Understanding the Texas Judgment Lien

Collecting a judgment in Texas can be challenging. But, it is doable. Your success, however, will require an aggressive use of all available judgment collection tools. The first and easiest tool is also the most overlooked. It is the judgment lien.

The Basics of a Lien

A lien is a pretty simple concept. Most people understand it in the context of borrowing money and using collateral to secure the payment of a note. In other words, a lien is a claim against an asset for payment of a debt. That idea isn’t any different in the context of a judgment. A judgment is debt. That judgment debt can create a lien on the judgment debtor’s assets. But, a Texas judgment doesn’t automatically create a lien. The judgment creditor must do something to create a lien.

A Judgment Lien Requires an Abstract of Judgment

Creating a lien based on a Texas judgment is simple to do. You just record an “abstract of judgment” to create a lien. An abstract of judgment is nothing more than a summary of the judgment. It itemizes the amount of money the judgment debtor owes you. It also lists the amount due for court costs, attorney’s fees and interest. You record the abstract in the deed records of the county clerk’s office. You need to file it in each county where your judgment debtor owns real estate. The act of recording the abstract creates a judgment lien on the debtor’s real estate in that county.

An example will help in understanding the process.

Let’s suppose you have a judgment against a defendant who owns real estate in Dallas and Houston. You record an abstract of your judgment in Harris County but not in Dallas County. You now have attached a judgment lien to the debtor’s real estate in Harris County. But, the land he owns in Dallas County is not subject to your judgment lien. To attach the lien to his property in Dallas County, you have to file your abstract in Dallas County.

Here’s a video that explains the abstract of judgment.

 

Renewing a Texas Judgment Lien

Recording the abstract of judgment in the real property records of any Texas county creates a judgment lien on the debtor’s nonexempt real estate in that county.  The lien is good for ten years, unless the judgment becomes dormant in less than ten years from the creation of the lien.  If the judgment does become dormant before the 10-year period runs, the judgment lien created by filing the abstract ceases to exist.

What you have to understand is that your judgment has a life-span of ten years too.  But, the life-span of the judgment operates separately from the life-span of the lien you create with the abstract of judgment.  The judgment is valid for ten years from the date the judge signs it.  The lien is valid for ten years from the date you record the abstract.  Those dates can be the same but in most cases they are not.

Your judgment becomes dormant if you do not issue a writ of execution within ten years from the date it was signed by a judge. Your judgment will lose its priority position in the deed records if you allow it to become dormant. It is crucial that you calendar the recording of your abstract so that you can keep your judgment lien alive. You can keep it alive by:

  1. Recording a new abstract before the 10-year anniversary date of the previous abstract; and
  2. Issuing a writ of execution on the judgment before it becomes dormant.

The Power of a Texas Judgment Lien

A case involving Pennzoil Company and Texaco demonstrates the potential power of the Texas judgment lien, Texaco, Inc. v. Pennzoil Co., 626 F.Supp. 250 (S.D.N.Y. 1986), rev’d 107 S.Ct. 1519 (1987).  The case made national news in the mid-1980s.

Pennzoil won an exceptionally large judgment against Texaco and then abstracted and recorded it in every county in Texas. By doing so, Pennzoil perfected its judgment lien against every piece of real property Texaco owned in Texas.

Texaco quickly realized the impact of the judgment lien on its business operations and filed in federal court challenging the constitutionality of Texas judgment lien laws. The case was ultimately heard by the United States Supreme Court. The Supreme Court ruled that the federal courts should not interfere with the judicial system in Texas. As a result, the only way Texaco could prevent Pennzoil from taking further action to perfect its lien was to file for bankruptcy protection.

Practical Tips for Properly Using a Texas Judgment Lien

An abstract of judgment is an inexpensive way to make sure you eventually collect of your judgment. It is a passive collection tool.  But, it is an effective collection tool.  After you prepare an abstract of your judgment, you want to record it in the following counties:

  1. The county where the judgment debtor lives.
  2. The county where the judgment debtor works.
  3. The county where the judgment debtor’s family lives (inheritance possibilities).
  4. The county where the judgment debtor owned property in the past (he may try to invest again).

Final Remarks

The key to using an abstract of judgment is to monitor your time-frames carefully.  You want to keep the judgment from going dormant and you want to keep your priority position with the lien.  To make sure that happens, you should request a writ of execution and a new abstract no later than nine years after the date of the judgment.  Starting early ensures that you complete all the required procedures well in advance of the  10-year anniversary of the judgment and the lien.

10 Responses to Understanding the Texas Judgment Lien

  1. Great article. But I can’t seem to find out if I use a lien, can I still try to use other methods to collect or does it preclude me?

