Appointing A Receiver In Texas Turnover Proceedings

Turnover Relief in General

After you have a judgment against a debtor, you have quite a few post-judgment collection methods available to you. One method is the application for turnover relief. In essence, turnover relief allows you to confiscate property belonging to your judgment debtor that is not reachable by more traditional post-judgment strategies like a Writ of Execution or a Writ of Garnishment.

The Court Has Authority to Appoint a Receiver

As part of your petition for turnover relief, you may request that the court appoint a receiver. Know, though, that the appointment of a receiver is not mandatory. It is wholly within the discretion of the court. Ross v. 3D Tower Ltd., 824 S.W.2d 270, 272 (Tex. App.--Houston [14th District] 1992, writ denied).

The Requirements of a Receiver

There are no explicit qualifications for a receiver in post-judgment turnover proceedings. Schultz v. Cadle Co., 825 S.W.2d 151, 154-155 (Tex. App.--Dallas 1992), writ denied per curiam, 852 S.W.2d 499 (Tex. 1993); Childre v. Great Southwest Life Insurance Co., 700 S.W.2d 284, 288 (Tex. App.--Dallas 1985, no writ). But, if you would like to track the time-honored requirements for a receiver, you should ask the court to do so. Along with your request, you ought to propose a person who:

1. Is a resident and qualified voter of the state of Texas at the time of appointment;
2. Maintains actual residence in Texas all through the receivership, and
3. Is not a party, attorney, or other person involved in the action for appointment of a receiver. Tex. Civ. Prac. & Rem. Code Section 64.021.

If the court does say yes to the appointment of a receiver for your turnover relief, the receiver will "take possession of" all the judgment debtor's nonexempt property. He will then sell that property and give the proceeds to you to the extent required to satisfy your judgment. Tex. Civ. Prac. & Rem. Code Section 31.002(b)(3).

Compensation for the Receiver

The question of compensating the receiver and reimbursing his expenses is a question than falls within the discretion of the court. But, generally speaking, the receiver's expenses are charged to the judgment debtor. The receiver's costs are considered costs that are charged to the judgment debtor and paid with assets and money in the possession of the receiver. Archer, 262 S.W.2d at 217.

Though this works well when the receivership estate has resources, problems clearly arise when there are no assets or insufficient assets to cover both the judgment and the receiver's charges and expenses. In situations where there are no assets or there are insufficient assets, a conflict can take place between you and the receiver. In those situations where there are no assets or insufficient assets you, as the judgment creditor, might have to pay the receiver's fees and expenses.

Conclusion

Turnover proceedings are a really helpful means for collecting your Texas judgment. But, to assist you in the proceedings you should request that the court name a receiver. That receiver will then have the power to acquire possession of all the judgment debtor's non-exempt possessions and sell them to pay your judgment. Remember, though, that you may be liable to satisfy the receiver's charges and expenses if your judgment debtor does not have adequate assets to cover both your judgment and your receiver's fees and costs.