Hindering secured creditors is a criminal offense under Penal Code § 32.33. Selling, concealing, destroying, or moving property that secures a loan — with intent to defeat the lender’s lien — is graded by the value involved, from a Class C misdemeanor to a first-degree felony. Below: the statute text, the full value ladder, the civil-versus-criminal line, defense strategies, and what to expect after a charge in Collin, Dallas, Denton, or Tarrant County.
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Published 2026-07-05 · Reviewed by Reggie London and Njeri London, Co-Founding Partners · Last reviewed: 2026-07-05
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Controlling statute:Texas Penal Code § 32.33 Classification: Class C misdemeanor through first-degree felony, graded by the value of the property or proceeds Punishment range: fine up to $500 at the bottom bracket (under $100); 5–99 years or life in TDCJ plus a fine up to $10,000 at $300,000 or more
The controlling statute
Texas Penal Code § 32.33 sits in Chapter 32 — the fraud chapter — and protects a specific commercial relationship: the secured loan. Subsection (b) states the core offense: “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.”
The statute defines its own reach. Under § 32.33(a)(2), a “security interest” is an interest in personal property or fixtures that secures payment or performance of an obligation — the lien a lender takes on a financed truck, a tractor, restaurant equipment, or business inventory. Under § 32.33(a)(1), “remove” carries a narrower meaning than everyday speech: transporting the property, without the secured party’s effective consent, out of the state where it was located when the security interest attached. Driving a financed car to another county is not statutory removal; hauling mortgaged equipment to Oklahoma without the lender’s consent can be.
Subsection (e) creates a second, distinct offense aimed at sale-out-of-trust scenarios. A debtor who does not have a right to sell or dispose of the collateral — or who is required to account to the secured party for the proceeds of a permitted sale — commits an offense by selling or otherwise disposing of the property, or by failing to account for the proceeds, with intent to appropriate them. “Appropriate” borrows its definition from the theft chapter, Penal Code Chapter 31.
Section 32.33 has been part of the Penal Code since 1974, but its current punishment brackets date to House Bill 1396 (84th Legislature), effective September 1, 2015, which raised every dollar threshold in the ladder. Materials published before 2015 still describe a $1,500 felony line; the felony line today is $2,500. Checking which version of the ladder a charging instrument tracks is an early, easy defense audit.
Classification & punishment range
Both § 32.33 offenses use the same seven-step value ladder, set out in subsections (d) and (e). For the subsection (b) offense, the measure is the value of the property destroyed, removed, concealed, encumbered, or otherwise harmed; for the subsection (e) offense, it is the value of the proceeds obtained from the sale or disposition. Confinement and fine ceilings come from Penal Code Chapter 12.
Value ladder — Texas Penal Code § 32.33(d), (e)
Value of property or proceeds
Classification
Confinement
Maximum fine
Less than $100
Class C misdemeanor
None (fine only)
$500
$100 to less than $750
Class B misdemeanor
Up to 180 days, county jail
$2,000
$750 to less than $2,500
Class A misdemeanor
Up to 1 year, county jail
$4,000
$2,500 to less than $30,000
State jail felony
180 days to 2 years, state jail
$10,000
$30,000 to less than $150,000
Third-degree felony
2 to 10 years, TDCJ
$10,000
$150,000 to less than $300,000
Second-degree felony
2 to 20 years, TDCJ
$10,000
$300,000 or more
First-degree felony
5 to 99 years or life, TDCJ
$10,000
Confinement and fine ceilings per Texas Penal Code §§ 12.21–12.35. Brackets verified against § 32.33 as amended by HB 1396 (2015). Last verified 2026-07-05.
Two grading rules deserve attention. First, “value” is measured under Penal Code § 32.02 — generally fair market value at the time and place of the offense — so the lender’s payoff figure is not automatically the grading number. A five-year-old work truck with 180,000 miles may grade two brackets below its original note. Second, § 32.03 permits aggregation: when amounts are obtained in violation of Chapter 32 pursuant to one scheme or continuing course of conduct, the State may treat the conduct as one offense and add the amounts together in determining the grade. A series of equipment sales out of trust can therefore be indicted as a single second-degree felony rather than several state jail felonies.
