Summary: There are many questions about wage garnishments. Bankruptcy can stop wage garnishments. If your wages are being garnished, in most cases, we can file your case with a very low payment to allow you to free up your funds.
Will bankruptcy stop wage garnishments?
How much can be garnished from your wages?
Will I know before my wages are garnished?
Can my wages be taken from my bank account after they are deposited?
Wage Garnishment in Texas
Can wages be garnished in Texas? (Updated 2021)
Wage garnishments of Texas residents is generally not allowed. But there are exceptions. Texas residents can expect to be garnished for these types of debts:
- Debts owed to the United States government, such as taxes, student loans, or other federal debt
- Domestic support obligations, such as child support or alimony
- Out of state judgments in certain circumstances
- If you work for an out of state employer
Even in Texas, the US government and child support can be garnished. For judgment creditors, whether you can be garnished depends. If you move here from another state, you may be subject to seizure of your wages through garnishment. This is also true if you work in another state for an out-of-state employer. In order to garnish your wages, the creditor has to be able to obtain an order allowing your wages to be garnished. Texas courts won’t issue that order. But if a court in another state has a garnishment order, it can be enforced in Texas.
Will Bankruptcy Stop Wage Garnishments?
Filing bankruptcy will end all garnishments except for child support. We can file an “emergency bankruptcy” to stop your money from being seized. In most cases, money seized from your check in the last 90 days over $600 has to be returned to you when you file bankruptcy. Either Chapter 7 bankruptcy or Chapter 13 bankruptcy can be used to stop garnishment.
Filing an emergency bankruptcy petition
An emergency bankruptcy petition can be filed to stop wage garnishment. An emergency petition only requires a small amount of paperwork and can be done very quickly. Typically, once the petition is filed, the stay order will instantly be entered.
Filing bankruptcy stops wage garnishments
Bankruptcy may immediately stop wage garnishment. Depending on the type of garnishment, Chapter 7 bankruptcy or Chapter 13 bankruptcy may be chosen. The instant the bankruptcy is filed, an automatic stay order is usually entered.
Notifying the creditor to stop garnishing
You should provide your attorney with the name, address, and fax number of the garnishing creditor. The garnishing creditor is notified by fax and mail. Your employer may also need to be faxed a copy of the order. If you have received a notice of intent to garnish, it is important to contact an attorney immediately.
Recovering money garnished in the last 90 days
A debtor should provide his attorney with proof (such as paystubs) of the amount garnished from a paycheck in the last 90 days. Recovery of funds garnished in the 90 days before filing may be possible if the debtor has exemptions available to protect the funds upon return from the creditors. Creditors often voluntarily return wages garnished upon request by the debtor’s attorney.
Stopping child support garnishment
In most circumstances, garnishment for past child support arrearage may be stopped by filing and providing for the arrearage in Chapter 13 bankruptcy. Withholding for the regular (current) child support payments continues. Where the Debtor has lost his job or income has decreased, the Bankruptcy Court cannot lower the regular child support payment. The Texas Attorney General Child Support Unit may be able to help you if you request your payment be lowered. Texas Attorney General Child Support Unit publishes an FAQ on garnishment procedures for child support. A family law attorney may also assist you with lowering regular child support payments.
Chapter 13 bankruptcy may be used to catch up on past-due child support over a 5 year period. This may lower the amount that is being garnished for arrearage. Certain arrearage may not have to be paid back at all and can be discharged. This is limited to arrearage that has been assigned to a governmental unit. This is usually where a state agency provided welfare benefits in exchange for the mother assigning her child support rights.
How Much Can Be Garnished From Your Wages?
Depends on how much you make and other garnishments from your paycheck. For garnishment of federal debts, you have a right to a hearing if the garnishment creates a certain level of hardship.
Restrictions on wage garnishments
Even though Texas doesn’t generally permit wage garnishment to collect debts, certain wage garnishments are allowed. The amount that may be involuntarily garnished from your paycheck depends on the type of debt and the creditor. Bankruptcy may stop garnishments and you may be able to recover the funds garnished in the last 90 days.
