New Texas Rules Protect Exempt Money After a Debt Judgment

Citation

Tex. R. Civ. P. 679a, 679b, and amended Rules 306a, 503, 505, 508, 509, 510, 663a, 664a (Misc. Docket No. 22-9031, preliminary approval Misc. Docket No. 21-9152)

Court or agency

Supreme Court of Texas

Date

May 1, 2022

Law

Texas law

Summary

Implementing Government Code § 22.0042, the Supreme Court of Texas gave final approval on April 25, 2022, to new Rules 679a and 679b, amendments to the garnishment and justice court rules, and four approved forms, all effective May 1, 2022. Justice courts must use the Court's form order when appointing a turnover receiver against an individual, absent good cause.

Background

In 2021 the Legislature added § 22.0042 to the Government Code, directing the Supreme Court of Texas to create a simple, expedited, bilingual way for judgment debtors to claim exemptions when their personal property is seized. The Court preliminarily approved rules in Misc. Docket No. 21-9152 on December 7, 2021, took public comment, and gave final approval in Misc. Docket No. 22-9031 on April 25, 2022.

What changed

Notice after a freeze or seizure (Rule 679b(a)). If a post-judgment turnover order, an order appointing a receiver under Civil Practice and Remedies Code § 31.002, a writ of garnishment, a writ of execution, or another post-judgment order freezes or seizes an individual judgment debtor’s personal property, the receiver or judgment creditor must serve three Court-approved documents: the Notice of Protected Property Rights, the Instructions for Protected Property Claim Form, and the Protected Property Claim Form. Service is due within three business days after the receiver or creditor learns of the freeze or seizure.

Suspension period (Rule 679b(b)). A receiver or officer may not sell the debtor’s personal property or pay proceeds to the creditor within 14 days after those documents are served, or 17 days if served by mail.

Claim and hearing (Rule 679b(c)). If the debtor files the claim form or another sworn document with the same information, the court must hold a hearing, and no sale or payout may occur until the court rules. The debtor must prove the exemption and the value of the exempt property, but a signed claim form is a sworn statement that satisfies that burden if unchallenged. The court must decide within 10 days after the claim is filed, unless it extends the time for good cause, and must order exempt property released within three business days.

Turnover receivers (Rule 679a). A justice of the peace appointing a receiver to collect from an individual must use the Supreme Court’s form Order Appointing Receiver unless good cause is shown in a written order. Other courts may use the form, and any other receivership order must state that the receiver must comply with Rule 679b and must hold property during the suspension period.

Other amendments. Rule 663a now requires a creditor serving a writ of garnishment on the debtor to include the same notice and forms, and Rule 664a directs courts to follow Rule 679b’s procedures. In justice court, Rule 505.1 now requires every judgment awarding money to include a bilingual statement that an individual’s money or property may be protected, and Rule 508.3 requires default judgments in debt claim cases to comply with it. In its order, the Court also directed that a trial court must not refuse the claim form simply because the debtor used a form or has no lawyer.

Our take

These rules are the most significant change to Texas post-judgment collection for consumers in years. Before them, an unrepresented person whose account was frozen often had no clear path to get exempt wages or benefits back in time to pay rent. Now there is a defined notice, a defined form, a short pause on payouts, and a short deadline for the judge.

The rules have limits. They protect only property that is actually exempt, and the debtor still bears the burden of proof if the creditor challenges the claim. The deadlines also cut both ways: the 14-day suspension can pass quickly if the mail is slow or the notice is overlooked.

What it means if you’re sued in Texas

The rules apply after a judgment, so the first and best step is still to answer and defend the lawsuit. If a judgment already exists and your account is frozen, look for the Notice of Protected Property Rights, fill out the Protected Property Claim Form carefully, and file it with the court right away. Keep records showing where the money came from, such as payroll deposits or benefit statements. A free case review is available if you need help with a frozen account or a receiver.

Takeaway

Watch for the Notice of Protected Property Rights after any freeze or seizure, and file the Protected Property Claim Form promptly. A signed form counts as a sworn statement and, if unchallenged, can carry your burden of proof.

Sources

Primary authority

• Misc. Docket No. 22-9031, final approval of Rules 679a and 679b and related amendments and forms (Supreme Court of Texas)
• Misc. Docket No. 21-9152, preliminary approval (Supreme Court of Texas)
• Form Order Appointing Receiver (Supreme Court of Texas)
• Texas Government Code chapter 22, including § 22.0042 (Texas Constitution and Statutes)

Secondary sources

• Texas Judicial Council resolution, Civil Justice Committee recommendations (2020)

This summary and analysis are general information, not legal advice. Later decisions, amendments or agency actions may change the law; check the current status before relying on it.