The best companies know the Bexar County courts where you could be sued well enough to answer a lawsuit there on time, and they know what a funder can and cannot go after in Texas if it gets a judgment against you on your personal guaranty.
Most owners go looking for help after a collection company tells them the funder is going to come after them personally. What follows turns on the amount and whether your spouse signed. For the statewide picture, see our article on the best business debt settlement companies in Texas.
Which Bexar County court will hear an MCA or guaranty suit?
The amount in controversy decides it. For small amounts or broker’s fees, the funder can take you to justice court for up to $20,000.00 not including interest under Section 27.031 of the Texas Government Code. Above $500.00, the county courts at law and district courts in Bexar County have concurrent jurisdiction up to $250,000.00 under Section 25.0003. The biggest cases go to a Bexar County District Court.
Where a Texas suit can be filed, by amount
| Type of Court | Amount in Controversy |
|---|
| Justice Court | Up to $20,000, not including interest |
| County Court at Law | Over $500 up to $250,000 (concurrent jurisdiction with district courts) |
| District Court | No monetary cap on amount |
| Texas Business Court, Fourth Division | $5,000,000 for most commercial cases, but any amount where a publicly traded company is a party |
Most funder contracts pick New York law and a New York forum, but you should still have a provider with a lawyer who can appear in court for you in San Antonio.
Does the San Antonio division of the Texas Business Court matter?
The Fourth Division sits in San Antonio and covers the 22 counties in the 4th Administrative Judicial Region, including Bexar, Webb and Victoria, under Section 25A.003 of the Texas Government Code. According to the Texas Business Court’s website, only two judges sit there. It hears most commercial cases only at $5,000,000.00 or more under Section 25A.004, unless a publicly traded company is a party.
What can the funders go after in San Antonio if they get a judgment against you for your personal guaranty?
The funders can’t go after your homestead, current wages, and retirement accounts, but they can go after your money in the bank, your receivables, and any real estate you own that is not your homestead.
- Homestead. Texas protects an urban homestead up to ten acres with no cap on its value, and it can include land used as both your home and “a place to exercise a calling or business” (Property Code 41.002). The judgment lien cannot attach to it (52.001), and if you file a homestead affidavit, the lien is purged of record unless the creditor files a sworn statement contradicting it within 30 days (52.0012).
- Personal property and wages. Up to $100,000.00 of personal property for a family (or $50,000.00 for a single adult) is exempt under Property Code 42.001, along with all current wages for personal services and unpaid commissions up to 25% of that limit.
- Retirement accounts. Your 401k, IRA, Roth IRA, HSA and 529 are exempt with no cap under 42.0021, and the court cannot order you to turn over exempt property or its proceeds (CPRC 31.002).
A rented duplex, a second lot, business equipment beyond the aggregate cap and your operating account balance are exposed. If the business pays you by distributions instead of a wage, ask counsel whether you count as a wage earner for that exemption. On whether the guarantee holds up at all, see is a personal guarantee on an MCA enforceable.
What should a provider do when a funder threatens you personally?
Have your provider determine what assets are and are not exempt. Answer any suit brought in Bexar County. File a homestead affidavit if a lien is put on your home. Get the personal guarantee released in writing as part of any settlement. Determine if your spouse also signed. If not, under Tex. Fam. Code 3.202 your spouse’s separate property and community property your spouse manages solely is likely not subject to the debt, but community property you manage jointly may be.
Do not follow any provider who suggests you transfer assets to relatives or others to avoid the judgment. Under the Texas fraudulent transfer statute, a transfer to an insider or after being threatened with suit is a badge of fraud (Tex. Bus. & Com. Code 24.005), and you may find yourself with a second suit.
Read any settlement or payment modification carefully before signing. Texas prohibits a confession of judgment only in an instrument signed before suit is brought (Tex. Civ. Prac. & Rem. Code 30.001), so a document you sign after being sued in Bexar County could include a personal judgment against you. Your provider should remove that provision.
Learn the rules funders must follow under the 2025 Texas sales-based financing law. It voids confession of judgment clauses, restricts automatic debits unless the funder perfects a first-priority security interest in the account, and requires funders to register through the NMLS by December 31, 2026. Our guide to the best business debt settlement companies in Austin explains how to check registration.
Frequently Asked Questions
Can the funder take my house in San Antonio because I signed a personal guarantee?
No. Even with a guaranty judgment, the funder cannot force the sale of a Texas homestead. An abstract of judgment filed in Bexar County places a lien on your real property, but not on exempt real property. File a homestead affidavit and mail it to the creditor, which then has 30 days to file an affidavit contradicting it.
My spouse didn't sign the guarantee. Is our property at risk?
Probably not. Under Tex. Fam. Code 3.202, your spouse's separate property and community property your spouse manages solely is generally not subject to a breach of contract claim, but community property you both manage jointly is.
Should I cash out my IRA to pay the funder?
Be very cautious. 401ks, IRAs, Roth IRAs, HSAs and 529 plans are exempt under Texas law with no dollar limit, but a distribution is only exempt for 60 days unless you roll it over into another exempt account.
Can the funder file a confession of judgment against me in Texas?
No. Texas law prohibits confessing a judgment in an instrument signed before suit, and under Texas Finance Code Chapter 398, a confession of judgment in a commercial sales-based financing contract is void. New York also now bars filing a confession of judgment against an out-of-state debtor.