BANKRUPTCY JUDGMENT LIEN

Texas Property Code Section 52.001 provides that an abstract of judgment when recorded and indexed in a county in which a judgment debtor owns real property creates a valid judgment lien on that property, unless the real property is exempt from seizure or forced sale. 

This judgment lien also attaches to property acquired after such recording and indexing, according to the plain language of the statute.

There are three steps to securing ad maintaining a valid judgment lien  against a judgment debtor.  TAPPS, L.L.C. v. Nunez Co., 368 B.R. 575, 577 (W.D. Tex 2005).

First, the judgment creditor must obtain and file an abstract of judgment in accordance with Chapter 52 of the Texas Property Code.  Id. 

Second, the judgment must be kept alive through the issuance of a writ of execution.  Id.  Texas Civil Practice & Remedies Code Section 34.001(a) provides that a judgment becomes dormant and may not be executed on unless a writ of execution is issued within ten (10) years after the rendition of the judgment.

Finally, if the judgment is not satisfied within ten (10) years of the recording and indexing of the abstract, then a subsequent abstract must be obtained and filed in accordance with Chapter 52 of the Texas Property Code.  TAPPS, L.L.C at 577.

If a judgment creditor obtains a judgment against you prior to the filing of a bankruptcy case and properly perfects their lien by meeting the above requirements, then their judgment lien “passes” through bankruptcy and remains a valid lien. 

Stated another way, the Debtor’s personal liability can be discharged in bankruptcy, but the lien survives the discharge.

If the lien has not attached to property prior to the filing of a bankruptcy petition, then even though Section 52.001 of the Texas Property Code applies to after acquired property, the judgment creditor cannot create a valid lien after a bankruptcy filing because the underlying debt has been discharged.

The key for the judgment creditor is to file the abstract prior to the bankruptcy and for the lien to attach to property owned by the Debtor at the time of the bankruptcy filing, which of course would exclude the Debtor’s homestead property.

As always, any opinions expressed on this website are just that, opinions. So if you have a question regarding bankruptcy or debt relief, then please give me a call to discuss your individual situation.  Bankruptcy, as many other areas of the law, can be very case or fact specific.  I pride myself on giving you the answers to your questions that are based on your individual circumstances.