Post-Judgment Receiver in Texas: Powers, Exemptions, and Limits

A post-judgment receiver in Texas is a court-appointed officer who takes control of a judgment debtor’s non-exempt property, sells it, and pays the proceeds to the creditor until the judgment is satisfied. The authority comes from Section 31.002 of the Texas Civil Practice and Remedies Code, which lets a court appoint a receiver “with the authority to take possession of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment.”¹ It is one of the most aggressive collection tools in Texas law, and the limits on it matter as much as the powers.

When a Court Will Appoint One

A receiver is not the first step in collection. Judges have broad discretion under Section 31.002, and creditors are generally expected to show that ordinary methods such as garnishment and writs of execution haven’t worked, or won’t work, against the assets the debtor actually holds. In Santibanez v. Wier McMahon & Co., garnishment had recovered only $42.36, and the debtor held non-exempt property that couldn’t be reached through ordinary process; the court appointed a receiver to take possession and sell those assets.²

The creditor files a motion, often supported by affidavits or financial records, and the court weighs factors like whether the debtor has been evasive, whether assets appear to have been moved or concealed, and whether some less drastic remedy would realistically satisfy the judgment. If the court is convinced, the order spells out the receiver’s authority and identifies the property covered. The motion can be filed in the original case or as a separate proceeding.

What a Receiver Can Seize and Sell

Anything that doesn’t qualify for an exemption is reachable. Section 31.002 gives the receiver authority to take possession of non-exempt property, liquidate it, and apply the proceeds to the judgment.¹ Common targets include:

Rental income, business contract payments, and investment returns
Bank account funds above any exempt amount; the receiver’s rights don’t attach to money at a financial institution until the institution receives a certified copy of the receivership order as required by the Texas Finance Code
Stocks, bonds, and other securities
Business interests, including partnership and LLC membership interests
Artwork, collectibles, and jewelry above the exempt amount
Vehicles beyond the one exempt vehicle per licensed driver in the family
Intellectual property such as patents, trademarks, copyrights, domain names, and websites, which have no standard method of levy

Receivers also have investigative tools. They can demand financial records, subpoena bank statements, and examine the debtor’s dealings. A turnover order can be entered without identifying specific property in advance, which lets the receiver pursue assets as they surface.¹

Property the Receiver Cannot Touch

Section 31.002 expressly forbids courts from ordering turnover of property that is exempt under any statute.¹ Texas exemptions are unusually strong, and a receiver who reaches past them is acting outside the law.

Homestead

The Texas Constitution protects the homestead from forced sale for almost all debts. Article XVI, Section 50 shields the family home from creditors, with narrow exceptions such as the purchase-money mortgage, property taxes, and certain home improvement loans contracted in writing.³ A post-judgment receiver has no authority to seize or sell the homestead to pay a general creditor’s judgment. The protection turns on the property’s character and use, not its dollar value.

Personal Property Up to the Aggregate Cap

Texas Property Code Section 42.001 exempts personal property up to $100,000 in aggregate fair market value for a family, or $50,000 for a single adult who is not part of a family.⁴ Categories that count toward the cap include home furnishings and family heirlooms; tools, equipment, and vehicles used in a trade or profession; wearing apparel; jewelry up to 25% of the applicable aggregate limit; two firearms; one motor vehicle per licensed family member; athletic and sporting equipment; household pets; and livestock (up to 12 head of cattle, 60 head of other livestock, and 120 fowl).

On top of those aggregate limits, certain property is exempt without any dollar cap: current wages, professionally prescribed health aids, and court-ordered alimony or support payments.⁴

Retirement Accounts

Tax-exempt retirement accounts, including IRAs and 401(k) plans, are generally protected under Texas Property Code Section 42.0021. The protection extends to inherited IRAs that were tax-exempt at the time of transfer. It can be lost if funds are withdrawn and not rolled over into another qualifying account within 60 days.

