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Austin Texas Lawyer Tip: Texas Collection Law Basics

2011-04-24T12:17:00.000-07:00

Austin Texas Lawyer Tip: Texas Collection Law Basics

Texas is an interesting state to attempt collection, and for our out of state readers, it is probably important to do a brief overview of collection in Texas. At the outset, collection in Texas is extremely difficult compared to other states, and activities that you may be used to doing in other states are very often not available in Texas. Although literally books could be written on this subject, I've compiled a list of the 10 things you need to know about Texas collection law.

1. There are large property exemptions

The Texas homestead exemptions are more expansive than you might experience in states that do not begin with the letters "Florida". This makes turning judgments into cash difficult and futile. The good news is that, if you can prove it, debtors cannot convert non-exempt property into exempt property undert Tex. Prop. Code Section 42.004.

2. Texas allows non-judicial foreclosure

The creditor in Texas with a security interest very frequently can recover their collateral without involving the court system at all.

3. Texas bank garnishment allows banks to charge for their fees

No one says the bank lobby in Texas doesn't do its job. When a creditor attempts to seek a garnishment of a bank account, not only do they not have much ability to get access to the account balance without a voluntary statement from the debtor, often if a post judgment garnishment is filed, the already harmed creditor may have to pay the bank for its fees in filing answers to garnishment actions (often as much as $1500 just to file an answer and saying, "nope, he ain't got nothin'").

4. There is no wage garnishment in Texas

Yep, you read that right. Unless you are collecting for child support, wages are exempt, so attempting to garnish wages can make you a defendant in another action.

5. There is an excellent Turnover Statute

One good statute for collectors of unsecured claims is the turnover statute, which allows you to either set up a receiver to run businesses for the purpose of turning funds over, or to take assets that are not subject to execution and turn them into cash. And even better, the burden is on the debtor to show that the property is exempt.

6. There are no exempt assets for a business

. Most businesses have lines of credit, so unsecured creditors are often unable to collect anyway, but businesses do not get the benefit of the vast exemptions. So if your debtor puts his car in the company's name and it doesn't have a lender? Have at it.

7. Texas follows the Uniform Enforcement of Foreign Judgments Act

. So if you need a judgment domesticated in Texas, and you're familiar with UEFJA procedures, they will be very familiar to you.

8. The Texas Homestead Property Exemption is unlimited in value.

Yep, if you have $10,000,000 in equity in your homestead, 100% of that is exempt from execution, and there is no forced sales of homestead by unsecured judgment creditors.

9. The Mechanics Lien Statutes are complicated

As a bonus, they are strictly interpreted, so if you don't do your notices correctly, you may very well be toast. However, you will always have that contract claim against the defunct general contractor and an unjust enrichment claim against the owner who doesn't pay for value.

10. Fraudulent Transfer Actions are often separate lawsuits

Unfortunately, there is often not a post judgment procedural remedy related to fraudulent transfers, and often involves filing suit after the judgment for such a determination. Texas has particularly weak successor liability statutes as well, determining that the buyer of the asset at an asset sale usually has no liability to the unsecured creditors of the asset seller (unless there was an insider relationship and/or less than reasonably equivalent value was given).

Thus, Texas is a challenging place to collect on a judgment, and the best place to be in most litigations is to be a secured lender. So if you are lending to a Texas debtor, it is very important to attempt to get a security interest in collateral since that is very often the only asset available for collection.

Unlimited Charitable Gifts Through the End of 2005

2011-04-24T12:09:00.001-07:00

Unlimited Charitable Gifts Through the End of 2005

The Hurricane Katrina Emergency Tax Relief Act (KETRA) allows unlimited gifts to charity up to a donor's total income until the end of 2005. This provision also permits unlimited IRA withdrawals and gifts to charity. Under Sec. 301(b)(1)(A), a "qualified contribution shall be allowed only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer's contribution base (as defined in subparagraph (F) of section 170(b)(1) of such Code) over the amount of all other charitable contributions allowed under such section 170(b)(1)”. Therefore, a donor may usually make gifts up to 100% of adjusted gross income (AGI). You should consult with your tax advisors to determine the actual effect.

