A wage garnishment is a court order or government agency order that is sent to an individual’s employer. A wage garnishment order is used to deduct money from an employee’s paycheck until their debt is satisfied.
Once the funds are deducted, they are sent to the creditor. In the State of Texas, a creditor is not permitted to garnish wages without a judgment unless the debt is for one of the following:
If an individual has any questions regarding their wages being garnished, they should consult with a Texas lawyer.
Are There Limits on Texas Wage Garnishments?
Yes, there are limits on Texas wage garnishments. Federal laws allow a creditor to take up to 25 percent of an individual’s paycheck.
The garnishment amount in Texas, however, may vary according to the unpaid debt, including:
- Child support: Up to 50 percent of disposable income;
- Unpaid taxes: The amount garnished depends on the number of dependents and deduction rates;
- Defaulted student loans: Either 15 percent of disposable income or 30 times the minimum wage; and
- Spousal support: Up to 50 percent of disposable income.
Can a Creditor Garnish My Wages if I Work for an Out-of-State Company?
Yes, a creditor is permitted to garnish an individual’s wages if the money that they earned comes from outside of the state of Texas. This also applies if an individual receives money from a source outside of the State of Texas.
Are There Other Ways a Creditor Can Satisfy the Debt I Owe?
Yes, there are other ways a creditor may satisfy the debt that an individual owes. For example, a creditor may be able to seize assets, such as a bank account, or place a levy on assets until their debt is paid.
What Funds Are Exempt From Garnishment?
Exempt funds include funds that are protected under state or federal law from being garnished by creditors or seized. Exempt funds usually include things such as:
- Social Security benefits;
- Disability benefits;
- Veteran’s benefits;
- Unemployment insurance;
- Workers’ compensation;
- Certain types of public assistance; and
- Retirement income.
Generally, exempt funds are exempt from debt collection. This means that, even if a creditor has a judgment against an individual and is seeking to garnish their bank account, the creditor cannot take the exempt funds.
It is important to note, however, that there may be exceptions, depending on the specifics of the law in the jurisdiction and the nature of the debt. For example, certain forms of government debts, such as taxes and student loans, may, in some cases, be collected from normally exempted funds.
What Is a Wrongful Wage Garnishment?
Wrongful wage garnishment occurs when an entity or creditor garnishes an individual’s wages without following the required legal procedures or if the wage garnishment violates federal or state laws. Examples of wrongful wage garnishment include:
- Garnishing wages without a court order: A creditor is required to obtain a court order before garnishing wages. If the creditor does not do so, the garnishment may be deemed wrongful;
- Garnishing exempt income: Certain forms of income, for example, Social Security benefits, are exempt from wage garnishment. If a creditor garnishes these types of income, the wage garnishment may be considered wrongful;
- Garnishing wages above the legal limit: There are limitations on the amount of wages that may be garnished under state laws and federal laws. If a creditor garnishes a worker’s wages over these limitations, the wage garnishment may be considered wrongful;
- Failing to give notice: A creditor must provide notice to an individual before garnishing their wages. If they fail to do so, or if they fail to provide proper notice, the wage garnishment may be considered wrongful; and
- Using illegal debt collection practices: Creditors are required to follow specific rules and regulations when they are attempting to collect debts, and they are not permitted to engage in harassing or abusive debt collection practices. If a creditor engages in illegal debt collection practices related to a wage garnishment, the garnishment may be considered wrongful.
If an individual believes that their wage garnishment is wrongful, they may be able to challenge the wage garnishment in court with a lawyer’s assistance.
How Do I Stop a Garnishment?
A wage garnishment may be used when a creditor obtains a court order to garnish the wages of a debtor for repayment of their debt. Debts that are commonly satisfied using a wage garnishment include auto loans, credit cards, and home loans.
An individual may have a large amount of debt. If so, a court will apply a wage garnishment in order to force the employee to repay some of their debt so they do not increase the debt they already owe and have to file for bankruptcy.
A court order is required for a creditor to be permitted to garnish an employee’s wages, except if the debt is:
Any other type of debt, including credit card debt, requires a court order to garnish a worker’s wages. It is important to note that child support should not be garnished from an individual’s wages until a court order is issued.
Although a creditor may obtain a court order to garnish wages, there are limitations on the amount of income that can be garnished and what type of income is subject to garnishment. Under federal law, wage garnishments cannot exceed:
- 25% of the individual’s disposable income or after-tax earnings;
- The federal minimum wage multiplied by 30.
Additionally, the state may further limit the amount that may be garnished. For example, 15% of an individual’s income may be deducted for student loans, and another wage garnishment is ordered. In this case, only 10% of the individual’s income may be taken to satisfy their second debt.
Garnishments are limited so that employees will still have income to live on. With a child support lien, however, up to 50% of a debtor’s earnings may be subject to a wage garnishment.
Typically, wage deductions are automatic with new child support orders. If an individual owes unpaid child support, a specific wage garnishment may be ordered to collect the debt.
For example, if an individual is ordered to pay child support but they do not have a job, they may still owe the payments that they missed while being unemployed. If an individual gets a job in the future, the court may order a garnishment for those months of missed payments.
Can I Get Fired in Texas for a Wage Garnishment?
It may be possible for an employer to terminate a worker due to a wage garnishment. It is important to note that this is only allowed if the worker accumulates more debt, which results in a second-wage garnishment.
Title II of the Consumer Credit Protection Act prevents employees from being terminated for a wage garnishment, but only if they do not keep accumulating more debt. If a worker is fired due to a wage garnishment, it may be considered wrongful termination.
Should I Talk to a Lawyer in Texas About My Wage Garnishment?
If you have any issues, questions, or concerns regarding wage garnishment in Texas, it is essential to consult with a financial attorney in Texas. Your lawyer can advise you about what type and how much of your wages may be garnished.
If your wages are being wrongfully garnished, your attorney can assist you in having the garnishment stopped. Wage garnishment can be stressful, and having a lawyer on your side can help ease your burden.