The best Business Debt Settlement Companies in Houston know how to fight writs of garnishment in a Harris County Court. Now that Texas voids confessions of judgment, Merchant Cash Advance funders freeze business bank accounts by serving a Writ of Garnishment on your bank. Pick a provider by its skill in fighting garnishments, its speed and its experience with lumpy receivables.
How do funders freeze Houston business bank accounts?
Funders serve the bank with a writ of garnishment, either pre-judgment or post judgment. As of September 1, 2025, a contract for Sales-Based Financing that contains a confession of judgment “or any similar provision is void and unenforceable” under Tex. Fin. Code 398.055. Registration and auto-debit rules are in our Best Business Debt Settlement Companies in Austin guide.
To get a pre-judgment writ, the funder has to sue you and file an affidavit under Texas Civil Practice and Remedies Code 63.001(2) swearing that “the debt is just, due, and unpaid,” that you do not own enough property in this state, subject to execution, to satisfy the debt, and that the garnishment is not sought to injure you. They then need a written order from the judge after a hearing, which can be ex parte (Tex. R. Civ. P. 658). The order can include multiple writs for different counties, freezing accounts at several banks at once. After judgment, the judgment is final for garnishment purposes from the date it was signed unless you file a supersedeas bond (Rule 657).
Even after they serve your bank, the law only requires the funder to serve you “as soon as practicable” (Rule 663a), and your bank has until 10:00am on the first Monday after 20 days from service to answer. The notice only lists exemptions you can claim “if you are an individual (not a company),” so an LLC’s operating account has no exemption process.
What should a Houston provider do once a writ hits?
Ask each candidate what steps they will take to get your money unfrozen quickly, including:
- Filing a Motion to Dissolve or Modify under Rule 664a, which stays further proceedings on the writ and requires the court to rule within 10 days unless there is good cause for an extension.
- Replevying the garnished funds under Rule 664 by posting a bond at any time before judgment, for the amount set by the court or the value of the funds plus one year’s interest.
- Asking the court to let you substitute other property of equal value, like a piece of equipment or a truck.
- Moving to reduce the funder’s bond under Rule 658a if your bank’s answer shows less money than the funder claims; the court can cut it to two times the amount caught.
- Checking whether the funder served your bank at its registered agent address as Financial Code 59.008 requires. If not, the writ “is not effective as to the financial institution.”
Also ask how the funder will prove a “debt is just, due, and unpaid” when a Merchant Cash Advance contract is a purchase of future receivables rather than a loan, and whether your Texas equipment, vehicles, or real estate undercut its no-property affidavit.
Which Harris County court will hear an MCA suit?
It will mostly be determined by the amount of money they are suing you for:
| Court | Civil amount | Harris County detail |
|---|
| Justice Courts | Up to $20,000 | 16 courts in 8 precincts; banks have about 10 days to answer |
| County Civil Courts at Law | More than $500 up to $250,000 | 5 courts plus an Associate Judge Court, 201 Caroline, 5th Floor |
| District courts | No upper limit | Civil Courthouse at 201 Caroline |
| Texas Business Court, Eleventh Division | $5,000,000 or more contract disputes | Covers Harris, Fort Bend, Galveston, Brazoria, Matagorda, and Wharton counties |
| U.S. District Court, Southern District of Texas, Houston Division | More than $75,000 with diversity of citizenship | Federal option when parties are from different states |
Very few suits meet the $5 million threshold of the Business Court, which we discuss in our guide to litigation in Texas for our Dallas readers. More likely, the funder will sue in the county designated in the agreement or the county where the defendant is domiciled under CPRC 15.035(a).
Can a funder enforce a New York judgment in Texas to reach my bank accounts in Houston?
Yes, by filing an authenticated copy of the judgment with the clerk of a Harris County court that has jurisdiction (Tex. Civ. Prac. & Rem. Code § 35.003). The judgment then has the same effect and is subject to the same defenses as a Texas judgment, so your provider needs to be ready to challenge it in Houston.
How can a provider help me negotiate with a funder when my revenue is seasonal or lumpy?
A provider can leverage the timing of your receivables and time a lump sum payment around when they will come in. For Houston HVAC, roofing, construction and oil field service firms, default often starts with a rigid debit that ignores seasonality, which we discuss in our guide to using a reconciliation clause to reduce your payments. Bank statements showing receivables have not arrived help show a damages claim, not a debt that is just, due, and unpaid.
A funder can also contact your operators and general contractors and ask them to send payments to the funder. However, if you have factored your receivables, the funder cannot request redirection of payments due to the factor without the factor’s consent or unless the account was validly assigned to the funder (7 Tex. Admin. Code § 86.312(b)(12)).
Frequently Asked Questions
Can a funder freeze my Houston bank account before it wins a lawsuit?
Yes, through a prejudgment writ of garnishment, after suing, swearing the debt is just, due, and unpaid and that you lack enough Texas property, getting a Rule 658 order, and filing a bond.
Does the Texas exemption process apply to my business accounts?
No, the Rule 663a exemption language applies only to individuals, so an LLC or corporation cannot use it for an operating account. Sole proprietors and personal guarantors can exempt personal accounts under Rule 679b.
If my bank accounts in Harris County are frozen, how quickly can I get my money back?
A sworn motion to dissolve under Rule 664a stays proceedings on the writ, and the court must decide it within ten days unless extended for good cause. You may also replevy by bond or substitute property such as equipment of equal value.
Can a funder with a New York forum clause still reach my Houston accounts?
Yes, it can file an authenticated copy of its New York judgment with a Harris County court under CPRC 35.003 and then garnish your accounts post-judgment.