Here are some questions and answers regarding the new act:

When is this 100% gift deduction rule applicable?Qualifying cash gifts must be made between August 28, 2005 and December 31, 2005.

Which charities qualify for the 100% deduction?Public charities generally will qualify.

Must the 2005 End of Year Gift be for Katrina relief?
No, if the gift is by an individual, but yes if it is by a corporation. A corporation may give up to 100% of taxable income for Katrina relief. An individual may make a 2005 end of year gift to public charities for any purpose.

Which charities or gifts will not qualify?
With the new 100% gifts rule, there are several exceptions - no private foundation gifts, no supporting organization gifts, no donor advised fund gifts and no gifts of property such as stock or land.

How does this affect IRA gifts?When a person over age 59½ withdraws funds from his or her IRA, the withdrawal will be included in the IRA owner's taxable income. Under the new 100% of income charitable gifts option, the withdrawn funds may be given in full to charity. The full gift will then be deductible. In addition, since the 100% deduction applies regardless of the gift source, withdrawals and gifts may also be made from 401(k) plans, 403(b) plans or other qualified retirement plans.

Is the 2005 End of Year Gift different from the IRA Tax-free Rollover?Yes. During the negotiations between the House and Senate, the decision was made to delete the IRA Tax-free Rollover from the Katrina Relief bill. The IRA Tax-free Rollover did not pass. However, as an alternative, the IRA 2005 Gifts provision for cash gifts was then added to the Katrina Relief bill.

Is there a dollar limit?
Good news - the IRA withdrawal and gift option is unlimited. A person can withdraw and give $1,000 or $1,000,000. The gift is limited only by the donor's adjusted gross income.

How should a donor make an IRA Withdrawal-gift?
The IRA owner should withdraw the desired amount this year and make the gift by December 31, 2005. Warning - some IRA custodians take two to three weeks to process withdrawal requests! IRA owners should make the withdrawal request by early December to allow time for processing by the IRA custodian. Donors must have the cash available and complete the cash charitable gift by December 31 to qualify.

With a large IRA withdrawal and then gift, will the donor receive a full deduction?Yes, the withdrawal increases taxable income, and the gift reduces taxable income.

Are other income tax limits affected?
Usually, for higher income taxpayers, 3% of itemized deductions are not allowed. For cash gifts to charity between August 28 and December 31 of 2005, the 3% reduction does not apply to the charitable gift. 100% of the charitable gift is deductible. It appears that the IRS will treat these cash charitable deductions as itemized deductions not subject to the 3% rule.

Will state income taxes be a factor?
Some states do not have income tax, some conform to the federal 50% AGI deduction limit with a five year carry-forward, and some states have less favorable rules for charitable deductions. Most donors will be able to take a state charitable deduction for 50% or more of the IRA gift, and then take the balance on the deduction over the next five years. However, donors should check with their tax advisors to determine the actual effect.

Where to Seek Legal Counsel

2011-04-17T08:53:00.000-07:00

More than likely, you stumbled across this page because you are looking for a specific type of lawyer. Because there is so many different types of lawyers on the web and in your hometown, finding the right one for your needs can be next to impossible. We hope you can take some form of advice from the list given above to determine what type of lawyer would best suit your tastes and needs. That is really the first step.

Once you have figured out what type of lawyer is best for your case, you can work towards hiring one. There are plenty of options on the table for picking a good lawyer. The option that we would recommend above all others is the use of the Internet. Lawyers that take the time to set up websites and make connections with their clients, instead of just plastering a phone number on a park bench, are generally more trustworthy. Do your best to find a lawyer that is out to work for your interests, not the interests of their wallet.

If you have no idea what type of lawyer days you need, we recommend opening up your phone book and looking for legal counsel aid programs. If you live in the southern United States, you may have heard of a company called “1-800-Ask-Gary ” a toll-free lawyer recommendation service. Services like these will advise people in the event of an accident what their next step should be. Because many people don’t have the time to learn all the ins and outs of the wall world and what it is they need to do after an accident, toll-free lawyer recommendation services such as the one mentioned above can be a great help.

