BILL ANALYSIS

 

 

 

C.S.H.B. 5009

By: Hayes

Judiciary & Civil Jurisprudence

Committee Report (Substituted)

 

 

 

BACKGROUND AND PURPOSE

 

The bill author has informed the committee that, even though Texas maintains strong debtor protections while ensuring creditors can collect legitimate debts, recent implementation challenges have undermined effective judgment enforcement, particularly in justice courts, and that some courts have refused to appoint turnover receivers, which is a key mechanism for debt collection. The bill author has further informed the committee that there is also confusion regarding which funds are exempt from collection, especially wages deposited into bank accounts, and that Texas requires writs of execution to prevent judgments from becoming dormant after 10 years but does not expressly recognize turnover receiverships for this purpose. C.S.H.B. 5009 seeks to address these issues through targeted amendments, among them a requirement for justice courts to either grant applications for turnover receivers or schedule hearings when judgments remain uncollected after six months.

 

CRIMINAL JUSTICE IMPACT

 

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

 

ANALYSIS

 

C.S.H.B. 5009 amends the Civil Practice and Remedies Code to authorize a judgment creditor who is unable to obtain satisfaction on the judgment of a justice court within six months from the date the judgment is signed to submit an application for the appointment of a receiver to take possession of nonexempt property for purposes of paying proceeds from the sale of the property to the judgment creditor. The bill requires the court, on receipt of the application, to grant the application or set the application for a hearing. Notice of the hearing must be served on all parties not later than the 14th day before the date of the hearing. The bill requires the court, unless the judgment debtor contests the application, to appoint a receiver, which is expressly not required to be the receiver proposed by the creditor.

 

C.S.H.B. 5009 authorizes a justice court to charge a fee capped at $25 for a motion for the court's assistance in obtaining satisfaction on a judgment. If an order entered to collect a judgment is for the enforcement of a child support obligation or a judgment for past due child support, any costs recoverable for that purpose, including the fee of a receiver appointed to take possession of nonexempt property for purposes of paying proceeds from the sale of the property to the judgment creditor, may be enforced by any means available for the enforcement of the child support obligation or judgment for past due child support.

 

C.S.H.B. 5009 establishes that the prohibition against a court entering or enforcing an order to collect a judgment that requires the turnover of the sales proceeds of or the disbursement of property exempt under any statute, including Property Code exemptions for certain qualified savings plans from creditors' claims, does not prohibit the turnover of nonexempt property subject to garnishment. The bill authorizes a court to enter or enforce an order to collect a judgment that requires the turnover of nonexempt property without requiring a judgment creditor to prove the existence of specific property subject to turnover.

 

C.S.H.B. 5009, with respect to its provisions relating to a court's order to collect a judgment, applies to the collection of any judgment, regardless of whether the judgment was entered before, on, or after the bill's effective date.

 

C.S.H.B. 5009 establishes the following:

·         if a receiver is not appointed under provisions relating to a court's order to collect a judgment within 10 years after the rendition of an applicable judgment, the judgment is dormant and execution may not be issued on the judgment unless it is revived; and

·         if such a receiver is appointed within that time period but a second receiver is not appointed within 10 years after the appointment of the first receiver, the judgment becomes dormant.

The bill authorizes a second receiver to be appointed at any time within 10 years after the first receiver appointment. These provisions apply only to a judgment that is not dormant on the bill's effective date and was entered before, on, or after that date. A judgment that is dormant on the bill's effective date is governed by the law applicable to the judgment immediately before that date, and that law is continued in effect for those purposes.

 

EFFECTIVE DATE

 

September 1, 2025.

 

COMPARISON OF INTRODUCED AND SUBSTITUTE

 

While C.S.H.B. 5009 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

 

Both the introduced and the substitute set out provisions conditioning the applicable court's required actions if a judgment creditor is unable to obtain satisfaction on a judgment of the court within six months. Whereas the introduced required the court, after such judgment was rendered and application for the appointment of a receiver has been made by the judgment creditor, to either grant said application on submission or set the application for hearing, with notice provided by the court to all parties at least 14 days prior to the hearing, the substitute instead provides the following with respect to that judgment creditor's inability to obtain satisfaction as follows:

·         if a judgment creditor is unable to obtain satisfaction on the judgment of a justice court within six months from the date the judgment is signed, the creditor may submit to the court an application for the appointment of a receiver to take possession of nonexempt property for purposes of paying proceeds from the sale of the property to the judgment creditor;

·         requires the court to grant the application or set the application for a hearing upon receipt of such an application; and

·         with respect to a hearing set by the court on such receipt, requires service on all parties not later than the 14th day before the date of the hearing.

 

Both the introduced and substitute require the court, unless the judgment debtor contests the application, to appoint a receiver. However, the substitute expressly does not require the receiver to be the receiver proposed by the creditor, whereas the introduced did not contain this provision.