practical to have a legal secretary, mail processor, file clerk or law firm staffer appear as a witness; and in many cases it is not even practical for the attorney of record to whom all documents are to be mailed under Rule 8) to try the case.

Rule 8 of the TRCP requires that motions and discovery be directed

to the attorney of record of a represented party. Many big debt collection lawfirms use an attorney other than the one that signed the first pleading or even a local appearance attorneys. An attorney who merely handles the trial portion of a case would not be in a position to know that a discovery response was not received (not to mention, never served) merely because she does not actually have the document in her briefcase, or in the on-line folder made available for her use on the law firm's secure website or cloud storage facility. The trial court judge may or may not believe her representation about what was served and received, or not received, but statements of attorneys and argument in court are not generally not admissible evidence, and are accordingly objectionable.

OTHER DEEMED ADMISSIONS ISSUES AND DEFENSIVE STRATEGIES

In addition to challenging the existence of deemed admissions on procedural grounds with respect to evidence of service and non-receipt, deemed admissions can also be dealt with in other ways, which are the subject of separate blog posts:

RELATED POSTS

Motion to un-deem deemed admissions / Motion to strike deemed admissions

Are the deemed admissions legally sufficient for judgment?

Rule 198.3 is the basis for a motion to "un-deem" deemed admissions,

although it does not use that term.

 

[Just Me 78631]

Is the debt collector legally authorized to collect debt in the State of Texas?

 

Residents of the State of Texas retain special consumer protections during the debt collection process. Once such unique protection not covered under Federal credit protection laws is the requirement that all third party debt collection agencies in Texas maintain active insurance via a surety bond.

 

How can I find out if the debt collector that has contacted me has an active surety bond in Texas?

The Texas Secratary of State maintains a Debt Collector Search that lists all debt collectors who have ever applied for a surety bond.

It also lists the date the surety bond was issued, the current status of the bond, the name of the surety company, and the surety bond number.

You can perform a search to determine if a debt collector has a surety bond by visiting the following link at the Secratary of State’s web site:

 

 

http://direct.sos.st...rs/DCSearch.asp

 

You can find a list of authorized surety companies by visiting this link:

 

http://www.tdi.state...html#surcompany

 

[houtxman]

Disputing the Existence of Deemed Admissions

 

Facing alleged deemed admissions, and disputing them

This post discusses fact issues relating to the existence of deemed admissions, and related defense strategies, which are procedural and evidentiary in nature. Separate blog posts address, or will address, other defensive strategies: (1) A motion to strike or un-deem, which is appropriate in a situation when the existence of deemed admissions cannot be in good faith denied; and (2) a challenge to deemed admissions on the grounds of legal sufficiency (or rather insufficiency) when the plaintiff offers no other evidence, or the other evidence is either not sufficient to entitle the plaintiff to judgment, or not admissible. The latter strategy may even be invoked post-judgment and/or on appeal.

THE DEEMED ADMISSIONS RULE

Rule 198.1 of the Texas Rules of Civil Procedure entitles a litigant to serve requests for admissions on another party. Tex. R. Civ. P. 198.1. Depending upon the time they are served, the party to whom they are addressed has thirty or fifty days to respond to them. Tex. R. Civ. P. 198.2(a). Should the receiving party's response be untimely or nonexistent, each request is deemed admitted without the necessity of a court order. Id. at 198.2©.

Texas Rule governing Requests for Admission (RFA) and Deemed Admissions

(click on image to enlarge) DISPUTING THE EXISTENCE OF DEEMED ADMISSIONS

Parties may use deemed admissions as a substitute for evidence, either for summary judgment purposes, or at trial. While the rule states that no court order is required for deemed admissions to arise under the rules governing requests for admissions, the proponent of deemed admissions must nevertheless establish that deemed admissions even exist in order to take advantage of them.

Such proof has two components: Proof of service on a specific date, and proof of non-response before the date responses were due, based on the date of service.

When facing a motion for summary judgment based on deemed admissions, a defendant may have several options, depending on the circumstances: (1) filing evidence of non-receipt in the form of an affidavit, and thereby rebutting any presumption of receipt; (2) pointing to lack of anything giving rise to a presumption of receipt in the first instance; (3) pointing to absence of a certificate of discovery mentioning service of a request for admissions, or failing to show the date of such service (combined with the absence of evidence of service).

