Sometimes the problem isn’t the deficiency. It’s getting the collateral back in the first place. The borrower has stopped paying, won’t surrender the collateral, and is using or hiding it. Self-help repossession is often the first option, because Texas Business & Commerce Code § 9.609 lets a lender repossess without going to court as long as it can be done without breaching the peace. But self-help isn’t always available, and even when it is, it isn’t always practical.
When self-help fails or isn’t on the table, the tool is sequestration under Texas Civil Practice & Remedies Code Chapter 62. It is a pre-judgment remedy: on the secured creditor’s application, the court issues an order, and the sheriff or constable seizes specific personal property.
We file sequestration as part of our lender-side practice. Here is how the framework works.
When Self-Help Repossession Isn’t Enough
Self-help is the standard way to recover collateral on a commercial loan. The lender’s recovery vendor takes possession without involving the court, as long as it stays inside the breach-of-peace limitation. For most equipment, vehicles, and similar collateral, self-help is fast and cheap.
It stops working when:
- The collateral is locked behind security the vendor can’t legally get past. Equipment inside a locked building or fenced yard, vehicles in a garage. Forcing entry usually breaches the peace, which forfeits the self-help right.
- The borrower physically resists. Confronting the borrower or anyone else at the property who objects to the repossession usually breaches the peace.
- The collateral has been moved out of state or hidden. Self-help only works if you can find the collateral and reach it.
- The collateral is large or specialized. Heavy equipment, fixtures, marine vessels, aircraft, and the like may need specialized recovery beyond ordinary self-help.
- The borrower has filed bankruptcy. Self-help is barred by the automatic stay. Recovery has to come through bankruptcy-court relief or post-petition consent.
- There are competing claims to the collateral. Other secured parties, lien claimants, or third-party purchasers may have intervening rights that a court has to sort out before the lender takes possession.
In each of these, the path to possession runs through the court, by way of sequestration, replevin, or a related remedy.
Sequestration Under Chapter 62
Sequestration is governed by Chapter 62 of the Texas Civil Practice & Remedies Code and Texas Rules of Civil Procedure 696–716. The procedure runs like this:
Application. The secured creditor files a written application supported by affidavit. It identifies the property, establishes the creditor’s right to possession (usually through the security agreement and the borrower’s default), and establishes one of the statutory grounds for sequestration: that the borrower may injure or destroy the property, may dispose of it in a way that prejudices the creditor, has fraudulently obtained it, or another listed ground.
Bond. The creditor posts a bond, typically twice the value of the property, to protect the borrower against wrongful sequestration.
Writ. The court issues a writ directing the sheriff or constable to seize the specified property.
Service and seizure. The officer serves the writ on the borrower and seizes the property.
Replevy bond. The borrower gets a chance to “replevy” the property, meaning to keep possession by posting a counter-bond, on conditions the court sets.
Hearing. A hearing on the merits of the seizure follows, where the borrower can challenge the grounds for sequestration.
The procedure is fast, since the writ can issue on an ex parte application with notice and a hearing to follow, and it holds up constitutionally when the procedural protections are followed.
When Sequestration Makes Sense
Sequestration is real work. It costs more than self-help and requires the creditor to commit to following through on litigation. We use it when:
- The collateral’s value justifies the cost of the procedure (typically meaningful equipment, vehicles, or other personalty)
- Self-help has been tried and failed, or isn’t available for one of the reasons above
- The collateral is at risk of being dissipated, damaged, or lost if nobody acts
- The lender is willing to litigate the underlying claim to judgment, because sequestration is pre-judgment but the action it accompanies still has to be prosecuted
For low-value collateral, or where the borrower will probably surrender on demand, sequestration is usually overkill. We tell lenders straight when the procedure is worth it and when it isn’t.
Practical Issues in Texas Sequestration
A few things come up over and over:
Identifying the property. The writ has to identify the property with reasonable specificity. For fungible inventory or fast-changing equipment fleets, that can be a real challenge, so our pre-application work includes nailing down the property identification.
The bond. A bond at twice the property value ties up cash or surety capacity, and for very large collateral the cost of that bond is not trivial.
Resistance at seizure. The sheriff or constable may run into resistance. Officers generally have protocols for it, but in practice the seizure can take longer than expected.
