How to Fight a Wage Garnishment
If you’re significantly delinquent on your debts then you’re probably at risk for a wage garnishment. Creditors are becoming more aggressive when it comes to collecting on even small amounts of debts and wage garnishment is just one of their many collection tools.
Texas Wage Garnishment Law
Wage garnishments are severely limited under Texas law and only certain kinds of debts qualify for wage garnishments. Those are:
- Child support,
- Taxes, and
- Student loans.
In Texas, these are called wage attachments. The creditor or (individual to whom you owe money) can petition the court to attach a wage garnishment to your monthly salary to repay the types of debts mentioned above. Most Texas creditors cannot garnish your wages. If the majority of your debt is credit card debt or medical expenses, you won’t have to worry about wage garnishments.
That doesn’t mean that you don’t have to worry at all. Creditors can still levy your bank account.
Four Steps to Fighting a Wage Garnishment
Don’t ignore the notices you receive from your creditor.
One of those notices could be informing you of a pending lawsuit. If you find out that you are being sued, take the time to respond and show up to court. You have a right to defend yourself against creditor lawsuit. You can also file bankruptcy which will stop the lawsuit immediately.
Come to court prepared.
Is the amount that they say you owe correct? Do you really owe this debt? The creditor filing the lawsuit is obligated by law to prove that you in fact owe the debt; but oftentimes they don’t have the proof. If they don’t have proof that you owe this debt, then they will not be able to win a judgment and they will not be able to use a wage garnishment against you.
If a creditor is able to win a judgment against you and tries to get a wage garnishment, know your rights.
First off, don’t go into hiding. If you’re working, they will find you and garnish your wages. First off know that if you are earning less than $217.50 a week they cannot garnish your wages. If you earn $290 a week or less, they can only get a wage garnishment for 10 percent of your income or whatever you earn above $217.50 a week, they must choose whichever is less. If you earn more than $290 a week, they can garnish up to 25 percent of your earnings. However, they cannot garnish so much of your money that it prevents you from paying essential things such as your rent, utilities or child support payments.
Remember, even if you are already suffering from a wage garnishment, filing bankruptcy will stop the garnishment.
Once you are approved for a bankruptcy discharge, the garnishment will be eliminated and the associated debt will be discharged.
More Tips to Keep in Mind
The Creditor Will Move Quickly; You Should Too
For the creditor, moving quickly is the best option. The first thing they must do is initiate a lawsuit against you. Then, they must obtain a judgment against you. After that, they can petition the court to put a lien on your property, levy your bank account and garnish your wages. Each of these actions has discreet steps and, the faster they move, the better there chances are of using the power of the state to take their money by force.
Wage garnishments are particularly embarrassing because they require your employer to withhold funds from your check and send those funds to the creditor. The majority of people will want to act before that becomes a possibility.
Garnishment Amounts for Child Support and Alimony
If you have a child support order, there will be an automatic income withholding order against your paycheck. If you are behind in your payments, the other parent can get a wage garnishment order to recover funds that have yet to be paid out. While Texas has strict laws regarding what creditors can do, it also has strict laws governing parental obligations. Up to 50% of your disposable income can be garnished to repay child support. So it’s important to stay current and, if you can’t, make some good-faith arrangement to the parent to whom you owe the money.
Federal Student Loans and Wage Garnishments
Your wages can be garnished up to 15% to repay federal student loans and there isn’t much that you can do about that. Student loans cannot be discharged in bankruptcy unless you can show a hardship exemption which usually requires some form of permanent disability. The federal government does not require there to be a judgment against you either.
Federal and State Back Taxes
When it comes to debts owed to the state and federal government, they have certain privileges that private creditors do not. Private creditors are expected to obtain judgments against a debtor in court, file lawsuits, and then they can take your money. The government can simply take your money with the only caveat being that they’ll inform you first concerning why your money is being taken.
Dealing With Wage Garnishment
If your wages are being garnished in Texas, you can still apply for a hardship exemption. In these cases, you will need to prove some form of hardship has occurred that prevents you from repaying the debt at the present time.
For student loans, you will get a 30-day notice of garnishment during which you can apply for a hardship exemption. For taxes, you will receive a written notice from the IRS that they intend to garnish your wages. The documents they send you should inform you concerning alternate remedies to garnishment. If you owe state taxes, you can contact the Texas state franchise board and attempt to argue hardship or come up with an alternative repayment plan. If your wages are being garnished for child support or alimony, you should discuss the matter with your attorney. You may be able to negotiate a better support payment plan that doesn’t financially cripple you.
The important thing to remember is that wage garnishments are only available in certain situations. However, once a private creditor has obtained a judgment against you, they will move quickly to place liens on your property or levy your bank account. Once your bank account is levied, those funds will be frozen. The creditor can then file an action to transfer the frozen portion of the funds to their own coffers. You want to contact an attorney before that happens as you will not be able to get that money back once it’s garnished. This is also why creditors tend to act as quickly as possible. Once you file for bankruptcy, they’re out of luck.
Stop Wage Garnishments With the Help of a Dallas TX Bankruptcy Attorney
To learn more about how to fight a wage garnishment, contact Allmand Law Firm, PLLC today for a free consultation. We would be happy to answer any of your questions.