Hindering a Secured Creditor in Texas

Dealing with debt collectors in Texas can be a stressful situation. Creditors may demand that payments be made and, if the payments are not submitted on time, the creditors may threaten to repossess a person’s property. In the United States, failure to repay a debt is not a crime. This means that a person cannot be charged, arrested or jailed if they are unable to repay a debt.

However, in certain cases, a Texas resident who owes a debt may find themselves facing a charge of hindering a secured creditor. Many people may have never heard of this offense and could be confused when they find out that they have been charged with it. Finding out exactly what this crime involves can help people understand how to handle this charge.

What Is Hindering a Secured Creditor?

To understand this criminal charge, it’s helpful to define some terms. First, a “creditor” is a person who makes a loan or provides credit to someone in exchange for the promise of repayment. “Secured” refers to the creditor’s legal interest in the loan itself or the property that the loan was used to purchase. “Hindering” means to prevent, obstruct or stop. Essentially, hindering a secured creditor means to prevent a person or agency who made a loan from repossessing property after the loan is not repaid.

Section 32.33 of the Texas Penal Code states that a person who intends to prevent the repossession of property “destroys, removes, conceals, encumbers, or otherwise harms or reduces the value of the property” may be charged with hindering a secured creditor. In order to convict someone of this charge, intent must be proven. According to the law, a person has intent to commit this offense if they damage or remove the property:

• After they failed to repay the loan

AND

• After the creditor demanded that the property be returned

For example, suppose that David got a bank loan to buy a car. He was unable to keep up with the payments so the bank demanded the he turn over the car to them. David then drives the car to his brother’s house in another state so that the repo men can’t find it. David may be charged with hindering a secured creditor.

However, it is not against the law to refuse to turn over property to a creditor when they demand it. It is only a crime to actually prevent the repossession of the property or to destroy the value of the property when a creditor demands that the property be returned.

The Purpose of the Law

This law is intended to protect creditors who make loans to people. It is common for people to default on loans if they are short on money or if they lose their job. When this occurs, the agency who made the loan will lose money unless they can repossess the property. If a person damages the property so that its value is lowered or conceals the property so that it can’t be repossessed, then the loan agency can’t make their money back. This law attempts to give banks and loan agencies some extra protection.

Possible Legal Penalties

Like most criminal offenses involving valuable property, the potential punishments for hindering a secured creditor can vary based on the value of the property involved in the case. For example, a person who prevents a creditor from repossessing a car may be punished more severely than a person who prevents the repossession of a lawn mower.

Some of the potential penalties include:

• Conviction on a Class C misdemeanor and a fine of up to $500 for property worth less than $20
• Conviction on a Class A misdemeanor and up to one year in jail if the property was worth between $500 and $1500
• Conviction on a state jail felony charge and up to two years in jail for property that was worth between $1500 and $20,000
• Conviction on a first degree felony charge and up to 99 years in prison for property that was worth $200,000 or more

Legal Defenses

Hiring a defense attorney is the best way to fight a charge of hindering a secured creditor. If the case goes to court, the attorney might try to introduce evidence to show that the defendant did not intend to hinder the creditor. In order to get a conviction, the prosecution must prove that the defendant actively took steps to damage, destroy, conceal or remove the property. It’s not a crime to merely refuse to turn over the property when the creditor demands it.

If the attorney can show that the defendant did not actively try to reduce the value of the property or prevent repossession, the charges may be dropped or reduced.

Have you been charged with hindering a secured creditor? Contact the law office of Rand Mintzer today. We will fight hard to protect your rights and future. Call (713) 862-8880 or email for a free, confidential consultation.

Photo Frank | Used under Creative Commons image attribution license 2.0