Collecting a Judgment by Sheriff’s Sale

By: Chad Nelson 

Few things are more frustrating than trying to collect a judgment from a judgment debtor who is unwilling to pay. In Texas, a judgment creditor can use many mechanisms to collect a judgment, including, among others, turnover orders, charging orders, garnishments, and writs of execution. While each has its own benefits, forcing the sale of the judgment debtor’s real property through a sheriff’s sale can be an effective and efficient method of collection. Below is a brief outline of the necessary steps a judgment creditor must follow to sell a judgment debtor’s real property and apply the proceeds towards satisfaction of the judgment.[1]

(1) Abstract of Judgment. Although not required to sell a debtor’s real property pursuant to a sheriff’s sale, an abstract of judgment is an important tool to preserve the judgment creditor’s interest in the judgment creditor’s real property. Typically, a judgment creditor requests an abstract of judgment from the district or county clerk. The abstract identifies the judgment debtor, the judgment creditor, the underlying court proceeding, and the outstanding balance on the final judgment. Once obtained, the judgment creditor must file the abstract with the real property records of the county where the judgment debtor’s property lies. After the abstract is filed in the county records, the abstract serves as a lien to protect the judgment creditor’s interest.[2]

(2) Writ of Execution. Thirty days after the judgment is rendered, the judgment creditor should also seek a writ of execution from the clerk of the court. Unlike an abstract of judgment, a writ of execution is required to force the sale of a judgment’s real property. A writ of execution is directed to the sheriff or any constable of any county of the State of Texas and grants authority to any sheriff or constable to collect any real or personal property belonging to the judgment debtor. Once obtained, the judgment creditor must then serve the writ on the sheriff or constable in the county in which the judgment debtor’s property lies.[3]

(3) Levy. Once the writ of execution is served on the sheriff, the sheriff must timely levy on (take possession of) the debtor’s property located in that county.[4] However, the sheriff first must attempt to contact the judgment debtor, giving the judgment debtor the opportunity to identify non-exempt property for the sheriff to fully collect the final judgment. If the debtor does not designate particular real or personal property to be sold, or if the value of the debtor’s property does not exceed the amount the sheriff is authorized to collect, then the sheriff may levy on all of the debtor’s non-exempt property located in the county. Once the sheriff levies on the debtor’s real property, the sheriff has the authority to sell the property.

(4) Notice of Sale. After levying on the debtor’s property, the sheriff must post a notice of sale in a newspaper published in that county once per week for three consecutive weeks prior to the sale. The notice must describe the property to be sold and provide the details of the sale.

(5) The Sale. After noticing the sale for three consecutive weeks, the real property may be sold at public auction to the highest bidder. Sheriff’s sales occur on the first Tuesday of the month between the hours of 10 a.m. and 4 p.m. at the courthouse door in the county.  Typically, the buyer at the sheriff’s sale must pay the full purchase price in cash or via cashier’s check to the sheriff within a matter of hours. Upon payment, the sheriff issues a sheriff’s deed granting title to the successful bidder. The successful bidder takes the property subject to any existing liens, making it important for a buyer to thoroughly check the real property records and seek professional advice, as needed.

(6) Proceeds Delivered. Finally, the sheriff’s costs incurred to levy and sell the real property are deducted from the proceeds from the sale, and the remaining proceeds are delivered to the judgment creditor and applied towards satisfaction of the judgment.