Can I Seize Someone’s Personal Property and Assets in a Texas Personal Injury Claim?

One of the most common questions that comes up for someone making a personal injury claim in Texas is whether the assets of the party causing the injury can be seized to provide compensation for that claim. Usually, this issue comes up when the party responsible for causing the injury does not have insurance, or does not have enough total insurance coverage to pay full compensation for all of the damages they caused.

Unfortunately, in the overwhelming majority of situations, someone making a personal injury claim in Texas will not be able to seize personal assets to get compensation. Even in situations where they can, there are logistical difficulties in doing so – and an ever-present risk that the negligent party may declare bankruptcy to avoid paying.

Assets Can Only Be Seized After Getting a Final Civil Court Judgment

One of the fundamental cornerstones of our society is the right to own property and the various other rights that go with it. Our law recognizes and protects everyone’s rights to own, control, sell, gift, and otherwise manage various property. If someone takes property belonging to someone else without a legal right, they are violating the law and may face criminal and civil penalties.

In relation to personal injury claims, the only way a claimant can legally have the right to seize property for the personal injury claim is if they start a civil court proceeding and get a final judgment from that court proceeding awarding them money from the other party or parties.

In this context, a final judgment from a civil court would be a final, binding court decree saying that the plaintiff (the person making the claim) is awarded a specific amount of money from the defendant (the person against whom the claim is being made), and the plaintiff has the right to use certain legal tools and methods to collect the money from the defendant; typically, this includes actual damages, court costs, and interest.

Most Personal Property in Texas Cannot be Seized to Satisfy a Civil Court Judgment for a Personal Injury Case

A person who is owed money under a civil judgment is called a “judgment creditor” and the person who owes the money under a civil judgment is called a “judgment debtor.” Compared to most other states, Texas law is extremely favorable to judgment debtors in terms of the property that is legally protected from seizure.  Below is a list of common personal property that cannot be seized, under Texas Property Code, Chapter 42, to satisfy a civil judgment in Texas.

• Current Wages – Texas law provides that “current wages” cannot be seized to satisfy a civil judgment except to pay child support. A personal injury judgment creditor cannot seize wages directly from an employer to satisfy a judgment.
• Social Security Benefits – Social Security benefits cannot be seized to satisfy a civil judgment in Texas.
• Veterans Administration “VA” Benefits – Veterans benefits cannot be seized to satisfy a civil judgment in Texas.
• Workers’ Compensation Benefits ­– Texas law does not allow workers’ compensation benefits to be seized to satisfy a civil judgment.
• Temporary Assistance for Needy Families “TANF” Benefits – Texas law does not allow TANF benefits to be seized to satisfy a civil judgment.
• Unemployment Benefits – Texas law does not allow unemployment benefits to be seized to satisfy a civil judgment.
• Child Support, Alimony, and Spousal Support – These types of benefits cannot be seized to satisfy a civil judgment in Texas.
• Life Insurance and Annuity Benefits – These types of benefits cannot be seized to satisfy a civil judgment in Texas.
• Pension and Retirement Benefits – These types of benefits cannot be seized to satisfy a civil judgment in Texas.

Family Vehicles Are Protected from Seizure to Satisfy a Civil Judgment in Texas

Texas law exempts family vehicles from seizure by a judgment creditor to satisfy a civil judgment. Specifically, the Texas Property Code provides that for each member of the family with a driver’s license, one vehicle shall be exempt from seizure to satisfy a judgment.

Miscellaneous Personal Property Up to a Total of $50,000 in Value for an Individual or $100,000 for a Family Is Protected from Seizure to Satisfy a Civil Judgment in Texas

Texas law further exempts the following personal property from being seized by a civil judgment creditor, with the protection applying up to a total combined value of fifty thousand dollars per person or one hundred thousand dollars per family:

• Home furnishings including family heirlooms;
• Food and similar items for consumption;
• Farming or ranching vehicles and implements;
• Tools and equipment used for a job;
• Clothes;
• Jewelry (up to a total value of $12,500 for a single person or $25,000 for a family);
• Two firearms;
• Athletic and sporting equipment;
• Two horses, mules, or donkeys with food and riding equipment;
• 12 head of cattle with food;
• 60 head of other livestock with food;
• 120 fowl with food; and
• Household pets.

A Homestead Residence Cannot be Seized to Satisfy a Civil Court Judgment for a Personal Injury Case in Texas

For most Americans who own their home, it is the most valuable single asset they own. This would make it an attractive target for seizure to satisfy a court judgment, but under Texas Property Code, Chapter 41, a person’s residential homestead is generally protected from being seized (except relating to non-payment of obligations directly related to the property like a loan or a tax bill). The protection applies to a single homestead which can be as large as up to 10 acres of urban property or up to 100 acres of rural property for an individual, or 200 acres of rural property for a family.

