ExecutionDuties and Liabilities of Third Persons After Levy
Section § 701.010
When property is seized under a writ of execution, a third person holding the debtor's property or money must either hand it over or explain if they have a lawful reason not to. If they don't dispute the claim or have a higher claim than the creditor, they must pay what's due to the creditor. The third person must also sign any necessary papers to transfer the property. 'Good cause' for not complying includes not knowing about the seizure.
Section § 701.020
If someone other than the person who owes money is supposed to hand over property or make payments to a court-appointed officer and they don't do it without a valid reason, they could owe the creditor either the value of the debtor's interest in the property or whatever is less between that and the judgment amount. Their liability stops when the property is delivered, the property is released, or the judgment is settled. If found liable, the court might make the third party cover the creditor's costs and attorney fees for proving this liability.
Section § 701.030
This law section discusses the procedures for a "garnishee's memorandum" during a levy, which is when a creditor tries to collect a debt. When a third person, like a bank, receives legal papers about a debt, they must give the officer handling the levy details about the debtor's property or money they hold. This must be done within 10 days and be under oath. The third person must describe any relevant property or obligations involving the debtor, explain why certain items weren't delivered, and acknowledge any claims by others. If they don't comply or provide full information, they might have to cover legal costs. Exceptions include full compliance with a levy by financial institutions, or if all property and payments are delivered. The memorandum can also be sent electronically.
Section § 701.035
Section § 701.040
This law explains what happens when a piece of property that has been levied (or legally seized to satisfy a debt) is also subject to another claim known as a security interest. If the security interest was in place before the levy, it usually takes priority, unless a court decides otherwise. In such a case, the holder of the security interest can enforce it without worrying about the levy, unless the property is already with the officer in charge of the levy. However, if the levy has priority, the security holder must give any money they received from the property back to the judgment creditor to cover their claim. Once the secured claim is satisfied, any remaining property or proceeds must be handed over to the officer handling the levy, unless directed otherwise by a court or the officer.
Section § 701.050
This law explains what an account debtor must do when they receive a notice that a debt they owe is subject to a legal claim (called a levy). If they owe money directly to the person with the debt, they need to start making payments directly to the officer in charge of the levy (known as the levying officer), unless they are told otherwise by a court or that officer. If they were paying someone else on behalf of the person with the debt, they should keep doing that until told otherwise. If they have been returning goods to the debtor, they should instead give them to the levying officer, unless instructed differently by a court or the officer.
Section § 701.060
This law says that if an officer is in charge of collecting a debt and has taken possession of a document proving the debt, the person who owes the money (the obligor) must make payments directly to the officer. If the obligor pays someone else after being notified of this collection, it doesn't count toward their debt.
Section § 701.070
When someone owes money from a court judgment and their assets are being seized or 'levied upon', they must pay the money directly to the officer handling the levy. If they pay anyone else after they've been told about the levy, it doesn't count, and they still owe the money.