Replevy. Borrowers who can post a replevy bond will, which keeps the collateral in their hands during the underlying litigation. The replevy bond usually protects the lender’s interest well enough, but the lender doesn’t get immediate possession.
Out-of-state property. Sequestration is a Texas remedy. Property in another state has to be handled under that state’s law, with local counsel.
Replevin
Replevin is the related common-law action for recovering specific personal property. In Texas it has largely been folded into the sequestration framework, though some related common-law principles still operate. For most practical purposes, a secured creditor seeking pre-judgment recovery uses Chapter 62 sequestration.
Coordinating Recovery With the Deficiency Suit
Sequestration is usually the first step in a longer process. Once the property is recovered, the creditor disposes of it under Article 9, with the commercial-reasonableness obligations covered elsewhere, and pursues the deficiency. Depending on the facts, the recovery action and the deficiency action can be combined or run in sequence.
We typically file a single suit that:
- Pleads the breach of the note and security agreement
- Seeks judgment for the full balance
- Seeks pre-judgment sequestration of the collateral
- Builds toward eventual disposition of the collateral and prosecution of any resulting deficiency
Handling it in one action is more efficient than running parallel suits.
When Self-Help Won’t Work, Move on Sequestration
If your institution has collateral the borrower won’t surrender and self-help has failed, we can file sequestration quickly. The procedure is well-established, we use it routinely, and the timeline from intake to writ is usually days, not weeks.
Send us the loan documents, the security agreement, the borrower’s information, and a description of the collateral. We will evaluate the matter and move as the facts allow.
Contact us to get started or call 214-368-4686.
Related Pages
- For Lenders and Financial Institutions
- Pursuing the Deficiency After Collateral Liquidation
- UCC Article 9 and Commercial Reasonableness
- Promissory Note and Guaranty Enforcement
- Coordinating With Bankruptcy Counsel
- Texas Collections Law FAQs
Sequestration FAQs
What's the difference between sequestration and self-help repossession?
Self-help is non-judicial: the lender's recovery vendor takes possession without the court, subject to the breach-of-peace limitation. Sequestration is judicial: a court issues a writ directing the sheriff or constable to seize the property.
When should we use sequestration instead of self-help?
When self-help is unavailable or has failed, when the collateral is at risk of dissipation, when the borrower has filed bankruptcy and you need stay relief, or when the collateral's value justifies the procedural cost.
How fast can sequestration produce possession?
Application to writ can move within days. Seizure usually follows within a week or two of the writ, depending on the sheriff or constable's workload. The borrower's replevy option can keep the property in its hands during the underlying litigation, but the property is then under the court's supervision.
What does sequestration cost?
The bond, typically twice the property value, is the main cost. Court filing fees, sheriff's or constable's fees, and our fees for the application and hearing add to it. For high-value collateral, the cost is reasonable against the value secured. For low-value collateral, sequestration is usually overkill.
What if the borrower resists the seizure?
Sheriffs and constables have protocols for handling resistance, and the seizure may take longer than expected. We coordinate with the executing officer so the seizure is carried out properly.
What if the borrower posts a replevy bond?
The borrower keeps possession during the litigation, with the bond protecting the lender's interest. Our strategy then shifts to prosecuting the underlying claim to judgment, with the bond standing in as the substitute security.
Can we sequester property held by a third party?
Yes, with the right procedural attention. Property held by a third party, such as a bailee, a custodian, or a buyer who took without authority, can be reached through sequestration directed at the holder, though the holder's rights and any defenses have to be addressed.
What if the property is in another state?
Texas sequestration generally doesn't reach property in another state. Recovering it there means using that state's procedures, usually with local counsel.
Does sequestration apply to bankruptcy debtors?
The automatic stay bars sequestration against a bankrupt debtor's property without stay relief. We coordinate with bankruptcy counsel on stay-relief motions where sequestration is appropriate against a bankrupt debtor.
How does sequestration interact with the eventual deficiency suit?
Sequestration is part of the same litigation that establishes the underlying claim and produces the eventual deficiency judgment. The recovered collateral is disposed of under Article 9, the proceeds applied, and the deficiency prosecuted. We run the whole sequence, sequestration to disposition to deficiency, as one integrated matter.