What Are the State of Texas Regulations on Wage Garnishment?

Federal law restricts the amount an employer can garnish from a debtor’s pay to satisfy a wage garnishment; however, the decision regarding whether creditors can garnish wages is up to state law. Further, many states set their own limit on the amount that can be garnished. Texas is one of the few states that do not allow ordinary wage garnishments.

General Criteria

An ordinary wage garnishment is one that a creditor initiates, such as for delinquent credit cards and medical bills. Normally, a wage garnishment process requires the creditor to file a lawsuit against the debtor, obtain a judgment from the court, then apply for a wage garnishment with the said court. Since Texas does not allow ordinary wage garnishments, a Texas creditor can seek judgment from the local court and enforce it via other methods, such as a bank account garnishment. Further, a creditor in another state can garnish a Texas resident’s wages if those wages are paid in a state that allows wage garnishments. In this case, the wage garnishment laws of the other state apply. Specifically, since a wage garnishment is sent to the debtor’s employer, it is enforceable in the debtor’s work state.

Exceptions

Though creditors cannot garnish in Texas, a debtor’s wages may be garnished for child support, federal student loans and an Internal Revenue Service tax levy. Child support withholding orders must come directly from the court, whether in state or out of state, to be valid. The IRS and the U.S. Department of Education do not need court orders to garnish for back taxes and student loans, respectively, but each agency must notify the debtor of its intent to garnish prior to doing so.

Withholding Limits

For child support withholding in Texas, an employer withholds according to the amount stated on the court-ordered document. Texas law limits the amount an employer may withhold for child support to 50 percent of an employee’s disposable pay – his income after legally required deductions, such as payroll taxes, union dues, and medical and disability insurance coverage for the employee and his children. For federal student loans, an employer may withhold not more than 15 percent of disposable pay. An employer may also deduct an administrative fee of up to $10 per month each for child support and student loan garnishments. To determine the amount to withhold for an IRS wage levy, the employer consults the levy notice and Publication 1494.

Prioritization

Child support withholding orders in Texas take precedence over non-tax debts, such as student loans. A support order takes priority over an IRS levy only if the support established date comes before the date the employer received the levy; otherwise, the levy comes first.

References

• BCS Alliance: Wage Garnishment and Bankruptcy Exemptions -- Texas
• Attorney General of Texas: Wage Withholding
• Texas Workforce Commission: Allowable Deductions Under the FLSA
• Cornell University Law School: Wage Garnishment Requirement
• TexasLegalEntities: Domestication/Domesticating Foreign Judgments/Registering Foreign Judgments

Resources

• IRS: Publication 1494