At trial, the defendant may testify about non-receipt, but if he or she is represented by counsel, the client's testimony about non-receipt would carry (even) less weight because any request would have been served upon his or her attorney of record pursuant to Rule 8. The best evidence of non-receipt may be an returned envelope bearing notation or rubber stamp to the effect that delivery was attempted but not successful. That evidence, of course, would be in the possession of the attorney or law firm that tried to serve the requests and may then be trying to rely on deemed admissions.

Were the requests for admissions served? ... and if so, when?

In order to rely on deemed admissions in lieu of evidence, the proponent must establish that the requests for admissions were served in compliance with the rules of civil procedure. Such a showing can be made with with a certificate of discovery and a certificate of service appended to the requests for admissions.

The difference between the two is that a certificate of service is to be filed with the court, while discovery requests themselves are not supposed to be filed with the court. Therefore, if the proponent wishes to rely on the latter, it must attach a copy of the certificate of service that certifies that the RFAs were properly served upon the defendant or his/her attorney of record on such and such date. The date is essential because it controls the deadline to respond.

Unless the request for admissions itself is already on file with the court (a practice the rules do not condone), the proponent will also have to submit a copy of the requests. Otherwise, the court would not know what propositions the other party admitted by failing to respond. Even if deemed admissions exist, the nature of the admissions must be such as to establish the essential elements of the Plaintiff's claims (or the Defendant's affirmative defense, should the defendant wish to use deemed admissions against the Plaintiff.) Therefore, the existence of deemed admissions does not necessarily guarantee that the party in whose favor they operate will win.

The presumption of receipt is rebuttable, assuming it even arises in the first instance

Service in conformity with Rule 21a, as certified by means of a certificate of service, creates a presumption of receipt.

Rule 21a of the Tex R. Civ. P. provides for several methods of service.

Regular first class mail is not one of them. Certified mail is. A certificate by a party or attorney of record is prima facie evidence of the fact of service. Accordingly, rule 21a creates a presumption that documents mailed as provided in the rule were received by the addressee.

However, the opposing party may rebut that presumption by offering proof that the document was not received. The rule expressly provides for this situation by stating that "[n]othing herein shall preclude any party from offering proof that the notice or instrument was not received".

But there is twist: Even when a party does not receive actual notice of requests for admissions, where the serving party has complied with the requirements of rule 21a, "constructive notice" may be established if the serving party presents evidence "that the intended recipient engaged in instances of selective acceptance or refusal of certified mail relating to the case." To take advantage of the exception, the proponent of deemed admissions must adduce additional extrinsic evidence to establish that the defendant was dodging service of the discovery requests.

Is there evidence of non-response? And if so, is such evidence competent?

Deemed admissions arise automatically if the party to whom they are directed does not respond. Therefore, in order to used deemed admissions in lieu of evidence, the proponent must not only establish fact and date of service, but also of non-response by the other party before the deadline.

That proof requirement is most easily met with a response that affirmatively reflects its untimeliness. If the other party never responded at all, however, the proof requirement is more difficult because the absence of a response could have been caused by other reasons, such as mail having been lost by the post office (probably a dubious claim in most cases given that the rules require certified or registered, rather than regular mail) or the response having been lost or misplaced, or misfiled, in the law office handling the plaintiff's case. Debt collection attorneys typically work in (or for) high-volume law offices, so a certain error rate in processing mail can be expected. Additionally, because of the high volume, it is likely that no one person will handle all incoming mail, with the effect that no one person will know what happened to any one particular piece of mail or a particular fax.

Unless the court is satisfied that the absence of a certificate of service certifying service of responses to request of admissions is sufficient, the proponent of deemed admissions will have to present sworn testimony as to nonreceipt. For summary judgment purposes, this would be in the form of an affidavit; on occasion of a trial, it would have to be through live testimony, or an affidavit to which the Defendant does not object on hearsay or other grounds.

