Using Receivership to Collect Judgement

One of the biggest asset protection mistakes is underestimating the skill, intelligence, and resolve of creditors and their attorneys. My representation of a current Florida client provides a good example of creditor creativity. My client had a judgment entered against him personally and his defunct corporation in Dallas, Texas where the corporation was doing business. The debtor/ client at all times was a Florida resident. The creditor attorney recorded the judgment in Houston, Texas and applied for a receivership over the insolvent company and the debtor. Florida has not law permitting receiver ships over people. But, Texas Civil Practice and Remedies Code Section 31.002 expressly permits a creditor to put an individual in receivership, and as I found out, courts in Houston, particularly, create personal receiver ships quickly upon the request of any creditor. As a result, the creditor now has appointed a receiver over the person of the debtor. A receiver is an officer of the court who takes over whatever rights and powers the debtor has. The receiver is likely to come to Florida and try to order the debtor to turn over all of his property to the Texas court.

This tactic raises several novel legal issues: For example, does the Texas receiver would have any powers within the State of Florida, or does he have to request appointment of a Florida ancillary receiver ?; can the Texas receiver as officer of Texas court apply exemption law of Texas to Florida debtor? ; can the Texas receiver compel Florida debtor to appear in Texas court proceeding initiated by the receiver?. These and other unique legal issues may be addressed in this case which may test the effectiveness of a creative collection strategy by a creditor attorney

Last updated on May 22, 2020

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