Elements the State must prove
To convict under § 32.33(b), the State must prove each element beyond a reasonable doubt:
1. A signed security agreement, mortgage, or deed of trust
The defendant personally signed the instrument creating the security interest or lien. An unsigned draft, a forged signature, or an instrument signed only by a co-borrower breaks this element.
2. A security interest or lien covering the property at issue
The interest must actually attach to the specific property alleged. Disputes over substituted collateral, after-acquired property clauses, and previously released liens live here.
3. A prohibited act
Destroying, removing (out of state, as defined), concealing, encumbering, or otherwise harming or reducing the value of the collateral.
4. Intent to hinder enforcement
The act must be done for the purpose of defeating the secured party’s enforcement of its interest or lien — the mental state that separates a defaulting borrower from a criminal defendant.
The subsection (e) offense has its own structure: (1) the defendant was a debtor under a security agreement; (2) the defendant either had no right to sell or dispose of the collateral or was required to account to the secured party for proceeds of a permitted sale; (3) the defendant sold or disposed of the property, or failed to account for the proceeds as required; and (4) the defendant acted with intent to appropriate the proceeds or the value of the collateral.
When does a debt dispute become a crime?
Falling behind on a secured loan is a civil default, not an offense. Texas law already gives the lender civil remedies — self-help repossession without breach of the peace under Business & Commerce Code § 9.609, sequestration, and a deficiency suit. Nothing in § 32.33 criminalizes owing money, missing payments, or losing collateral value to depreciation, accident, or ordinary wear.
The statute reaches conduct aimed at the lien itself. Three fact patterns generate most Dallas–Fort Worth filings:
Selling a financed vehicle without paying off the lien. Consider a hypothetical: a borrower six payments behind lists his financed pickup online, signs over a duplicate title, pockets $18,000 from the buyer, and stops answering the finance company. That is a textbook § 32.33(e) referral — and at $18,000 in proceeds, a state jail felony bracket.
Hiding collateral from repossession. Moving the car into a relative’s locked garage, storing equipment at an unlisted job site, or repeatedly relocating the collateral after demand letters invites a concealment allegation under subsection (b).
Equipment- and inventory-financing breakdowns. Contractors and dealers who sell financed machinery or floor-planned inventory and use the proceeds for payroll or other debts face sale-out-of-trust allegations — even where the relationship began lawfully and the shortfall grew out of a cash-flow collapse rather than a plan to cheat anyone.
The line, in every variation, is the mental state. A genuine dispute over the accounting, a believed right to sell, or a lender that knew about and tolerated the practice points toward the civil courthouse, not the criminal one. Defense counsel’s first task is often persuading a prosecutor that the file they received from a lender’s recovery department is a collection dispute wearing a criminal caption.
How do prosecutors prove intent to hinder?
Intent is rarely proved with a confession. Prosecutors build it from the paper trail: the security agreement, the payment history, demand letters, title and registration records, sale paperwork, and what the borrower said to the lender’s recovery department. Timing matters — a transfer made days after a repossession call reads very differently from one made months earlier in the ordinary course of business.
The Legislature also gave the State two statutory presumptions:
The default-plus-demand presumption — § 32.33(c). Intent to hinder enforcement is presumed if, when any part of the secured debt was due, the debtor failed to pay the part then due and, after the secured party’s demand, failed to deliver possession of the collateral.
The 11-day accounting presumption — § 32.33(e). Intent to appropriate proceeds is presumed if the debtor does not deliver the proceeds or account for them before the 11th day after the secured party’s lawful demand.
These presumptions are powerful but not conclusive. Under Penal Code § 2.05, a statutory presumption is permissive: the jury must be told it may — not must — infer the element, that the underlying facts must themselves be proved beyond a reasonable doubt, and that the State keeps the full burden on every element. Defense work therefore concentrates on the predicate facts: Was a payment actually due under the contract? Was a demand made, and was it lawful? Did the borrower attempt delivery or an accounting that the lender ignored or refused?
