Hindering Secured Creditors Law and Legal Definition

Hindering Secured Creditors means to destroy, remove, or otherwise harm the value of a property with the intent to hinder enforcement of a security interest held by another on that property. A security interest is a type of property interest that is given to one party by another party as collateral for the performance of an obligation. For example, hiding a vehicle in order to avoid repossession, vandalizing a house prior that is subject to a foreclosure proceeding and selling financed property without paying the lienholder all amounts to causing hindrance.

There are state specific laws on hindering secured creditors. For example, hindering a secured creditor is a criminal offense per Texas Penal Code 32.33. The relevant law as it appears in the statute:

§ 32.33. Hindering Secured Creditors

(a) For purposes of this section:

(1) "Remove" means transport, without the effective consent of the secured party, from the state in which the property was located when the security interest or lien attached.

(2) "Security interest" means an interest in personal property or fixtures that secures payment or performance of an obligation.

(b) A person who has signed a security agreement creating a security interest in property or a mortgage or deed of trust creating a lien on property commits an offense if, with intent to hinder enforcement of that interest or lien, he destroys, removes, conceals, encumbers, or otherwise harms or reduces the value of the property.

(c) For purposes of this section, a person is presumed to have intended to hinder enforcement of the security interest or lien if, when any part of the debt secured by the security interest or lien was due, he failed:

(1) to pay the part then due; and

(2) if the secured party had made demand, to deliver possession of the secured property to the secured party.

(d) An offense under Subsection (b) is a:

(1) Class C misdemeanor if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is less than $ 20;

(2) Class B misdemeanor if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is $ 20 or more but less than $ 500;

(3) Class A misdemeanor if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is $ 500 or more but less than $ 1,500;

(4) state jail felony if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is $ 1,500 or more but less than $ 20,000;

(5) felony of the third degree if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is $ 20,000 or more but less than $ 100,000;

(6) felony of the second degree if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is $ 100,000 or more but less than $ 200,000; or

(7) felony of the first degree if the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed or reduced in value is $ 200,000 or more.

(e) A person who is a debtor under a security agreement, and who does not have a right to sell or dispose of the secured property or is required to account to the secured party for the proceeds of a permitted sale or disposition, commits an offense if the person sells or otherwise disposes of the secured property, or does not account to the secured party for the proceeds of a sale or other disposition as required, with intent to appropriate (as defined in Chapter 31) the proceeds or value of the secured property. A person is presumed to have intended to appropriate proceeds if the person does not deliver the proceeds to the secured party or account to the secured party for the proceeds before the 11th day after the day that the secured party makes a lawful demand for the proceeds or account. An offense under this subsection is:

(1) a Class C misdemeanor if the proceeds obtained from the sale or other disposition are money or goods having a value of less than $ 20;

(2) a Class B misdemeanor if the proceeds obtained from the sale or other disposition are money or goods having a value of $ 20 or more but less than $ 500;

(3) a Class A misdemeanor if the proceeds obtained from the sale or other disposition are money or goods having a value of $ 500 or more but less than $ 1,500;

(4) a state jail felony if the proceeds obtained from the sale or other disposition are money or goods having a value of $ 1,500 or more but less than $ 20,000;

(5) a felony of the third degree if the proceeds obtained from the sale or other disposition are money or goods having a value of $ 20,000 or more but less than $ 100,000;

(6) a felony of the second degree if the proceeds obtained from the sale or other disposition are money or goods having a value of $ 100,000 or more but less than $ 200,000; or

(7) a felony of the first degree if the proceeds obtained from the sale or other disposition are money or goods having a value of $ 200,000 or more. [Tex. Penal Code § 32.33]