A wage garnishment is any legal procedure where a portion of an employee’s salary or wage is required to be withheld by an employer for the payment of that employee’s debt. Wage garnishment can include IRS or state tax and writs issued by a court for debts that are not paid by the employee. The employer has the obligation to withhold the amounts to be paid for these debts. Texas uses the Title III of the Consumer Credit Protection Act for the definition of earnings to determine which earnings are subject to garnishment limits, however, Texas garnishment laws protect the employee’s disposable income more than the Consumer Credit Protection Act’s withholding limits.
The Texas child support garnishment limits are more favorable to employees than in other states. The Texas garnishment limits can never be exceeded no matter how many orders an employee is expected to pay. Thus, the employer is expected to allocate current support so as to ensure each order is paid at a percentage of the employee’s disposable income within the withholding limits.
While all forms of income are subject to Texas child support garnishment, any income defined as earnings by the Consumer Credit Protection Act is protected by a withholding limit. According to the Consumer Credit Protection Act, earnings are defined as any income that is paid or payable to an individual for personal services rendered. Disposable income is the amount left after the deductions required by the law as well as union dues, medical, hospitalization and disability insurance coverage. Texas garnishment laws stipulate that the employer is legally obligated to withhold a maximum of 50% of an employee’s disposable income.
What falls into the 50% withheld disposable income? In short everything; this includes the following:
1. Lump sum payments
2. Child support
3. Spousal support
4. Any writs ordering garnishment
This then begs the question as to in what order of preference are withheld amounts made or calculated. If an employer is assigned more than one writ of withholding for one employee; Texas law requires the employer to make equal amounts of payment for each writ until the writs are fully paid. If there are available disposable earnings left after the writ payments equal amounts must be paid to spousal maintenance orders, child support arrears and spousal support arrears. This does not change whether the employee is supposed to pay more than one support order.
With regards to priority, child support Houston, Texas takes priority over any other state issued documents. However, they come second to IRS levies, but can be negotiated in some circumstances so child support then takes preference. Legislation put in place from October 17, 2005 outlines that support orders take priority over Chapter 13 bankruptcy repayments. Child support also falls in the category of debts that cannot be discharged in filing bankruptcy.
It must be noted that despite an employee being required to pay more than one support order, the employer should never withhold more than the maximum outlined by Texas laws of 50% of the employee’s disposable income.
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