Defense strategies
Defense of a § 32.33 case starts with the loan file and ends with the mental state. Strategies L and L Law Group evaluates in these cases include:
No intent to hinder or appropriate. The heart of both subsections. Continued payments after the alleged act, open communication with the lender, disclosed locations, and partial remittances all cut against a purpose of defeating the lien.
Effective consent by the secured party. A lender that authorized the sale, accepted the arrangement over time, or waived its rights in writing removes the wrongfulness the statute targets. Course-of-dealing evidence is often decisive in dealer and equipment cases.
A right to sell under the agreement. Floor-plan and inventory financing typically authorizes sales in the ordinary course of business. Subsection (e) applies only where the debtor had no right to sell or was required to account — so the security agreement’s own text can defeat the charge.
No signed instrument. Subsection (b) requires that the defendant personally signed the security agreement, mortgage, or deed of trust. Forgery disputes, spouse-only signatures, and entity-versus-individual signature questions all matter.
Lien and collateral disputes. A released lien, substituted collateral, or property outside the instrument’s description means no offense as to that property.
Value and grading contests. Fair-market-value evidence under § 32.02 — condition, mileage, depreciation, auction comparables — can move a case down the ladder, sometimes across the felony–misdemeanor line at $2,500.
Defective demand. Both statutory presumptions depend on a demand — and subsection (e)’s on a lawful demand. A demand sent to a stale address, by an entity that no longer held the note, or before default undercuts the presumption’s predicate.
Accounting actually made. Proof that proceeds were delivered, escrowed, or accounted for — even imperfectly — rebuts the appropriation theory.
A second hypothetical shows how these interact: a landscaping company sells a financed skid steer after a dealer representative verbally approves a trade-up, and the payoff check crosses in the mail with the default notice. On those facts, consent, right-to-sell, and intent are all genuinely contested — the kind of case that should be worked toward reduction or dismissal rather than pleaded at the first setting.
Enhancements & collateral consequences
Aggregation under § 32.03 is the grading feature to watch. Because amounts obtained “pursuant to one scheme or continuing course of conduct” may be combined, a pattern of transactions — several vehicles, multiple pieces of equipment, months of unremitted proceeds — can jump the case several brackets up the ladder. Prior felony convictions can raise the range further under the repeat and habitual felony rules of Penal Code § 12.42 and § 12.425. In the other direction, a state-jail-felony charge can in some cases be punished as a Class A misdemeanor under Penal Code § 12.44 — a posture that surfaces often in restitution-driven negotiations.
Collateral consequences track the offense’s fraud character. A § 32.33 conviction reads as a dishonesty offense to licensing boards, banks, sureties, and employers running background checks; professionals in finance, insurance, real estate, and other regulated fields should expect reporting and fitness questions. For non-citizens, offenses involving fraud or deceit can carry serious immigration consequences — where the loss to the victim exceeds $10,000, federal law can treat the conviction as an aggravated felony under 8 U.S.C. § 1101(a)(43)(M)(i), depending on the record of conviction. Any felony conviction triggers the firearm prohibitions of Texas Penal Code § 46.04 and 18 U.S.C. § 922(g). And the criminal case rarely travels alone: the creditor’s conversion suit, a deficiency claim, and contract attorney’s fees are common companions, with restitution under Code of Criminal Procedure article 42.037 available in the criminal judgment itself.
What happens after a § 32.33 charge in Collin, Dallas, Denton, or Tarrant County?
These cases usually begin with the lender, not a traffic stop. The finance company’s recovery department assembles the loan file, demand letters, and title history and presents a packet to a police financial-crimes unit or directly to the district attorney’s intake division. Some cases arrive by arrest warrant; many begin with a summons or a grand jury referral, which means there is often a window — before charges are filed — in which defense counsel can present the other side of the file.
