When You are in Debt, Reducing Your Paycheck can add to Your Stress
If you are already drowning in debt, having money taken out of your paycheck just adds to your financial nightmare. Wage garnishment (also called wage attachments) are court or state agency orders that tell your employer to take money from your paycheck and pay it to your creditor.
Texas Law Places Limits on Wage Garnishments
Though wage garnishment is extra work for your employer, Texas law prohibits employers from terminating, demoting, reprimanding or declining to hire an employee due to a wage garnishment—no matter how many wage garnishments occur. The maximum amount that can be garnished is 50 percent of your disposable income.
Texas law defines disposable income as the money remaining in your pay after deductions for legally-mandated items. This includes taxes, union dues, workers compensation, unemployment insurance, some retirement plans, and medical and disability insurance for you and your family. Texas residents can only have their wages garnished for these debts:
- Government debt for unpaid taxes, fines and penalties. The amount that can be garnished for unpaid taxes depends on your number of dependents, your deduction rate, and other factors.
- Child support and alimony. Your wages may be garnished up to 50 percent of your disposable income for unpaid and court-ordered child support and alimony that is not past due.
- Student loans that are in default. The maximum amount your wages can be garnished for student loans is 15 percent of your disposable income or not more than 30 times the federal minimum wage (whichever is less)
- Wage garnishment judgements from another state. Out-of-state creditors can enforce wage garnishment judgement s from other states.
Wage Garnishments Stop When You File for Bankruptcy
Depending on your financial situation, bankruptcy may be a way to stop wage garnishments and wipe out your debts. When you file for bankruptcy, wage garnishments stop immediately. You may also be able to reclaim money taken from your paycheck up to 90 days before you filed for bankruptcy. An experienced bankruptcy attorney can recommend the best debt management strategy for your individual circumstances. This may include debt consolidation and management, debt settlement or bankruptcy.
A Texas Bankruptcy Attorney at Oliva Law can Help You Stop Wage Garnishments
Oliva Law has decades of experience helping clients in Brownsville, McAllen, Harlingen, Corpus Christi or anywhere in the Rio Grande Valley. Whether it’s alimony, credit card debt or student loans, we’re here to help you stop wage garnishment and get a fresh financial start. Call us (956) 683-7800 or contact us online today.