The state of Texas is unique among states when it comes to wage garnishment laws. In contrast to most other states and federal law, Texas imposes significant limitations on creditors seeking to garnish a debtor’s wages to satisfy unpaid debt. Generally speaking, the only debts for which a debtor’s wages can be garnished are unpaid student loans, taxes, child support, and alimony.
Wage Garnishment Defined
In Texas wage garnishments are commonly referred to as wage attachments. Wage attachments are court orders or orders from a state agency that direct your employer to withhold a certain sum from your wages and pay it over to the creditor. Depending on the type of debt involved, there are fixed legal limits on the amount of your wages that can be withheld.
Limited Garnishment for Texas Creditors
In most states, all creditors have the right to garnish a debtor’s wages, subject to a short list of exceptions. In Texas, it’s just the opposite: most creditors cannot garnish your wages, though there is a short list that can.
The creditors that can garnish wages in Texas include the following:
- The government, for unpaid taxes, fines and penalties.
- Unpaid child support and alimony.
- Court-ordered child support and alimony even if not in arrears.
- Unpaid student loans that have been declared in default.
To be sure, however, all creditors still have other remedies outside wage garnishment. All creditors can attach other assets, such as funds in bank accounts, stock, real estate and other valuable assets unless a separate protection exists of them.
Garnishment Still Available Against Some Texas Debtors
Some Texas residents move to Texas after incurring debt in another state. These debts may not be protected from wage garnishment by Texas law. These out-of-state creditors may be able to attach wages by enforcing judgments from other states, using the laws of another state and not invoking Texas garnishment law.
Also, one strategy Texas creditors use is to determine if your employer has its home office or resides in another state that allows wage garnishment. The Texas law only applies to creditors residing in Texas. If you employer resides outside Texas, then the creditor can apply for a garnishment order in that state. Texas law will not protect you there.
Wage Garnishment Limitations in Texas
Under federal law, and in all states, including Texas, a creditor can only garnish a limited portion of your paycheck. This limit on garnishment is imposed so as to further the public policy of enabling debtors to keep enough of the wages to pay for living expenses for themselves and their families.
Further, if you work for an out-of-state company or receive your wages from a source outside of Texas, a creditor may be able to domesticate its judgment in that state and still garnish your wages, as described above.
Student Loans Declared in Default
The United States Department of Education administers federally-guaranteed student loans. If you are declared in default on one or more of these loans, typically the Department assigns the debt to an approved collection agency acting on its behalf to collect the unpaid loan. This agency need not obtain a court order to garnish your wages. Instead it may proceed by way of an administrative garnishment. Unlike child support, however, the most that this garnishment can attach from your wages is 15% of your disposable earnings, but not to exceed 30 times the federal minimum wage.
If you owe back income taxes to the federal government, the IRS can garnish your wages. As with defaulted student loans, it need not first obtain a court order for garnishment. How much it can garnish depends on several factors: the number of your dependents, and your deduction rate. Texas also allows the state and local (county, city) governments to garnish wages without a court order.
Texas allows as much as half of the “disposable earnings” from your paycheck, or 50%, to be garnished to satisfy child support and alimony obligations. Texas law defines “disposable earnings” as the money remaining after deductions have been made by your employer for legally-mandated items such as taxes, union dues, worker’s compensation, unemployment insurance, certain retirement plans, and medical and disability insurance for you and your family.
Maximum Garnishment Allowed by Texas Law
No matter how many garnishment orders you have for child support or alimony, the maximum amount of wages that can be attached from your paycheck is half or 50% of your disposable income.
Prohibition on Being Fired for Wage Garnishments
Complying with wage garnishment orders is a burden to your employer that does not improve their bottom line. As a result, some employers might be inclined to fire an employee who is easily replaceable in lieu of doing all that extra paperwork. Federal law bars employers from terminating an employee due to a single garnishment, but provides no protection to the employee who receives two or more garnishments in the same year. Texas law then goes one step further. Under Texas law, an employer can never terminate, demote, reprimand or decline to hire an employee due to a garnishment, regardless of the number of garnishment occurring in any one year.
www.twc.state.tx.us – Texas Workforce Commission
www.texasattorneygeneral.gov – Texas Attorney General
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