The Abstract and The Credit Score – Collecting Judgments in Texas
Raise your hand if – as a lawyer – you’ve had difficulty collecting a judgment once it’s been rightfully handed down by the courts. I am willing to bet that if I asked this question to a room full of my contemporaries, I would I’d see a lot of hands.
This may be hard to believe, but getting your day in court, against someone who owes you money, may not necessarily be your happy ending. Actually, it can often be the beginning of a long and seemingly endless road ahead.
Yes, gaining a judgment from a court is an important step, but you may still be closer to the beginning than the end.
Collecting your debt, even after the court has issued a judgment, still may take perseverance and an efficient, tried & true system. You have leverage but now you’ve got to put it to work.
So, how does that work begin?
First, let’s tell the world about your judgment. We do that by filing an abstract. An abstract is a document filed in the property records of a county. A properly recorded and indexed abstract creates a lien on the debtor’s non-exempt property in that county.
IMPORTANT: File an abstract in every county where the debtor has property, or the potential to obtain property in the future.
EXAMPLE: File an abstract in the country where a debtor might inherit property, because his or her parents live there.
Why? The filing of an abstract often gets the attention of debtors (and we do want them to stop ignoring us) because it might prevent them from obtaining credit. That’s because lenders interpret the abstract negatively; understanding that it may represent a burden, making future credit obligations difficult to repay.
At a minimum, abstracts can immediately drive down your debtor’s credit score, providing more leverage in your pursuit for payment.
Filing an abstract is step one. Next up, the writ of garnishment.
Collecting Judgments in Texas is a multipart series offered by attorney Darrell W. Cook. Mr. Cook is one of the foremost experts in Texas on maximizing wealth through the efficient collection of outstanding debts. He’s particularly expert in the art and science of collecting money owed following the issuance of a legally enforceable court judgment.