Receivership – If you are sued and end up with a judgment against you, a debt collector may try to collect through a receivership. This is where the debt collector asks the state court judge to appoint a receiver to assist in collecting the money owed on the judgment.
Under Texas law, the receiver may be able to take control of non-exempt property to turn over to the creditor to pay the judgment owed. For example, the receiver may ask the court for an order to seize funds in a bank account, including electronically deposited wages. Or a receiver may request an order allowing him to take over a business.
Typically, the Court Order appointing the receiver includes a long list of documents that the debtor has to turn over pertaining to finances, such as bank account records, title documents, etc. The receiver may be able to obtain a court order to enter on property owned or leased by the debtor where non-exempt property might be located.
The good news is that bankruptcy trumps receivership. So, if a receiver is appointed, filing bankruptcy stops further action by the receiver. It may be possible to get a return of property seized by the receiver through bankruptcy in some instances.