Can Your Wages Be Garnished in Texas?
Most creditors cannot garnish your wages if you live in the state of Texas. Texas is one of the only four states that exempt 100 percent of a debtor's income from wage garnishment. The other three states are North Carolina, South Carolina and Pennsylvania. However, wages can be garnished in Texas under certain limited circumstances.
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Wage Garnishment
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Wage garnishment is a debt collection method most often used by unsecured creditors. Secured creditors, like car loan companies and mortgage lenders, often resort to repossession and foreclosure to satisfy unpaid debts. Assets like cars and houses act as collateral for loans giving secured creditors protections in the event a borrower defaults (or stops making payments). Unsecured creditors only have the debtor's promise to pay, typically evidenced by the debtor's signature. If the debtor breaks that promise, the creditor may go after other assets like wages.
Significance
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Wage garnishment is significant because it allows a debtor's employer to withhold portions of a debtor's paycheck and give that money to a creditor to help satisfy a delinquent debt. Individuals faced with wage garnishment often have serious financial problems and wage garnishment will only exacerbate the individual's financial problems because it reduces their take-home income.
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Consumer Debt
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Texas exempts 100 percent of all debtors' income from wage garnishment relating to consumer debt. That means credit card companies, mortgage lenders and basically all private financial institutions cannot garnish wages in Texas.
Taxes
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Limitations on garnishments do not apply to delinquent taxes. That means the Internal Revenue Service and the Texas Comptroller (the state taxing authority) can garnish wages for unpaid federal and state taxes, respectively.
Child Support
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Texas laws permit wage garnishment for child support. In fact, the state of Texas garnishes all child support payments from a noncustodial parent regardless of whether that parent can make timely payments. In other words, the noncustodial parent does not have to stop making payments to get wages garnished. All child support owed get garnished from the noncustodial parent's wages once a court order goes into effect.
Student Loans
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Like the IRS, the Department of Education can garnish a delinquent borrower's wages for unpaid federal student loans. In addition, the Department of Education can garnish wages through an administrative process without going to court.
Warning
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Contact a qualified attorney licensed to practice in Texas to find out what rights and obligations you may have with regard to wage garnishment laws.
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References
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