Judgments in Texas
SUMMARY JUDGMENT PROOF ISSUES
Because of the difficulties credit card plaintiffs seem to have in obtaining proper proof of the elements of their cases, the evidence submitted in connection with their motions for summary judgment can often be challenged.
Two recent cases are particularly
instructive for these types of challenges.
The Fort Worth Court of Appeals in Luke v. Unifund CCR Partners, 2007 WL 2460327
(Tex.App—Fort Worth 2007) (not designated for publication) provided a laundry list of defects in
summary judgment affidavits that can preclude summary judgment.
A summary judgment affidavit
must:
Be made from personal knowledge,
Show affirmatively that the affiant is competent to give the testimony contained in the affidavit,
Provide the underlying facts to support its conclusions,
Attach sworn or certified copies of any papers referred to in the affidavit,
In the case of a business records affidavit, accurately use the predicate language in Texas Rules of Evidence 803(6) and 902(10),
Show that the affiant had a proper basis for asserting the accuracy of records obtained from a predecessor in interest, and Not contain inconsistencies such as attached contracts dated at least 3 years prior to the date the
credit card account that is the subject of the affidavit was opened. Id., 2007 WL 2460327 at 5-
7.
When a summary judgment affiant seeks to lay a predicate for the admission of the business records of a
third party, the affiant must have personal knowledge of the manner in which the records were prepared and
be able to testify about the third party’s record keeping.
Martinez v. Midland Credit Management, 250 S.W.3d
481, 485 (Tex. App.—El Paso 2008, no pet.). The affiant must include in the affidavit information that
would indicate that he or she is qualified to testify as to the record-keeping practices of the predecessor and that the records are trustworthy. Id.
(The information listed below was drafted by the attorneys at Weston & Associates, PLLC and is for informational purposes only and is not to be considered legal advice. The information relates to lawsuits filed in Texas for collection purposes).
A judgment is a judicial determination of who wins and loses. With a credit card lawsuit, a judgment against you in favor of a creditor means that the creditor now has many more ways to collect from you rather than by just calling you non-stop. The interest rate on a judgment against you could accrue at a rate of 18% annually on the amount in the judgment, which usually includes significant costs and attorney fees of the creditor. A judgment can last for 10 years, but can be renewed.
WHAT CAN HAPPEN TO ME?
• Garnishment of your Bank Accounts
With a judgment, the "Judgment creditor" can garnish your bank accounts in Texas to satisfy the judgment. This means that they can get a court to give them permission to empty every cent in your bank account up to the amount of the judgment.
*The judgment creditor is prohibited from garnishing social security benefits. (If a creditor has seized social security benefits from your bank account, you may have a cause of action against the judgment creditor or even the bank).
• Forced Sale of Non-exempt property
The creditor can ask the court to appoint a "Receiver" to sell any of your non-exempt property (other than your homestead ). For instance, if you own rental property or business property, this property could be sold at most likely below the fair market value to satisfy a judgment.
*For example, you have a judgment against you for $5,000 and you also own rental property with a taxable value of $200,000.00. You believe it is worth $300,000.00 Assume this property is sold by a receiver for $130,000.00 to the highest bidder via public ( or even private ) sale. You may only get back $100,000.00 and you lose $200,000.00 after all of the fee's and costs are deducted. (This is why you MUST not ignore a lawsuit or judgment).
Can I go to Jail?
In Texas, you cannot be jailed for failure to pay a debt, however, you can be put in jail for "Contempt of court". If, after a judgment, you are served with "Post judgment discovery" by the judgment creditor and you ignore it, you can be held in contempt of court and actually put in jail.
Post judgment discovery usually consists of written questions in which you may be asked to turn over private bank statements and other financial documents so that the creditor can essentially garnish your account or find other property. The creditor may even request to take your deposition. Needless to say, many people are hesitant to direct their creditors where any money or non-exempt property they have is.
If you ignore the post judgment discovery process, the judge will likely issue an order for you to show up in court and explain why you have ignored the process. If you do not show up, the judge will likely issue a warrant for your arrest.
WHAT IS SAFE FROM COLLECTION?
• Homestead
In Texas your Homestead (So long as it qualifies as a homestead) cannot be sold to pay of a credit card debt and most other debts (Main exceptions – mortgage debt, IRS debts).
However, a lien could still be placed on your homestead by a judgment creditor and cause you problems when attempting to sell the house. A title company may ask that you pay the debt or they won't issue title insurance or they may require you to get a court order proving that this property is in fact your homestead. (Although your homestead is protected, creditors still find ways to cause headaches) .
*If you do not "re-invest" the proceeds of the sale of your homestead in a new homestead within six months, the proceeds become non-exempt and a judgment creditor can seize the money to satisfy the amount in the judgment.
• Garnishment of your wages
Under the Texas Constitution, a judgment creditor generally CANNOT garnish your wages, other than for child support (and of course, the IRS can). However, this does not include proceeds from rental properties for example. (FYI - if you have a rental property, this is non-exempt property and can be sold to satisfy the judgment, often for far less than it's fair market value).
*Creditors may use alternative methods to attempt to garnish your account. For instance, if your employer is not based in Texas, or if you are paid from an out of state location, the creditor may transfer the judgment to where your company is based and garnish your wages this way.
• Exempt Personal Property
Family Limit : property having an aggregate fair market value of not more than $ 60,000 .
Single Adult Limit : property having an aggregate fair market value of not more than $ 30,000 .
Property classified as exempt:
• Home furnishings, including family heirlooms;
• Farming or ranching vehicles and implements;
• Tools, equipment, books, and apparatus, including boats and motor vehicles used in a trade or profession;
• Wearing apparel;
• Jewelry; ( up to a limit)
• Two firearms;
• Athletic and sporting equipment, including bicycles;
• A vehicle ( including motorcycles ) for each licensed driver of the family;
• Household pets;
• The present value of any life insurance policy to the extent that a member of the family of the insured or a dependent of a single insured adult claiming the exemption is a beneficiary of the policy;
Basically you want to avoid a judgment if at all possible. Bankruptcy does discharge most judgments including the amount owed, but not judgments for child support, intentional conduct, or fraud for example. Not all people qualify for Bankruptcy. If you do not qualify for Bankruptcy or it is not your best option we will explore all options with you to determine the best course of action, including possibly counterclaiming the creditor for a violation of the Federal Fair Debt Collection Practices Act or the Texas Debt Collection Act.
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