Even if you don’t know where to begin seeking legal counsel, calling any law office in your local area, preferably one that you think may have some ability to help you, will yield results. If the law office you call is unable to help your claim, they will forward you to an appropriate office.

How to Become a Lawyer

2011-04-17T08:31:00.000-07:00

How to become a lawyer?

Now that we have all of the different types of lawyers out of the way, what exactly is involved with becoming a lawyer yourself? Obviously the first thing you’re going to have to do is attend law school. The process of getting in to law school and attending law school requires far too much explanation and won’t be covered in this article. If you’re interested in learning more about going to law school, we recommend you do more research. Once you’ve graduated law school, there are many different routes you can take to advance your law career.

The most popular option for new lawyers to take is to get a “internship” at an existing law firm. Newly appointed lawyers will be able to watch experienced colleagues work through cases. It is during these internships that lawyers begin to specialize. Law degrees don’t require any knowledge of specialization, but instead require knowledge of all types of law. It is impossible for a lawyer to learn all of the implications of all laws in the land.

When a lawyer goes to work at a specialty firm, they are choosing to follow a particular path of law that will allow them to fight cases in that area. It may seem foolish to specialize in one specific area of law, but specialization always trumps general knowledge. A general lawyer without much direction isn’t going to have the skills to master any one type of case. Once out of law school, it is best to pick a path and stick to it.

You are interested in becoming a lawyer?

Where And How To Find The Best Lawyer

2011-04-17T07:42:00.000-07:00

Where to Find a Lawyer

We need a lawyer to handle cases that we experience. for the problem we are done with our hope. how do we best get a lawyer? The following tips for finding a good lawyer

The best way to find a lawyer is word of mouth. Ask trusted friends, family, and/or business or professional associates who have recently used one. Then ask if they would use him or her again and if their legal fees were reasonable

Other ways:

Internet legal directories: The Internet is an excellent source for finding attorneys in your community. Because of the interactive nature of the Internet, lawyers and law firms are able to provide much more detailed information to potential clients. For example, Attorney Pages.com allows visitors, for free, to browse through its listings and pick an attorney based on your geographic area and/or type of practice. Many of those listed have websites to give you a broader picture of the attorney’s skills. The site provides complete contact information so you can easily phone or email the attorney with your questions. Using the directory, you can also find a lawyer across the country to handle your college son’s landlord or traffic problem.
Local or state bar association’s referral services: Most bar associations offer referral sources at no charge or for a modest fee. Phone and tell them the problem and they will hook you up with a participating attorney who handles legal problems such as yours. Keep in mind that only a small portion of the legal community signs up and the association generally make no claims as to the attorney’s expertise or skills. For a list of state bar associations, go to http://www.abanet.org/barserv/stlobar.html.
Employer-Paid Legal plans: Many employers, unions and credit unions offer pre-paid legal plans. These plans are given as benefits to employees and may entitle you to free or reduced cost representation on certain matters. You should check with your office administrator about whether you are enrolled in such a plan.
Legal aid: You may qualify for legal aid representation at low-cost/no-cost. Legal aid primarily services low-income individuals and the qualifications for such aid can be based upon where you live, your income and family size. Legal aid representation tends to focus on landlord-tenant issues, credit, utilities, family issues, and unemployment. To find a legal aid office near you, call your state bar , your county court house , or try your local yellow pages under “legal aid,” “legal services,” or “legal assistance.”
Nearby law schools: some have low-cost, no-cost clinics that provide a limited amount of legal services.
Print Directories: For many decades the “Yellow Pages” were the traditional, and well-thumbed, source of listings. However, yellow page listings and/or ads do not give information about lawyer’s ability or competence. Other directories, such as the Martindale-Hubbell Law Directory, found in many public libraries, lists lawyers by state and city and give biographical details on each lawyer and rating information.