The filing court depends on the grade. Class B and Class A misdemeanor brackets are filed in the county courts at law; state jail felonies and above are indicted in the district courts. In Collin County that means the courts at the Collin County Courthouse (the Russell A. Steindam Courts Building) in McKinney. Dallas County felony dockets run through the Frank Crowley Courts Building. Tarrant County cases are heard at the Tim Curry Criminal Justice Center in Fort Worth, and Denton County cases at the Denton County Courts Building.
The procedural spine is the same across the region: arrest or summons, magistration and bond, indictment (felony) or information (misdemeanor), discovery under Code of Criminal Procedure article 39.14 — here, the loan file, demand correspondence, title records, and any recorded collection calls — then pretrial motions, negotiation, and dismissal, plea, or trial. Because the complaining witness is a commercial lender with a parallel financial interest, defense counsel can often engage the creditor directly about the collateral or a payoff while the criminal case is pending. That contact takes care: repayment discussions handled badly can be recast as admissions, which is one more reason they should run through counsel.
Can the charge be dismissed or cleared from your record?
Restitution posture drives many § 32.33 resolutions. Paying off the lien, surrendering the collateral, or completing an accounting does not undo the offense — the crime is complete when the act and intent coincide — but it removes the loss that gives the case its urgency. Code of Criminal Procedure article 42.037 authorizes restitution as part of the sentence, and county fraud dockets routinely weigh a made-whole creditor in charging and plea decisions. No outcome can be promised; the point is that the financial dimension of this offense is negotiable in ways many charges are not.
Record relief follows the usual Texas rules. An arrest that ends in acquittal, dismissal, or a declined prosecution can qualify for expunction. A case resolved by deferred adjudication can support an order of nondisclosure under Government Code Chapter 411, Subchapter E-1, after the applicable waiting period and subject to its disqualifiers. A final conviction — including a state jail conviction — cannot be expunged, which is a substantial reason to litigate charge selection and disposition early rather than after the plea.
How is § 32.33 different from theft and related fraud offenses?
Prosecutors choose among several overlapping statutes in collateral cases, and the choice changes what the State must prove:
Theft — § 31.03. Theft punishes unlawfully appropriating property that belongs to someone else. In a § 32.33 case the defendant typically owns the collateral — the crime targets defeating the lien, not taking the thing. When the State believes the loan itself was obtained dishonestly, theft or false-statement theories may appear instead of, or alongside, § 32.33.
Misapplication of Fiduciary Property — § 32.45. Reaches property held as a fiduciary or for a financial institution and dealt with contrary to the agreement. Sale-out-of-trust facts sometimes draw a § 32.45 count where the paperwork casts the debtor as holding proceeds in trust.
Fraudulent Securing of Document Execution — § 32.46. Targets deception that causes another person to sign or execute a document affecting property or financial interests — the charge for a falsified payoff letter or title document, as distinct from harming the collateral itself.
Fraudulent Transfer of a Motor Vehicle — § 32.34. A vehicle-specific statute covering transfers of a motor vehicle known to be subject to a security interest, in circumstances the section spells out. Some vehicle cases are filed under § 32.34, § 32.33, or both.
All of these sit inside our white-collar and fraud defense practice, where the defense file is built from the same instruments — notes, security agreements, titles, ledgers — the State will use.
Key Legal Terms
Security Interest (§ 32.33(a)(2))
An interest in personal property or fixtures that secures payment or performance of an obligation — the lien behind auto loans, equipment financing, and inventory (floor-plan) lines.
“Remove” (§ 32.33(a)(1))
Transporting the property, without the secured party’s effective consent, out of the state where it was located when the security interest or lien attached — narrower than the everyday word.
Appropriate (Chapter 31)
To acquire or otherwise exercise control over property; § 32.33(e) borrows this theft-chapter definition for its intent element.
Presumption of Intent (§ 32.33(c))
Nonpayment of a part of the debt then due, plus failure to deliver the collateral after demand, permits — but does not require — the jury to infer intent to hinder (see Penal Code § 2.05).
