Texas residents anticipate receiving their Federal Stimulus payments after the federal government passed the CARES Act. With Texans expecting to receive upwards of $1,200.00 there was concern about debt collectors and their ability to freeze consumers’ bank accounts. The Texas Supreme Court issued its 10th Emergency Order to stop most actions to collect consumer debt until May 7, 2020.
I already have a judgment against me, can my accounts be garnished?
There are two different ways that a consumer’s bank account can be frozen. Whether a judgment creditor files a writ of garnishment or requests that a receiver be appointed, neither of these options can happen before a judgment is entered. If a consumer knows that there is a judgment taken against him or her, the consumer will want to be extra careful about depositing their stimulus check into their bank account.
While judgment creditors are allowed to issue a writ of garnishment right away, they are not allowed to serve it on your bank until after May 7, 2020. If the judgment creditor in your debt collection case already had a garnishment in place before April 9, 2020, the parties are strongly encouraged to reach an agreement on the garnishment. The Texas Supreme Court Emergency Order also encouraged courts to aid and facilitate a swift settlement.
If a receiver was appointed in your judgment, then the receivership cannot freeze any funds as long as your account is in a Texas chartered financial institution. Receiverships can still seize other non-exempt assets, like a second piece of land that is not homestead protected.
If there is not a judgment in a lawsuit pending against you, a request for default judgment may be filed, but no hearings shall be set and everything will be held off until at least April 30, 2020.
If you had a debt collection case pending, there will be no dismissal of cases for lack of prosecution during this time period.
Can any consumer debts be collected during this time?
The Texas Supreme Court Emergency Order does not address general debt collection. It only addresses limited areas of debt collection in court cases. Debt collectors are still allowed to collect debt during this period of the COVID-19 pandemic, as long as they abide by Texas and federal debt collection laws.
What should I do if I can’t respond to lawsuits electronically?
If you have been sued and an attorney is representing you, your attorney should have access to electronic filing. Defendants who represent themselves in court, also called “pro se” litigants may file electronically by following the registration procedures outlined by EFileTexas at https://www.efiletexas.gov/. While allowed, Pro Se litigants are not required to file electronically. When the courts reopen, you can file documents with the court clerk in your county in-person. Until then, documents can be filed by mailing them to the court clerk. It is important to send an extra copy of your document(s) to file-marked and returned to you for your records.
It is important to note that under the Texas Supreme Court Emergency Order, no default judgments can be heard and the time to file an answer of any consumer debt case is paused at least until April 30, 2020.
Lone Star Legal Aid is a 501(c)(3) nonprofit law firm focused on advocacy on behalf of low-income and underserved populations. Lone Star Legal Aid serves millions of people at 125% of federal poverty guidelines that reside in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties of southwest Arkansas. Lone Star Legal Aid focuses its resources on maintaining, enhancing, and protecting income and economic stability; preserving housing; improving outcomes for children; establishing and sustaining family safety and stability, health and well‐being; and assisting populations with special vulnerabilities, like those who have disabilities, or who are elderly, homeless, or have limited English language skills. To learn more about Lone Star Legal Aid, visit our website at www.lonestarlegal.org.
Media contact: Clarissa Ayala, cayala@lonestarlegal.org
