Having a large amount of debt can make you feel like you are at the mercy of your creditors. If you are struggling with debt, you should know that you are legally protected from intrusive tactics, such as taking money directly from your paycheck. This practice, called wage garnishment, is usually illegal in Texas. If you have creditors threatening to garnish your wages, you should speak with a bankruptcy attorney.Is Wage Garnishment Legal?The laws pertaining to garnishing wages vary from state to state. In Texas, it is an illegal practice except when the debt is in the form of:
- Unpaid taxes
- Student loans
- Child support
- Spousal support
What Is Wage Garnishment?
This practice is a way for creditors to recover their debts directly from your paycheck. When it is done, a portion of your pay goes from your employer directly into your creditors' accounts. In Texas, most forms of debt are not eligible to be collected this way, including:
- Credit card debt
- Other forms of consumer debt
- Hospital bills
- Car loans
When Is It Allowed?
If you owe child support, spousal support, unpaid taxes, or student loans, your employer may be required to comply with orders to garnish a portion of your wages. In the case of back taxes, the federal government does not need a court order to do this. However, there are legal limitations to the amount that can be taken from each paycheck.
Child Support and Spousal Support
A maximum 50% of your disposable earnings can be garnished for child support or spousal support. The term “disposable earnings” refers to the income you receive from each paycheck after your employer has deducted the amount that they are legally required to withhold.
In the case of student debt, your earnings are protected from garnishment up to 30 times the federal minimum wage. The U.S. Department of Education can collect 15% of each paycheck as long as the amount it takes does not put you below the protected limit. Sometimes, an agency working for the U.S. Department of Education will do the garnishing on its behalf.
The amount the government is allowed to take from your paycheck varies from person to person. It is based on your standard deduction and the deductions you took for personal exemptions. After calculating the total amount of wages to garnish each year, the government divides it into 52 weekly withdrawals.
What Is Writ of Garnishment?
Writ of garnishment is another practice that allows creditors to channel your income into their accounts. It can be used for ordinary debt in addition to the types of debt that are subject to wage garnishment.Writ of garnishment can only be done if a court issues an order to freeze your bank account. Once you no longer have control over it, your creditor can take money after it is deposited. By doing this, they get around the restrictions on garnishing wages directly from each paycheck.
Your Rights Are Important
Illegal practices and creditor harassment towards people who are struggling with debt are not uncommon. If you find yourself in this situation, a consumer advocacy law firm can provide legal services to protect your rights. You should speak with a lawyer if any creditor threatens a form of illegal garnishment or engages in any other prohibited behavior.
Types of Harassment
Contacting You in Inappropriate Ways
Creditors are prohibited from calling you repeatedly. They cannot contact you if the intent is to deliberately annoy or intimidate you into complying with them.
Creditors are not authorized to deport, jail, or physically harm you. Any such threats are baseless and illegal.
Sometimes, collections agencies will pretend to be calling from the police force, the FBI, the CIA, or another agency. This practice violates several laws and is strictly prohibited.
Exposing Your Debts to Others
Collection tactics sometimes include illegal attempts to publicly shame debtors into paying. For example, creditors cannot send notices in brightly colored envelopes with the details of the debt printed on the outside. Nor can they post your private financial information on social media, in a newspaper, or to any other media.
How Can You Protect Your Wages?
Having your wages garnished is only one of the many challenges that come with debt. Insecurity about your financial future, bad credit, and harassment are all things that people deal with when they owe large amounts of money. The best way to protect yourself, your mental wellbeing, and your paycheck is to address the root of the problem. Speaking with a bankruptcy lawyer can help you develop a plan to relieve your debt.
How Can a Bankruptcy Lawyer Help?
Advocating for Your Rights
Getting out of debt can involve negotiating with big lenders such as credit card companies. It can also mean going up against collections agencies whose goal is to intimidate you. Depending on the kind of debt you have, it can even mean dealing with the actions of the U.S. government. All of these parties have strong legal teams, so you will need to work with an experienced attorney whose sole objective is to advocate for your rights as a consumer.
Creditors who threaten to garnish your wages and use other illegal tactics assume that you do not know your rights. Working with a knowledgeable attorney can help you understand when they have overstepped their boundaries. Your attorney can give you distinguish between empty threats and inquiries and valid statements.
Educating You on Your Options
Your lawyer can provide you with a menu of options, including bankruptcy, debt consolidation, and debt settlement. Bankruptcy is an excellent strategy for eliminating large portions of your debt. With debt consolidation, you can combine many smaller accounts onto one loan, simplifying your financial obligations and potentially lowering your interest rate. If you choose debt settlement, you might be able to negotiate your debt down by offering your creditors a lump sum of money.Your financial situation is unique, and the best solution for you will depend on the details of your debt. Your lawyer should take the time to review your accounts, calculate your income to expenses ratio, and learn whether or not you have any funds available to pay off your debt. After carefully reviewing your situation, he or she will be able to recommend some viable options for you.
Navigating the Legal System
Finding a way out of debt often means following legal protocols, filling out documents correctly, meeting deadlines, and leveraging the law to your advantage. Your attorney can support you with their fine-tuned knowledge of the legal system, guiding you through the paperwork and coaching you on how to present yourself. If you are required to make a court appearance, your lawyer can provide you with professional representation.
Protect Your Wages and Clear Your Debt
While garnishing wages is illegal, many creditors still threaten to do it. If they choose to go about collecting the debt in a legal way, they might file a costly lawsuit against you. Speaking with a bankruptcy lawyer is the best way to find a path forward. If you would like to learn more about how you can get out of debt, contact Thomas Kerns McKnight LLP.