11-Day Accounting Window (§ 32.33(e))
Intent to appropriate proceeds is presumed if the debtor has not delivered or accounted for them before the 11th day after the secured party’s lawful demand.
State Jail Felony
The felony grade covering § 32.33 values from $2,500 to just under $30,000 — 180 days to 2 years in a state jail facility and a fine up to $10,000.
Frequently Asked Questions
Is it illegal to sell a financed car in Texas?
Not by itself — the sale becomes criminal only in defined circumstances. Under Penal Code § 32.33(e), a debtor commits an offense by selling secured property the debtor has no right to sell, or by failing to account to the lienholder for proceeds of a permitted sale, with intent to appropriate the money. Paying off the lien at closing is the lawful, routine path.
What is the punishment for hindering secured creditors in Texas?
Punishment tracks the value of the property or proceeds involved. Less than $100 is a Class C misdemeanor (fine only); $2,500 to less than $30,000 is a state jail felony (180 days to 2 years); $300,000 or more is a first-degree felony (5 to 99 years or life). The full seven-step ladder appears in the table on this page.
Can I go to jail for hiding my car from the repo company?
Concealing collateral with intent to hinder the lender's enforcement is an offense under § 32.33(b), and jail exposure depends on the vehicle's value. Section 32.33(c) adds a presumption of that intent when a payment was due and unpaid and the debtor failed to deliver the vehicle after the lender's demand — a presumption the defense can contest under Penal Code § 2.05.
Is hindering secured creditors a felony or a misdemeanor?
It can be either — the value of the property controls. The offense begins as a Class C misdemeanor under $100 and crosses the felony line at $2,500. Because most financed vehicles and equipment are worth more than $2,500, real-world § 32.33 charges are commonly filed as state jail felonies or higher.
What does “intent to hinder enforcement” mean?
It means the State must prove you acted for the purpose of defeating the secured party's ability to enforce its lien — not merely that you moved, used, or damaged the property. Intent is usually litigated through payment history, communications with the lender, the timing of any transfer, and what happened after a demand.
What if the lender consented to the sale?
Effective consent by the secured party defeats the charge. Equipment dealers and floor-plan borrowers often have authority to sell inventory in the ordinary course of business, subject to a duty to remit proceeds. The security agreement's own terms, written approvals, and course-of-dealing evidence become central defense exhibits.
Do I have to turn over the money from selling collateral?
If the security agreement permits a sale but requires an accounting, § 32.33(e) makes it an offense to keep the proceeds with intent to appropriate them. The statute presumes that intent when the debtor has not delivered or accounted for the proceeds before the 11th day after the secured party's lawful demand.
Is moving financed equipment to another state a crime?
It can be. Section 32.33(a)(1) defines “remove” as transporting the property, without the secured party's effective consent, out of the state where it was located when the security interest attached. Moving collateral across town is not statutory “removal,” although the State may still allege concealment on different facts.
Will paying off the debt get the charge dismissed?
Payment does not automatically end a prosecution — the offense is complete when the prohibited act and intent coincide. That said, restitution is expressly authorized by Code of Criminal Procedure article 42.037, and making the creditor whole is often a central topic in resolving fraud-docket cases. Outcomes depend on the facts, the county, and your record.
Can a hindering secured creditors case be expunged in Texas?
An arrest that ends in acquittal, dismissal, or a declined prosecution may qualify for expunction under Texas law. A case resolved by deferred adjudication may instead support an order of nondisclosure under Government Code Chapter 411, Subchapter E-1, after the applicable waiting period. A final conviction cannot be expunged.
Reggie London co-founded L and L Law Group with a focus on federal criminal defense, complex felony defense, and TEA/SBEC matters. Licensed in Texas, admitted to TXND and TXED.
Njeri London co-founded L and L Law Group with a focus on DWI defense, family violence cases, and juvenile defense. Licensed in Texas, admitted to TXND and TXED.
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