Collections While Judgment on Appeal

Texas Collections lawyers can still pursue the judgment, even if the judgment is appealed. We are frequently retained to work on post-judgment matters that are on appeal by lawyers that have obtained judgments but need help with the post-judgment collection.

When we are hired while a judgment is on appeal, the purpose is sometimes to force the judgment debtor to file a bond. In those cases we aggressively pursue collection efforts until the judgment debtor files a proper appeal bond.

If the debtor has not filed a proper bond the judgment can still be pursued. Otherwise, the appeal has no affect on the post-judgment remedies available to the creditor.

A proper bond is normally posted in the amount of a judgment plus interest for a year. The bond is usually secured by a commercial surety or by the posting of cash. In such a case post-judgment collections is suspended.

Additionally, the judgment debtor may file an affidavit of net worth and then only post a bond equal to 50% of the judgment debtor’s net worth, if it is less than the amount of the judgment. Once the affidavit is filed the only post-judgment effort that is allowed is discovery into the net worth of the judgment debtor. In that case we attack the accounting that the judgment debtor relies upon to state his net worth and lower the normal bond. The burden is on the judgment debtor to prove his net worth using Generally Accepted Accounting Principles. We then use that information to convince a judge that either the defendant is not following proper accounting procedures or that the figures used by the judgment debtor are otherwise faulty.

Darrell W. Cook was originally a CPA for ten years with large accounting firms like Coopers & Lybrand (now Price Waterhouse Coopers) and BDO Seidman. This background is most useful in these circumstances as the process is accounting-intensive.

We have had success in attacking the net worth affidavit, even convincing judges to actually strike the affidavit on occasion. At the very least, we have been able to force a greater bond.

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