A plaintiff's attempt to establish nonreceipt is typically subject to challenge on the grounds that the witness/affiant does not have or would not have personal knowledge. For summary judgment purposes, the affiant would have to establish non-receipt based on routine business duty to process and record incoming mail. The attorney of record will hardly be the one to process mail pertaining to hundreds, if not thousands, of pending case and will arguably not be in a position to establish the fact of nonresponse based on absence of a response in the files of the lawfirm that handles litigation for the bank of debt buyer. Additionally, attorney testimony is frowned upon because attorneys are not supposed to appear as witnesses, at least not on substantive matters other than reasonableness and necessity of attorney's fees.

As for establishing non-receipt at trial, it is normally not practical to have a legal secretary, mail processor, file clerk or law firm staffer appear as a witness; and in many cases it is not even practical for the attorney of record to whom all documents are to be mailed under Rule 8) to try the case.

Rule 8 of the TRCP requires that motions and discovery be directed

to the attorney of record of a represented party. Many big debt collection lawfirms use an attorney other than the one that signed the first pleading or even a local appearance attorneys. An attorney who merely handles the trial portion of a case would not be in a position to know that a discovery response was not received (not to mention, never served) merely because she does not actually have the document in her briefcase, or in the on-line folder made available for her use on the law firm's secure website or cloud storage facility. The trial court judge may or may not believe her representation about what was served and received, or not received, but statements of attorneys and argument in court are not generally not admissible evidence, and are accordingly objectionable.

OTHER DEEMED ADMISSIONS ISSUES AND DEFENSIVE STRATEGIES

In addition to challenging the existence of deemed admissions on procedural grounds with respect to evidence of service and non-receipt, deemed admissions can also be dealt with in other ways, which are the subject of separate blog posts:

RELATED POSTS

Motion to un-deem deemed admissions / Motion to strike deemed admissions

Are the deemed admissions legally sufficient for judgment?

Rule 198.3 is the basis for a motion to "un-deem" deemed admissions,

although it does not use that term.

 

THanks so much for this!   This board is an invaluable tool!

[TomnTex]

For those in TX and elsewhere:

 

Starting in 2013, creditors are now required to place a reason code on the 1099C, explaining why the debt has been discharged. This was optional in previous years.

Depending on the code entered, the OC may give up rights to collect the debt.

The reason codes are:

A—Bankruptcy;
B—Other judicial debt relief;
C—Statute of limitations or expiration of deficiency period;
D—Foreclosure election;
E—Debt relief from probate or similar proceeding;
F—By agreement;
G—Decision or policy to discontinue collection;
H—Expiration of nonpayment testing period; or
I—Other actual discharge before identifiable event
event.

 

[TomnTex]

Watch those payday loans in Texas, you can end up in jail: Long article but read it.

 

http://www.texasobserver.org/cash-fast-how-taking-out-a-payday-loan-could-land-you-in-jail/

[TomnTex]

^{TEXAS REPO:}

 

<sup>http://www.whychat.5u.com/repoltr.html
http://www.whychat.5...r.html#resource

A deficiency results when the lien holder sells the vehicle for less than the consumer owes. Texas law prevents a lien holder from collecting deficiency payments from the consumer unless the lien agreement contains a clause granting such payments. A judge may not grant deficiencies to the lien holder otherwise.

Read more: Texas Auto Repossession Rules & Regulations | eHow.com http://www.ehow.com/...l#ixzz22JK5pyOm

The "60%" rule referes to the ability of the lienholder to levy a deficiency claim against the debtor once the car is sold at auction, it does NOT prohibit the repossession and sale.</sup>

 

<sup>Here are the links to the 2 State's Repo laws

http://www.repo-laws...-codes/ohio.htm

http://www.repo-laws...codes/texas.htm</sup>

 

[TomnTex]

JUDGEMENT'S IN TEXAS:

 

Any discussion of judgments in Texas needs to be broadly divided into two parts: first, the process of obtaining a judgment (which, after all, is only a piece of paper signed by a judge) and second, actually collecting on the judgment. The second part may be more challenging, since Texas is a state notoriously favorable to debtors. It is unconstitutional to garnish wages in Texas, and an individual's home and vehicles are usually beyond reach. Unless a judgment debtor has a going business with valuable inventory or cash flow, rental property, or cash in the bank, collecting on a judgment may be problematic. Often, the creditor's attorney receives word from the constable that he is unable to collect and is returning the writ of execution nulla bona.