Notice, Bond, and Who Pays for the Receiver

Texas Rule of Civil Procedure 695 requires notice to the debtor before a receiver of immovable property is appointed. The creditor serves the motion by personal delivery, certified mail, or another court-approved method, and if the debtor doesn’t respond the court can still proceed. A court can bypass notice only in narrow circumstances involving compelling evidence that advance warning would cause the debtor to hide or destroy assets.

Before taking control of any assets, the receiver must post a bond, and the applicant is generally required to file one as well. The court sets the amount based on the value of the assets involved. Failure to require proper bonds is grounds for reversal of a receivership order.

The debtor typically ends up paying for the receivership. Section 31.002(e) entitles the judgment creditor to recover reasonable costs, including attorney’s fees, in the turnover proceeding.¹ Section 64.105 provides that a receiver is compensated “in the same manner and amount as is provided by Title 3, Estates Code, for similar services rendered by guardians of estates,” and the court must approve the receiver’s expense reports before reimbursement.⁵ The result is that a receivership stacks the receiver’s fees, the creditor’s attorney’s fees, and liquidation costs on top of the original judgment.

How a Debtor Can Push Back

A debtor is not without options. The most common move is a motion to vacate the receivership order. Grounds include a previously unknown fact bearing on whether the appointment was warranted, a fundamental legal error, or procedural defects such as false statements in the application, defective notice, or missing bonds.

A debtor can also argue that a less drastic remedy would work. Texas courts are not supposed to appoint a receiver when another adequate legal remedy exists, so a credible showing of willingness and ability to satisfy the judgment through installment payments or voluntary turnover can defeat the appointment.

Filing a sworn answer denying the facts in the creditor’s application shifts the evidentiary burden, forcing the creditor to prove up its case at a hearing rather than rely on uncontested allegations. And unlike most trial court orders, an order appointing a receiver can be challenged immediately through an interlocutory appeal, an important safeguard given how much control a receiver exercises over the debtor’s financial life.

What Bankruptcy Does to a Receivership

A bankruptcy filing changes the picture. Under federal law, a post-judgment receiver is a “custodian” of the debtor’s property, and Section 543 of the Bankruptcy Code requires a custodian who learns about a bankruptcy filing to stop making disbursements or taking any action with the property, except what’s necessary to preserve it.⁶ The receiver must then turn over all property in their possession to the bankruptcy trustee and file a full accounting.

The bankruptcy court will protect entities to whom the receiver has become obligated and will provide for payment of the receiver’s reasonable compensation for services already rendered, but it can surcharge the receiver for improper or excessive disbursements made before the filing.⁶ In rare cases the bankruptcy court may allow the receiver to keep operating if that better serves creditors, but the default is that bankruptcy trumps the state court receivership.

Contempt for Refusing to Cooperate

Debtors who ignore a receiver face real consequences. Section 31.002(c) authorizes courts to enforce turnover and receivership orders through contempt.¹ In Santibanez, the debtor was held in contempt for failing to comply with a turnover order that required him to describe and value his assets, claim exemptions, and deliver non-exempt property to the receiver; the Fifth Circuit affirmed both the turnover order and the contempt finding.² Contempt can mean fines, jail, or both.

How the Receivership Ends

A receivership ends when the court says it ends. Once the receiver has collected enough to satisfy the judgment, or has determined further collection is not feasible, any party can move to discharge the receiver and release remaining assets to the debtor. The receiver submits a detailed accounting covering what was collected, what was sold, what was paid to the creditor, and what portion of the judgment remains unsatisfied. If the debtor disputes the accounting, they can file objections and request a hearing. Once the court is satisfied, it issues an order dissolving the receivership and releasing the bond. Any surplus beyond the judgment and associated costs goes back to the debtor.

1
State of Texas. Texas Civil Practice and Remedies Code Section 31.002
2
Law.Resource.Org. 105 F3d 234 – Santibanez v Wier McMahon and Co
3
Justia Law. Texas Constitution Article 16 – Section 50
4
State of Texas. Texas Property Code Section 42.001 – Personal Property Exemption
5
State of Texas. Texas Civil Practice and Remedies Code Section 64.105
6
Office of the Law Revision Counsel. 11 USC 543 – Turnover of Property by a Custodian