After a monetary judgment is executed by a Texas Court, it’s up to a successful Plaintiff, who now becomes the judgment creditor, to enforce it against the unsuccessful Defendant, now the judgment debtor. The case may be over, but certain techniques used by lawyers, specifically discovery, are still available to help collect on a judgment in Texas.
What Is Post-judgment Discovery in Texas?
In Texas, post-judgment discovery is like discovery during an active litigation. You or your attorney have at your fingertips the full scope of discovery available to you under the same docket number and caption used during the litigation.
Post-judgment discovery may include common tools known in civil or criminal cases such as depositions, interrogatories, requests for admissions, and demands for the production of documents. These can be used on the debtor or on third parties with knowledge of the debtor’s assets, like accountants, bookkeepers, banks, title companies, insurance companies, law firms, partnerships, brokerage firms, and trustees. The purpose of these tools has a razor-sharp focus – to discover what assets the debtor has that can be used to pay the judgment against him or her.
How Does Post-judgment Discovery Work?
Post-judgment discovery works the same way as regular discovery and is governed similarly by court rules that dictate what information or documents the parties may exchange, timeframes for exchanging it, and penalties for defying discovery requests, which could even include the debtor going to jail.
One discovery tool is post-judgment depositions. Once the Court signs the judgment, the creditor can notify the judgment debtor of its intention to take the debtor’s post-judgment deposition. If the judgment debtor is a corporation, the person deposed is usually the president or a financial officer.
The purpose of the deposition is to find out what assets are available to satisfy the Judgment, through questions about current employment, future employment prospects, questions about future or contingent interests in property, and questions about plans for a business.
In a post-judgment context, the deposition is taken pursuant to the same rules and procedures as in ordinary litigation. A deposition notice is served, the deposition is scheduled at a pre-agreed location, and a court reporter records the deposition. One major distinction is that there is no time limit set on a post-judgment deposition. See TEX. R. CIV. P. 621(a).
Creditors can also depose third parties, for example a non-debtor spouse, who have knowledge about or are in possession or control of the debtor’s property.
Post Judgement Interrogatories
A creditor can also send post-judgment interrogatories to a judgment debtor. In the post-judgment context, debtor interrogatories are written questions designed to discover certain financial information about the debtor, such as bank account and other financial information. See TEX. R. CIV. P. 621a. The debtor must answer truthfully to the best of his or her knowledge and sign the completed answers to the interrogatories.
While during pre-trial discovery a party may only send twenty-five (25) interrogatories, in the post-judgment context there is no limit to the number of interrogatories that may be sent. A judgment debtor has thirty (30) days to return written answers to the interrogatories.
Post-judgment interrogatories should, at a minimum, request the name and address of the debtor’s spouse and employer; the debtor’s income and expenses; the spouse’s income and expenses; a description and location of debtor and spouse’s real estate and personal property; the name and address of all other existing creditors and amounts owed to each.
Failure to respond to post-judgment interrogatories can lead to a motion to compel and a charge of contempt of court.
Post-judgment Requests for Admissions
A creditor can send post-judgment requests for admissions to a judgment debtor. Requests for admissions are written statements generally requiring an answer, under oath, of “yes” or “no.” The creditor might ask, for example, “do you own a vacation home near the Galveston Bay?”
In situations where the creditor already knows or has reason to believe that certain assets exist (think for instance of how many people post pictures of their property on Facebook and other social media), admissions offer a chance for the creditor to confirm the debtor’s assets.
Answers to requests for admissions must be provided to creditors within thirty (30) days of the request. Failure to respond to post-judgment requests for admissions can lead to a motion to compel and a charge of contempt of court.
Post-judgment Request for Production of Documents
In addition, a creditor can send post-judgment requests for production of documents. These requests require the debtor to produce various categories of documents that will reflect what assets the debtor owns. See TEX. R. CIV. P. 196.1.
A request must, “specify the items to be produced or inspected, either by individual item or by category, and describe with reasonable particularity each item and category.” Upon ten (10) days’ notice to the judgment debtor, the creditor can serve a subpoena and written request compelling production of documents from third-parties.
Responsive documents must be provided by the debtor within thirty (30) days of the request. Failure to respond to post-judgment document demands can lead to a motion to compel and a charge of contempt of court.
Motions to Compel and Motions for Contempt
If a debtor refuses to appear at his or her post-judgment deposition, to answer the requested interrogatories, or to produce the requested documents, the creditor can file a motion with the Court seeking to compel the debtor’s compliance with the discovery request. See TEX. R. CIV. P. 215.
Following a hearing, the creditor will receive a Court order that “orders” the judgment debtor to comply with the discovery request. If the judgment debtor continues to refuse to comply, the judgment creditor can file a motion seeking to have the judgment debtor held in “contempt of court” for failing to obey the court’s previous order. This can result in hefty fines and jail time. See O’Connor v. Sam Houston Medical Hospital, 802 S.W.2d 247, 248 (Tex. App.–Houston [1st Dist.] 1990), rev’d on other grounds, 807 S.W.2d 574 (Tex. 1991) (assessing fines of up to $1,000 per day on a debtor for failing to provide responsive discovery).
Petitioning for a Turnover Order
When petitioning for a “turnover order,” your lawyer will seek debt collection to be overseen by the court, whereby a court-appointed receiver uses his or her authority to find and turnover assets directly to the you that are otherwise unattainable through normal collection means. In this case, all discovery tools would be at the disposal of the court and its receiver.
Contact Seth Kretzer for Help with Post-Judgment Discovery in Texas
If you or your client has won a judgment, you will need a lawyer with specific experience enforcing post-judgment collections using effective post-judgment discovery techniques. Call the Law Offices of Seth Kretzer at 713-775-3050 or contact us online today to discuss your case.