 

Finality of Judgments

 

One can only obtain a judgment after filing a lawsuit and complying with the rules of civil procedure in order to either prevail at trial or obtain a judgment by default. After the judgment is signed, the court clerk will not issue a writ of execution until it is at least 30 days old (21 days in justice court) at which time the judgment is considered final. This postjudgment waiting period exists so that the debtor has ample time to file a motion for new trial as a prerequisite to appeal. If the motion is granted, or if the debtor files an appeal, then execution efforts must cease.

 

Homestead Exemptions

 

Many Texas debtors have numerous judgments against them but live in expensive homes. They can do this because the entire homestead equity is exempt from execution. What constitutes a debtor’s homestead? See Tex. Prop. Code § 41.002 (definition). Within broad parameters, a homestead is what a person intends it to be. A rental property or even a vacant lot can be homestead if the owner has reasonable expectations of building a home on it. Moreover, Property Code section 41.001(5)© states that "proceeds of a sale of a homestead are not subject to seizure for a creditor’s claim for six months after the date of sale." This expressly permits homestead protections to be rolled over from one home to the next.

 

Certain personal property is also exempt under chapter 42 of the Property Code. Personal property valued at $60,000 for a family or $30,000 for a single adult (exclusive of liens) is exempt from garnishment, attachment, execution or other seizure so long as it is on the statutory list. This includes home furnishings, clothes, jewelry, firearms, and vehicles–even 12 head of cattle. Retirement plans (including rollover proceeds) are exempted under section 42.0021 so long as contributions do not exceed the amount that is deductible under current law. College tuition funds are exempted under section 42.0022. It is important to note that homestead protections are available only to individuals, not LLCs or corporations.

 

Writ of Execution

 

Once issued, the writ of execution is sent to the constable (or sheriff, in some counties) who charges a fee for attempting to collect. The reality is that these officers may not try very hard–no flashing lights, no guns drawn. Often, the constable will knock at the debtor’s door early in the morning, present the judgment, and ask if there are any assets available to satisfy it. If the debtor says no, then the officer may withdraw and send the unsatisfied writ back to the court. Unless the creditor’s attorney can direct the officer to a specific, known, nonexempt asset for attachment or garnishment, then the collection process may come to halt.

 

Postjudgment Discovery

 

Judgment creditors, often at a disadvantage in Texas, have an important collection tool: postjudgment discovery which includes interrogatories, requests for admission, and requests for production. Tex. R. Civ. P. 621a. This discovery can be incredibly complex since rules pertaining to limits on trial discovery do not apply post-judgment.

The purpose of postjudgment discovery is (1) to ascertain whether or not the debtor possesses non-exempt property sufficient to satisfy the judgment; and (2) to determine if the debtor has fraudulently hidden assets. In addition to written discovery, it is possible to delve into these matters by taking the debtor’s deposition, although written discovery generally comes first. Note that if a debtor who has been properly served fails to answer post-judgment discovery, he or she may be held in contempt by the judge, resulting in a fine or even jail. Tex. R. Civ. P. 215.

 

If actionable information is obtained, the judgment creditor can approach the court and request a writ of attachment, Tex. R. Civ. P. 641, Tex. Bus. & Com. Code § 8.112; garnishment, Tex. R. Civ. P. 669; or a turnover order, Tex. Civ. Prac. & Rem. Code § 31.002.

 

Abstracting the Judgment

 

It is normal procedure for the creditor to request an abstract of judgment from the clerk and then file that abstract in the real property records (Note that judgment records and real property records are often located in different computers). The AJ stays on file for 10 years but may be refiled for successive 10-year periods. Filing the abstract puts the public on notice that the judgment exists and attaches to non-exempt real property of the debtor. Title companies will search for these AJs to determine if they should collect from sales proceeds to satisfy them. This represents a problem for any judgment debtor who is trying to sell property out of his own name, including homestead property. Even though a judgment lien does not attach to, and does not constitute a lien on, a judgment debtor’s homestead, it can be difficult to persuade a title company to ignore a judgment and go forward with closing. A title company’s self-serving reaction is to minimize risk and require that all liens be cleared.

Filing an AJ is often the only realistic way that a judgment creditor has to collect, at least when the debtor does not have a going business–in some cases years after the judgment was obtained.

