Wage garnishment in Texas: When and how can it be done?
Wage garnishment can only be used to collect on certain debts and within set limitations.
April 30, 2013
Wage garnishment in Texas: When and how can it be done?Article provided by Mastriani Law Firm, PC
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Sometimes an item of property may be taken to pay off a debt, such as when a car is repossessed because the owner failed to make payments on the loan. In other cases, an individual may have a portion of his or her paycheck or wages withheld and used to pay off a debt. The latter is called wage garnishment, and it can only be used to collect on certain debts and within set limitations.
Debt collectors may threaten to have an individual's wages garnished to pay off a consumer debt such as credit card debt in Texas, but this is prohibited. Understanding how wage garnishment works and when it may be done can help allay one's fears when dealing with debt and harassing creditors.
What is wage garnishment?
When an individual's wages are garnished, the creditor presents a court order to the individual's employer, showing that the creditor was granted the right to garnish the individual's wages after a hearing before a judge. Then, a portion of the individual's wage, salary, commission, bonus or retirement plan may be withheld, with the funds used to pay off the debt.
Who and what debt does it apply to?
Wage garnishment can occur to anyone receiving personal earnings -- excluding tips -- with qualifying debt. In Texas, wage garnishment can only be used to obtain funds to pay off court-ordered child support, student loans or back taxes owed to the government. Wages cannot be garnished to pay off medical debt, credit card debt or mortgage debt.
Are there limitations on wage garnishment?
In addition to the restrictions on the type of debt that wage garnishment can be used to pay off, there are also limitations on how much money can be withheld from an individual's paycheck under the Consumer Credit Protection Act.
The CCPA offers employees two significant protections regarding wage garnishment. First, the amount of earnings that can be garnished in any workweek or pay period is capped at either 25 percent of the individual's disposable earnings, or the amount by which the individual's disposable earnings exceed 30 times the federal minimum wage, whichever is less. However, some provisions allow up to 50 or 60 percent of an individual's disposable earnings to be garnished for certain child support obligations. An individual's disposable earnings are defined as the amount he or she receives after legally required deductions like taxes and Social Security contributions are made.
Second, under the CCPA, employees cannot be fired from their jobs because their wages are garnished for one debt. Conversely, though, it is permissible for an employer to fire an individual if two or more of his or her debts are subject to wage garnishment.
Wage garnishment can be a complicated process with many legal nuances. If you are struggling with debt and may be facing wage garnishment, contact a debt defense attorney who can help you understand your options and find a solution.