Maximum amount of wage garnishments
Under federal law, a worker’s wages may not be garnished for ordinary garnishments, regardless of the number of garnishments, over a total maximum of 25% of disposable earnings or the amount by which the earnings for the week exceed 30 times the Federal minimum hourly rate. Under Texas state law, garnishment is generally not permitted to collect ordinary judgments. If a judgment creditor can enforce a garnishment without requiring any action by a Texas court, however, even a Texan’s wages may sometimes be garnished for debt other than federal debt or domestic support obligations. This may happen if a person gets a judgment against them while living in another state and then moves to Texas and works for an employer who has an office in another state that allows garnishment.
Specific restrictions apply to garnishments for child support or alimony. Up to 50% of a worker’s disposable income may be garnished where the worker supports another child or spouse. If the worker is not supporting another child or spouse, up to 60% may be garnished. For child support that is behind more than 12 weeks, an additional 5% may be garnished.
Non-tax debts owed to federal agencies
Up to 15% of disposable earnings may be garnished for debts owed to federal agencies.
Federal student loan garnishment
Federal student loan judgment creditor is limited to 10% of borrower’s disposable income. Some courts have held this is a maximum limit for all student loans, but other courts have held it is an individual loan cap and the total of all student loans being garnished can go up to the 25% maximum allowed under the Consumer Credit Protection Act. In Texas, private student loans may not be able to garnish a Texas resident’s wages where the loan was incurred in Texas and the Texas resident works for a Texas company.
Wage garnishment calculator
To calculate your disposable earnings, the Department of Treasury has an online calculator.
If your wages are being garnished, filing bankruptcy may stop the garnishment. In certain circumstances, you may be able to recover the amounts garnished within the last 90 days when you file bankruptcy. Consulting with a bankruptcy attorney as soon as notice of garnishment is received is important.
Will I Know Before My Wages Are Garnished?
You will receive notice from your employer before funds are taken from your check. How much notice will depend on whether the debt is federal debt, child support or alimony, or just a regular debt.
Garnishment notice requirements
Federal tax debt
Before the IRS garnishes your wages, you can usually expect:
- Series of notices ending with Final Notice of Intent to Levy;
- 30 days notice of intent to levy your wages (garnish) including the right to a hearing.
Federal debts other than taxes
Before wages can be garnished for a federal debt (other than taxes), you can expect 30 days written notice by mail and will be given the opportunity:
- To inspect and copy records related to the debt;
- Chance to enter into written repayment agreement;
- Opportunity for a hearing to challenge the debt.
Child support garnishment
Child support wage withholding orders are entered as part of the child support order. For arrearage, 30 days notice of intent to garnish wages must be given.
Can My Wages Be Taken From My Bank Account After They Are Deposited?
Most definitely, yes. If your creditor has a judgment and serves your bank, your account will be frozen. After a certain time period, the funds will be paid to the seizing creditor. Filing bankruptcy will result in the garnishment action being reversed. In some cases, you will get any funds taken back.
Request for Suspension of Garnishment Due to Hardship
Where a debtor is being garnished for federal debt, there is a procedure to request a hearing under certain circumstances, including where the garnishment would cause financial hardship. When a notice of intent to garnish is received, a debtor should immediately consult an attorney. Time deadlines may apply for exercising options and rights.
Garnishment of Social Security Benefits
Social security benefits can usually not be garnished. There are some exceptions to this which involve garnishment for child support, alimony and federal debt, such as taxes or student loans. Supplemental Security Income benefits (which are means tested benefits) are usually exempt from any type of garnishment. Learn more about garnishment of social security benefits.
Veteran’s benefits may have some protection. The key to protecting this income source is to keep the account segregated. That means never put any funds into the account other than the veteran’s funds. You may take them out for any purpose, but do not place funds into the account that you cannot directly prove are veteran’s benefits. Learn more about how to get help if you’re a veteran.
Ready to find out whether bankruptcy can help you?
Complete our free, online debt evaluation form or call/text our office at (903) 759-5922. You can also email Carol@CrossStone.com. Find out if bankruptcy is your best option and whether it will help you.