 

The Debtor’s Homestead

 

A homestead is exempt from forced sale so long as the property remains the homestead of the debtor. Exocet Inc. v. Cordes, 815 S.W.2d 350, 352 (Tex. App.–Austin 1991, no writ). Property Code section 52.0012 provides an expedited statutory method for securing a release of any judgment lien against homestead property, available only for AJ’s filed after September 1, 2007.

 

Section 52.0012 provides for the filing of an Affidavit that must substantially comply with the appearing in this section of the Property Code. Filing of the affidavit must be preceded by a 30-day notice sent certified mail and addressed to the judgment creditor and its attorney of record. The letter must contain a copy of the affidavit that the homestead owner intends to file in the real property records. The requirements of the letter and the affidavit are highly technical and should be done by an attorney knowledgeable in this procedure. The judgment creditor may contest the homeowner’s action by filing a contradicting affidavit if there is reason to believe that the homeowner’s affidavit is false. The ultimate result, if this procedure is followed to the letter, is that the homeowner's affidavit serves as a release of the judgment lien as to the homestead property. See Part VI, ch. 35: Lien Removal.

 

Turnover Orders and Receivership

 

A post-judgment turnover order pursuant to Civ. Prac. & Rem. Code sec. 31.002 et seq. is a "procedural device by which judgment creditors may reach assets of a debtor that are otherwise difficult to attach or levy on by ordinary legal process." Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 224 (Tex.1991). The turnover order requires that the judgment debtor bring to the court any non-exempt items available for execution on the judgment, rather than relying solely on the judgment creditor’s ability to utilize conventional methods of execution and attachment through the local sheriff or constable. Sec. 31.002 states that a "judgment creditor is entitled to aid from a court of appropriate jurisdiction through injunction or other means in order to reach [non-exempt] property to obtain satisfaction on the judgment if the judgment debtor owns property, including present or future rights to property that . . . cannot readily be attached or levied on by ordinary legal process."

 

Contempt remedies (fine or incarceration) may be employed: "The court may enforce the order by contempt proceedings or by other appropriate means in the event of refusal or disobedience." Civ. Prac. & Rem. Code §31.002©.

 

Included among the tools available is the most powerful weapon in the collection arsenal–the appointment of a receiver–"with the authority to take possession of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment." Tex. Civ. Prac. & Rem. Code §31.002((3). Receivers have nearly unlimited power to take over not just the business but the entire life of a judgment debtor and wring every available cent from non-exempt assets in order to satisfy the debt – and, of course, the receiver’s often crushing fees. Receivership is highly profitable for court-favored attorneys who are appointed to serve in that capacity, but devastating to the debtor. This author has never seen a small business survive a receivership.

 

Usually, the power of a court to issue or amend orders ends 30 days after the judgment (Tex.R. Civ. P. 329((d)). Not so with receivership. A court’s power to enforce a judgment and to enable the judgment creditor to continue to pursue the judgment debtor is essentially indefinite so long as the judgment remains unpaid. See Tex.R. Civ. P. 308; Matz v. Bennion, 961 S.W.2d 445, 452 (Tex.App.–Houston [1st Dist.] 1997, pet. denied). Accordingly, a judgment creditor facing an aggressive receiver (particularly one who is motivated to collect a large amount) may find himself on the defensive forever.

 

Enforcement of Judgments from other States

 

Unfortunately for Texas debtors, this is not as difficult as it used to be. Enforcement of "foreign judgments" is governed by Civil Practice & Remedies Code chap. 35, also referred to as the "Uniform Enforcement of Foreign Judgments Act" or "UEFJA." The UEFJA provides that a foreign judgment may be authenticated as follows: (a) at the time the foreign judgment is filed, the judgment creditor or the judgment creditor’s attorney must file with the clerk of court an affidavit showing the name and last known address of the judgment debtor and the judgment creditor; ( the clerk then mails notice of the filing of the foreign judgment to the judgment debtor at the address given; and © the notice must include the name and address of the judgment creditor and, if the judgment creditor has an attorney in Texas, the attorney’s name and address. So long as this procedure is followed, and so long as the judgment is not being appealed in its original jurisdiction, the creditor will have access to post-judgment discovery and other remedies allowed under Texas rules.