    • Using the judgment lien does NOT preclude you from using other methods to collect your judgment. In fact, you can use all methods available to you simultaneously if you wish. I tend to work in a specific order in a desire to keep costs from spinning out of control. I always start with the abstract because it’s inexpensive and secures the lien on nonexempt property and insures that the debtor doesn’t try to sell nonexempt real estate without paying me.

  2. Mr Cox, I have had a great deal of success in following your online advice as a judgment creditor. I now own a debtors real property by virtue of his tenants damaging mine and ignoring the circumstances. I put forward the writ of execution and eventually bought the property on the courthouse steps for the sum $860 ( valued at $39,000 )
    Thanks for the help. Yes I did purchase your book ( How to collect your Texas Judgment ) Great work, thanks.
    Paul

  3. When an abstract judgment is dormant, like 30 yrs later… from GMAC does the wording make a difference? Such as the wording on the judgment state 10.9% interest per annum on all from date of judgment UNTIL PAID…

    The man has just died. He has no will, no life ins, and my sister has been living with him at that homestead for 21 yrs and not common law.

    Can she get get a clear title through Affidavit of Heirship in order to sell as the son is willing to give her this house. The value is that of what this judgment would be valued at todays amount… 35,000.

    • A judgment dormant is not collectible. If it’s been allowed to go dormant that long, there is no judgment and there is no lien. So, the judgment won’t factor into any probate. Additionally, from the content of your question, the concern is the lien attaching to the homestead. The judgment lien for an auto loan through GMAC would never have attached to the home to begin with.

      Now, with regards to the next part of the question regarding an affidavit of heirship and any rights your sister may have to the homestead, you will need to consult with an attorney to sort that one out. There’s not enough information in what you’ve provided to clearly answer all the issues that are raised. Email and website comments are an insufficient format to have the appropriate dialogue for sorting out all the issues and asking all the questions that need to be asked about the legal nature of their relationship to sufficiently answer the question.

      I recommend you contact an attorney in your area for a further consultation and investigation of the facts to determine what rights, if any, your sister has. If you need a referral, please contact me via the information on my contact page and I’ll be happy to help you find an attorney to help you.

    • It doesn’t change anything for the collection of the judgment. The style of the case remains the same as the original case. In the body of any motions you may file you can reference your judgment debtor with her original name followed by aka (abbreviation for also known as) and the new name. It will look like, “Jane Doe, Defendant, aka Jane Roe.”

      That’s really all you need to do. Everything else proceeds as normal.

  4. I found your website and it has a lot of great information. I just got awarded a default judgment against Renchong Hu and Echempower Inc. Even though we sued the company (echempower) can we do the lien against the owners (Renchong Hu) homesteaded property?

    • If your judgment is only against the corporation, you can only collect from the corporation. The individual owners, officers, or directors are not liable for the judgment unless the judgment specifically names them individually. If your judgment does include the individual, you can attempt to collect against the individual. But, the homestead is off limits. I just posted another article earlier today on the issue entitled The Dangers of Ignoring Texas’ Homestead Exemption.

      In my opinion, however, you’re probably in a better position having a judgment against the company. Corporations have no exempt assets. As long as the company is viable, i.e., it is in business, making money, and has assets, you will likely stand a better chance of collecting the judgment with a lot less hassle and expense than going after the assets of an individual. If you used an attorney to get your judgment, my suggestion is to have the attorney do a quick asset search followed up with a writ of execution to seize those assets. In most corporation situations I’ve handled, that gets a cashier’s check in your hand very quickly because the corporation cannot afford the downtime of having assets seized.

Leave a reply

Free Books

Coming Soon!

Harvey L. CoxMy name is Harvey L. Cox.  I've been practicing law in Texas since 1990. I have worked extensively in the areas of commercial and consumer collections, consumer protection, IRS problem solving, asset protection planning, estate planning, and child advocacy. I now devote my time writing and teaching with a desire to help consumers and small businesses find answers to their everyday legal and business questions.

No Attorney/Client Relationship Notice

Nothing contained on this website shall be construed as creating an attorney/client relationship between you and Harvey L. Cox, Attorney at Law. Additionally, no posting or email by Harvey L. Cox, Attorney at Law, is to be considered confidential communications unless otherwise noted.

Join My Newsletter List & Receive the Following

  • Notice of New Articles as they are Published
  • Notice of New Books Prior to Publication
  • Discount Offers on Current and New Books
  • Tips & Tricks to Help You Navigate Everyday Legal Issues That Affect You & Your Family
x