A Civil Court Judgment or Pending Claim for Personal Injury Damages Can Be Wiped Out in Bankruptcy with Little or No Payment of the Debt Owed

Determining what non-exempt property can legally be seized for a civil court judgment is only a part of the puzzle. It is also important to understand how the possibility of a bankruptcy declaration factors into the situation, and what can possibly happen if a judgment debtor, or someone facing an upcoming court date as a defendant in a personal injury trial, declares bankruptcy.

An individual officially starts the bankruptcy process by filing a petition with the bankruptcy court. Usually, creditors are notified at the time of filing or shortly after. As soon as a petition for bankruptcy is filed, all creditors are required to immediately stop all efforts to collect any debt.

The filing of the starts a process where all the debts and assets of the bankruptcy petitioner are accounted for and classified. Bankruptcy law exempts certain property from being seized to pay off debts, and there is a significant overlap between the types of property exempted from being seized in bankruptcy and the types of property that cannot be seized to pay a civil judgment in Texas. Generally speaking, during this sorting process the debt obligations are divided into “secured debt” and “unsecured debt.”

• Secured debt is any debt or obligation which is made with collateral. Examples of this include a mortgage for a house or a car loan, which have explicit provisions in the loan agreement that the collateral can be seized and sold to pay the remainder of the loan if there is a default.
• Unsecured debt generally refers to all debt obligations which are not tied to collateral. This includes things like credit card bills, phone bills, or any other obligations without collateral. Civil court judgments for personal injury damages are classified as unsecured debt.

After the debts and assets are sorted and classified in the bankruptcy process, the bankrupt’s non-exempt assets are distributed to pay for the entire outstanding debts (if possible), or a proportional percentage of them if there are not enough assets to pay for the full debt amount (which is almost always the case). The debts are paid off in order of priority, with secured debts always being paid first and the unsecured debts always being paid off last.

Because a civil judgment for personal injury is an unsecured debt, it will always be on the last rung of the ladder to be paid in bankruptcy proceedings. In many instances, the holders of unsecured debt in an individual bankruptcy will only be paid a small percentage of the amount owed, while in some instances the unsecured creditors will not receive any money. At the end of the bankruptcy process, the petitioner’s debts are “discharged” – meaning they are wiped away, even if they were not paid in full or, indeed, at all.

Thus, if a person has a large civil court judgment for personal injury issued against them, they can always declare bankruptcy to discharge the obligation. Often in these scenarios, the judgment will end up unpaid ,or only a small amount of the money owed will be paid.

A person can also declare bankruptcy to stop a personal injury civil case pending against them before a final judgment has been issued. In this scenario, the court case would immediately have to be paused once the bankruptcy petition is filed because a civil court proceeding is classified as a collection action. The pending personal injury case would still be classified as an unsecured debt in the bankruptcy proceeding, except in this situation it would be classified as an “unliquidated debt,” meaning the final debt amount is not known because there was no final court judgment. As an unsecured debt, the personal injury claim would still be on the last tier of debt to be paid in a bankruptcy proceeding, and the debt would still likely be discharged with no payment or only a small payment.

Finding and Collecting Assets to Satisfy a Civil Judgment for Personal Injury in Texas Is Difficult

As discussed above, Texas law exempts most personal property and the residential homestead from being seized to satisfy a civil judgment. As a practical matter, the vast majority of individuals will not own enough non-exempt property to be seized to satisfy a judgment. Lawyers sometimes refer to someone in this situation as being “judgment-proof,” meaning they lack personal assets that can be seized to satisfy a potential judgment.

However, even in situations where the defendant is wealthy and has assets that can be seized to satisfy a judgment, there is still the issue of locating and seizing the assets. Often, individuals who have judgments against them will be extremely uncooperative, and will deliberately hide or relocate assets to try to avoid collection efforts. Tracking down then actually taking possession of assets to satisfy a judgment can be extremely difficult, frustrating, and time-consuming.

How Can Information About Available Assets Help Me in My Personal Injury Claim?

Like many aspects of Texas personal injury law, the details of what assets can and cannot be seized are complicated. However, this information is important as it can help individuals making a personal injury claim to better understand the potential outcomes of the claims process, and to use this information to make more informed and better decisions.

At The Kishinevsky Law Firm, we represent personal injury clients in a wide array of cases, including car accidents, truck and commercial vehicle accidents, daycare accidents, and more. Our in-depth knowledge of Texas law, coupled with our experience handling complex injury claims, means we are prepared to handle any challenges that come our way when insurance companies and/or liable parties attempt to avoid paying the compensation you deserve and are entitled to receive under the law. We create strategies that are tailored to your case and your exact needs, and we will not give up without a fight. We work hard to find solutions for our clients so that if one route is closed to them, there are others we can take to ensure the best possible outcome for their cases.

If you or your loved one has been injured due to the fault of another person, party, or entity, don’t wait – call The Kishinevsky Law Firm in Houston today, or fill out our contact form. The sooner you contact us, the faster we can get to work on your case. The consultation is free. Let us help you.