 

The result is that a foreign judgment may be enforced and collected in Texas just as any other judgment, with one limitation: Civil Practice & Remedies Code section 16.066( provides that the foreign judgment may not be enforced in Texas if 10 years have passed since the judgment was rendered in its home state or after the judgment debtor has resided in Texas for 10 years.

 

[TomnTex]

What is the SOL on a DV letter if any in Texas?:

 

You can make the request under TFC at any time.

The reason you invoke the specific provisions is that it ties in to the DTPA claims...you have to place the other party on notice of the alleged violation. Hence, you tailor the letter in such a manner that it outlines what they need to do (and if they don't, it helps prove the gross violation required for trebling) and you have to give 60 days written notice/opportunity to cure before litigating the DTPA claims.      

 

It can be done under federal law as well, but the difference is the obligation placed upon the third party by the language of Texas law.    

[texasrocker]

Compulsory Mediation-

http://www.internationalmediator.com/Articles/Compulsory-Mediation-The-Texas-Experience.shtml

[acorn]

On 1/13/2014 at 8:05 PM, Just Me 78631 said:

Is the debt collector legally authorized to collect debt in the State of Texas?

Residents of the State of Texas retain special consumer protections during the debt collection process. Once such unique protection not covered under Federal credit protection laws is the requirement that all third party debt collection agencies in Texas maintain active insurance via a surety bond.

If a collection agency does NOT have an active surety bond, if they "validate" a debt to a credit reporting agency (after dispute sent to CRA), is that a violation of Texas law on the part of the CA?

@TomnTex  @texasrocker

[BV80]

@acorn

Probably not because the FCRA requires a debt collector to respond to the CRAs in order for an entry to remain on a CR.   Verifying an entry on a CR has nothing to do with maintaining a business in TX.

[acorn]

Just now, BV80 said:

@acorn

Probably not because the FCRA requires a debt collector to respond to the CRAs in order for an entry to remain on a CR.   Verifying an entry on a CR has nothing to do with maintaining a business in TX.

Does verifying an entry on a CR constitute collection practice according to Texas law?  Even CAs in other states are required by Texas law to maintain a surety bond in order to legally collect in Texas.

[BV80]

@acorn

I've been unable to locate any such ruling by a TX court or the 5th Circuit Court of Appeals.

But I think this is apples and oranges.   The surety bond is a requirement to do business WITHIN the state of TX.   A collection letter would be sent to you IN TX.  That has nothing to do with reporting and verifying an entry on a CR.   To make such a claim, it would require every collection agency in the country who is not sending collection letters to TX consumers but is reporting on CRs to post a surety bond just for the opportunity to report to the CRAs. 

[qednick]

@acorn the law is definitely written weird. It starts off saying that third party debt collectors and credit reporting bureaus require the surety bond to do biz in TX, yada yada, but then later only really refers to the third party debt collector.  In a sense I'm now glad that I chose to attack the CA first before even bothering with the CRA's--otherwise I'd be asking the same questions. I hope you manage to get it figured out.

[acorn]

3 hours ago, BV80 said:

 To make such a claim, it would require every collection agency in the country who is not sending collection letters to TX consumers but is reporting on CRs to post a surety bond just for the opportunity to report to the CRAs. 

I believe that's the intent of the Texas law.

[acorn]

2 hours ago, qednick said:

@acorn the law is definitely written weird. It starts off saying that third party debt collectors and credit reporting bureaus require the surety bond to do biz in TX, yada yada, but then later only really refers to the third party debt collector.  In a sense I'm now glad that I chose to attack the CA first before even bothering with the CRA's--otherwise I'd be asking the same questions. I hope you manage to get it figured out.

The reason I'm asking is that for every trade line we're disputing to the CRA (2 for me, 3 for hubby), NONE of the collection agencies who are reporting those TLs have the surety bond required by the state of Texas.  (They're all beyond the SoL, as well, and we don't recognize any of them, either, which is why we're disputing.)  I was just wondering whether that surety bond thing might be an additional set of teeth to force them to get those TLs off our reports.

[BV80]

@acorn

17 minutes ago, acorn said:

I believe that's the intent of the Texas law.

Then you need to call an attorney.   Personally, I don't see how reporting to CRAs could be considered a debt collection action WITHIN the state of TX.