The short description of wage garnishment in Texas is: there isn’t any.
The longer description notes that under Texas law, wage garnishment is available for child support payments and student loans—however, it most certainly is not available for consumer debt (including credit card debt) or debts arising from breach of contracts or torts (including auto accidents and professional malpractice). As such, for the most part, Texas debtors do not need to fear having part of their wages or salary sent to a creditor to satisfy a debt.
The even-longer description will note the following:
- Garnishment is broader than wages—any money belonging to or owed to a debtor, and which is in the possession of a third party, may be garnished. For example, the debtor’s money in a bank account may be garnished; or the debtor’s income from non-wage sources, such as rent or royalties, may likewise be garnished. So the unavailability of wage/salary garnishment does not mean that all a debtor’s income or money is exempt from garnishment—though as set forth below, Texas also has broad exemptions or protections for certain categories of income, particularly retirement benefits. As result, there most income sources of most Texans, in one way or another, are protected from any sort of garnishment.
- If a debtor owes money to his or her employer, the employer may withhold wages to satisfy that debt (since there are only two parties—the debtor and the creditor, who happens to be the employer—this is not technically garnishment; garnishment is when a third party holds the debtor’s money).
- Someone who owes federal taxes (i.e. to the IRS) could be garnished through federal, not Texas, process.
- It may be possible to take a Texas judgment—i.e. a determination from a Texas court that someone owes money—to another state, “domesticate” the judgment in that other state, and have the other state’s court order garnishment. This is obviously a convoluted and potentially expensive process that will rarely be done.
- Similarly, a Texas debtor who owes money to an out-of-state creditor could have that creditor bring an action in its courts to obtain a judgment, then seek garnishment.
In the last two situations mentioned above, the law of another state will apply. It is therefore safe to say that no wage or salary garnishment, other than for student loans or child support, in Texas itself.
Texas Garnishment Exemptions and Non-Exemptions
Even beyond the exclusion of wages and salary from garnishment, Texas (and federal) law provides additional protection for various income streams, such as:
- Social Security: according to federal law, it can only be garnished for child support, alimony, federal taxes, and certain other debts to the federal government. This will apply when another state is imposing garnishment on a Texas resident.
- Pensions: many governmental employee pensions are protected from garnishment. In addition, any sort of tax-deferred retirement benefit will also enjoy broad protection from garnishment.
- Public assistance or benefits: several common forms of public assistance also enjoy exemptions from garnishment, including: workers’ compensation; unemployment benefits, aid to families with dependent children; and medical assistance.
- Insurance or annuities: there may be protection for income provided by several types of insurance or annuity benefits (such as health or disability benefits); however, since not all insurance-related benefits enjoy protection, if a debtor is facing garnishment and has income from insurance or annuities, he or she should consult with an attorney to see if they are exempt.
To the very limited extent garnishment is permitted in Texas, it is subject to the federal maximum garnishment threshold (applies everywhere), which allows the lesser of the following may be garnished:
- A total of 25% of disposable income, other than for taxes and child support; or
- The amount by which a debtor’s weekly income exceeds 30 times the minimum wage
“Disposable income” is income left after legally required paycheck deductions, such as withholding for FICA. As a result, most income is “disposable income” subject to garnishment.
When the debt is for taxes or child support, the federal government allows more than the usual 25% maximum to be garnished. (It can go as high as 50% - 60%). Since those are two of the very limited types of debt for which wage garnishment in Texas may be allowed under Texas or federal process, if someone is facing garnishment in Texas, it’s very likely that more than 25% of their income will be subject to garnishment.
Texas Statute of Limitations
Since someone could obtain a judgment in Texas and then look to domesticate and enforce it elsewhere, Texas statutes of limitation—or the time to bring a lawsuit—could become relevant to a garnishment action. Statutes of limitation typically vary by type of debt or cause of action, but in Texas, most statutes of limitation are 4 years.
In the event that someone has one of those few types of judgments for which garnishment is available in Texas (such as growing out of non-payment of student loans, or an order for child support), they have at least 10 years to enforce the judgment via garnishment or otherwise.
Writ of Garnishment
As noted previously, most often, if a Texas resident is being garnished (other than for child support or student loans), it is through the actions of another state’s court or a federal court. However, garnishment everywhere follows the same general process:
- The garnishment is based on a favorable judgment or other legal determination of the debtor’s obligation to pay (note: this—when the creditor is suing to obtain the judgment—is when the debtor has the chance to fight the claim that he or she owes money).
- The creditor applies to a court in writing for garnishment
- The creditor in its application states that it has a judgment for money; the debtor has not paid the judgment; garnishment is necessary to secure payment; and a third party (the “garnishee”) is believed to have money belonging or owed to the debtor (like the debtor’s wages) which could be used to satisfy the judgment.
- Assuming all the facts are correct (e.g. the judgment is valid; the garnishee has money owed debtor; etc.), garnishment will usually be ordered.
More on Stopping Wage Garnishment in Texas.
Getting Legal Help
A Texan threatened with garnishment from or through another state’s court should retain a lawyer admitted to that state’s bar, who can make sure the judgment and garnishment are valid, as well as seek to enforce any of the other state’s exemptions or restrictions on garnishment. In addition to other ways typically available to challenge garnishments (such as by challenging how the underlying judgment was rendered, or challenging the garnishment itself as too old under the statute of limitations), an attorney may be able to challenge an out-of-state garnishment on grounds that the other court’s jurisdiction (or power) over the Texan has not been properly established.
For a garnishment under Texas law, an attorney can try to challenge the judgment or the garnishment, usually on process/procedural or statute of limitations grounds. An attorney can also determine which Texas exemptions apply to the debtor’s income; the more income that can be shown to be exempt from garnishment, the less total that could be garnished.
For more information:
FAQ sheet about Federal garnishment rules[http://www.dol.gov/whd/regs/compliance/whdfs30.pdf]
Social security and garnishment[http://www.ssa.gov/deposit/DDFAQ898.htm]