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Judgement and Settlement


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I'm new to the world CreditRepair...etc...  First post.


Basically I have two Judgements from bad CC that I did owe but couldnt pay totalling up to about 11k.  I went to the hearings but lost. :(


1.) Portfolio Recovery. $5178 Dec 2012 5% interest

2.) Midland Funding    $7311 March 2012 5% interest


Should I settle, or what options are there? Has anyone had any experience in settling with these companies?  Should I go for 25%.  What are the correct steps?  I.E. any letters to have this done the "correct" way.....

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In theory you CAN settle the accounts.  Nothing prohibits you from offering.  That does not mean that the creditors with judgments WILL settle.  Can and will are two different things. 


If they know you have money they can get far more out of you by garnishing wages or levying your bank accounts.  Why would they settle for pennies on the dollar now that they have a judgment and collect far more?

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They can clean out your bank account, so don't do a direct deposit, if you own property, make sure you have it covered under the home stead act. They can't take a certain amount of stuff that you have or a car as I recall. A lot more than I have time to go into here. Just do your research. Switch banks if they know the one you use not. Be prepared for an audit at some point.


In texas most property and wages are exempt. and a homestead and car, are exempt, I know they can't garnish wages only for child or spousal support in texas. A default in TX is good for ten years and can be renewed. You might also consider bankruptcy to wipe it out as TX is a community property stae your spouses income and propert are also at risk.


Again, I will restate the following:  "Texas does NOT allow wage garnishment for consumer debt so your salary is safe; they CAN place a lien on your home; Texas DOES allow levy of bank accounts, seizure and sale of non exempt property and liens against real property although a sale of a PRIMARY residence cannot be forced and the lien just basically sits there until satisfied or the proeprty is sold.

Texas is a community property state - some joint marital property can be seized, levied or liened when only one spouse is the debtor."





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( B)(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( B)(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; ( B) 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( B) 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.


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  • 5 months later...

Hello Eveyone,


I would like to share a judgement that was against me and I thought I did eveything that I can to do. I have even went and seeked legal advise and went crazy looking for legal advise.


This was from a Hospital Collections and I reapetly asked the Collector to show proof that this was actually me and he failed to do so. The thing was that at the Colector stand point he didnt care to show proof becasue they had already leyvi my bank account and they took about close to $4,000. Boy was I very upset. I looked at the paper from when I was served and it said that they hand delivered the papers and then that they also gave it to my wife which we both received and were written as husband and wife. I tried to argue that they were wrong and that they never served us, and the person that they said that it was my wife is my sister and she didnt live at that home address.

Too make the long story short, they ruled in favor of the credit becasue I have a year to respond to the summons once they served me but in reality it was 10 years later which in court said that the law is the law and it was too late for me to dispute this. It was a 16 year old collection and I just lost it last year or 2 years ago. This collection company made out with my money becasue I had little experience in this and I wasnt able to hire a lawyer.

Is it still possible to take back to court?


What is that can be done becasue a lot of people go through the same exact thing and they are not allowed to get and or keep thier money. This may help someone in the same situation and keep from them lossing their money.

Good Luck All!!


ORANGE COUNTY PROF. SERV. INC.                  )           Case # 07C01101/97C00261

dba CA PROFESSIONAL SERVICES OF                 )

ORANGE COUNTY,                                                              )


Plaintiff,                                                         )              MOTION TO SET ASIDE DEFAULT AND


Vs...                                                                                  )              SERVICE OF SUMMONS


JOSE VIDRIO, et al.,                                                  )

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