Garnishment: A Creditor’s Perspective on Recovering Debts
Garnishment is the legal process of withholding an individual’s earnings to satisfy a debt obligation. As a former debtor’s attorney with over 25 years of experience, having filed more than 4,000 Chapter 7 and Chapter 13 consumer bankruptcies, I now focus on representing creditors seeking to recover what they are rightfully owed from Texas debtors.
Understanding Garnishment in Texas
In Texas, garnishment is only allowed under specific circumstances, as state laws provide strong protections for debtors. However, creditors can still pursue garnishment under certain legal grounds:
- Child Support
- Alimony
- IRS Debt and Student Loans – Federal law permits garnishment for these obligations
- Garnishment by Another State’s Judgment – A judgment obtained in another state may be enforceable if the debtor has since moved to Texas
Garnishment Thresholds
There are strict limits on the amount that can be garnished from a debtor’s wages, with deductions taken from their disposable income. Disposable income is the remaining income after legally required paycheck deductions.
- IRS debt and student loans: Up to 25% of disposable income or the amount exceeding 30 times the federal minimum wage, whichever is lesser.
- Child support and alimony: Garnishment can be as high as 60%, depending on the debtor’s obligations:
- If the debtor supports another child or spouse, garnishment is capped at 50%.
- If the debtor does not support another child or spouse, garnishment is capped at 60%.
- If the debtor is more than 12 weeks behind on child support, an additional 5% may be garnished.
The Garnishment Process: How Creditors Can Recover Debts
For a creditor to secure garnishment, they must obtain a court judgment confirming that the debtor owes a debt and has failed to pay. The process typically involves the following steps:
- Court Application: The creditor files a written request with the court, stating that a valid judgment exists, the debtor has not made the required payment, and a third party (the garnishee) holds funds owed to the debtor.
- Judicial Review: The court verifies the facts, ensuring that the judgment is valid and that garnishment is necessary to satisfy the debt.
- Garnishment Order: If approved, the court orders garnishment, directing the garnishee (e.g., an employer) to withhold funds from the debtor’s earnings.
Special Considerations for Tax Debt and Child Support
- Federal Tax Debt: The IRS follows a strict procedure, issuing multiple notices before garnishing wages. The final stage includes a Final Notice of Intent to Levy and a 30-day Notice of Intent to Levy Wages, which provides the debtor with the right to request a hearing.
- Child Support Orders: Wage withholding orders are typically included as part of the child support order. If the debtor owes back child support, a 30-day Notice of Intent to Garnish Wages must be issued before garnishment begins.
Protecting Creditors’ Rights in Texas
While Texas law restricts garnishment in many cases, creditors still have legal avenues to recover debts through alternative means, including liens, levies, and seizing non-exempt assets. As a creditor’s attorney, I assist businesses, lenders, and individuals in navigating these complex legal processes to secure what they are owed.
For more information on how we can help enforce your rights as a creditor, contact us at (713) 974-1151 or email [email protected] to schedule a consultation.
