Post- Judgment Receiverships

WHAT IS A RECEIVERSHIP?

A receivership is a legal process that takes place after a court issues a judgment against someone who owes money. The court appoints a neutral third party, called a receiver, to find and take control of the debtor’s non-protected (non-exempt) property. The receiver then uses the money collected (or the proceeds from selling other types of property) to pay off the debt. While the receiver helps collect the debt, they work for the court—not the creditor—and must act fairly and impartially. This process is regulated by Texas law under Texas Civil Practice and Remedies Code § 31.002.

Why a Receiver is Appointed:

• To help the person who won a lawsuit (the “judgment creditor”) collect the debt owed by the defendant (“the judgment debtor”).
• To take control of the judgment debtor’s non‑protected property (such as certain bank accounts, investment accounts, or other non-protected assets), sell it, and use the money to pay the outstanding debt.

Receiverships in justice courts are limited in scope and duration compared to receiverships in other courts. As of May 1, 2022, the Texas Supreme Court has mandated the use of a specific form for appointing receivers in justice courts, which limits the initial term of the receivership to 180 days.

UNDERSTANDING THE RECEIVERSHIP PROCESS

What can a receiver do?

A receiver appointed by the Justice Court is typically granted limited authority to:

• Obtain your credit information and credit reports
• Gather your financial information and records
• Negotiate payment agreements
• Take possession of non-exempt financial accounts
• Certify copies of the court's order
• Receive and apply funds to satisfy the judgment

What can't a receiver do?

Generally, Justice Courts in Tarrant County will not allow receivers to:

• Enter or lock you out of your home or business
• Open your mail
• Collect cash you have on hand
• Interrupt your utilities
• Direct law enforcement without specific court orders
• Take possession of exempt property

How long does a receivership last?

A.      Initial Term

As mandated by the Texas Supreme Court form effective May 1, 2022, the initial term of a receivership in justice court is limited to 180 days after the date of the order unless extended for reasons explained below. This time limit helps ensure that the receivership process remains efficient and does not unduly burden the judgment debtor.

B.      Extensions for Good Cause

If the receiver needs more time to complete their duties, they may request an extension of the receivership. The court may grant such an extension only if good cause is shown. "Good cause" generally means a substantial reason amounting to a legal excuse for needing additional time. For example, good cause might exist if the receiver has identified non-exempt property but needs more time to liquidate it, or if the judgment debtor and receiver have negotiated a payment plan that extends beyond the initial 180-day period. Without sufficient evidence showing essential necessity, orders will usually not extend beyond one year.

Note that this time period is different than the time the judgment creditor has to collect the date. The receivership is a limited amount of time where a receiver is granted authority to assist in collecting the judgment, but the judgment creditor will still have the legal right to collect the debt (after the receivership ends) for up to ten years, unless renewed after that.

If you are representing yourself, we encourage you to review the below resources.

Receivership Proceedings in Justice Courts

Post-Judgement Receiverships Brochure