I have always been aware that Texas is a ‘debtor state’ in the sense that if you live in Texas as an individual or personal guarantor of a debt, you are completely sheilded from the responsibility of paying back that debt. Your bank account cannot be tapped, neither can your wages be garnished. In basically every other state, (except PA and NJ) it is pretty easy to execute on a judgment.
California, surprisingly, is the easiest state to tap a bank account, garnish wages or execute a judgment.
It seems unfair that in all other 49 states, there is the ultimate responsibility to pay your bill, but in Texas = there aint no worries = ‘fuck you’ to the creditor is the common sentiment
This makes me think Texas is a haven for debtors = if someone owes you money in Texas you are shit out of luck.
In the consulting business I am thinking of advising clients to be extremely careful and have more ‘security instruments’ in place before granting any line of credit to any person or business in Texas
Thoughts on how to deal with this?
A bit over 2 years ago, I tried a business venture with a friend of mine. We got screwed by the bank big time (WF you can go fuck yourself)…
Anyhow, the two of us, French but not willing to surrender and bail on a debt decided to reimburse it all ($100k). Now you’re telling me I could
have just said forget about it, and never pay? Damn…Actually I kind of knew already. They can’t take your primary vehicle either, nor can they
take your house.
I wonder if that has the side effect of lendors being more careful who they give money to. That might not be a bad thing.
It would have ended up on your CBR which is not good.
As long as you stay in Texas the creditor cannot execute…soon as you move out, you are free game. You did the right thing.
There are collection agencies who have ‘dormant judgment units’ some judgments can be renewed up to 20 years, so the concept is lie low for a few years and execute out of nowhere.
However, if you were to stay in Texas for the rest of your life, you have nothing to worry about.
I have heard that in Louisiana, a car cannot be repossesed under any circumstances.
That might be true, but I am not seeing it
My thought is that Texas is a dangerous place to do business for smaller – medium size out of state companies seeking customers in Texas. Even with a personal guarantee you can’t do jack-shit on a default. You truely are screwed.
Define “security instruments”. We’ve won judgements over 2 different individuals/LLCs with whom we had personal guarantees + UCCs—when presented with the alternative of losing their business or paying, they all paid.
Whether it is an enforceable lien against assets (AR especially), or against a home (can’t foreclose, but OTH the party can’t sell either), there is always a way…if the t’s are crossed & the i’s dotted in advance.
Now John Q Public? Yeah, horrible state to try & collect in.