If you face debt collection in Texas, you must understand your rights and options. Working with a reputable credit repair company in El Paso, Texas can help you navigate the complexities of debt collection and develop a strategy to address your outstanding debts.
In this article, we’ll explore the laws surrounding debt collection in Texas. The Fair Debt Collection Practices Act in Texas has shaped the debt collection systems in The Lone Star State. The statute of limitations on debt in Texas discusses the legal requirements that must be met for a creditor or debt collector to initiate wage garnishment. If you’re ready to feel empowered about your financial future, read on.
When Is Wage Garnishment Allowed?
In Texas, wage garnishment is permitted when an individual has failed to repay certain debts. The most common situations where wage garnishment can occur include unpaid taxes, student loans, and child support. But specific legal requirements must be met for a creditor or debt collector to initiate wage garnishment.
Unpaid Taxes
For unpaid taxes, the Internal Revenue Service (IRS) can garnish wages without a court order. But they must first provide written notice to the individual, allowing them to contest the debt or make repayment arrangements.
The IRS can garnish up to 15% of an individual’s disposable income, which is the income after taxes and other mandatory deductions.
Student Loans
Regarding student loans, the Department of Education can also garnish wages without a court order. They must also provide written notice to the individual, allowing them to contest the debt or make repayment arrangements, much like with unpaid taxes.
The Department of Education can garnish up to 15% of an individual’s disposable income (see above), or the amount by which their income exceeds thirty times the federal minimum wage, whichever is less.
Spousal and Child Support
In spousal or child support cases, wage garnishment can be initiated by either the Texas Attorney General’s Office or a private attorney representing the spouse or custodial parent. To initiate wage garnishment, the spouse/custodial parent must first obtain a court order mandating support payment.
Once the court order is obtained, the employer must withhold a portion of the non-custodial parent’s income and send it directly to the custodial parent.
Limitations
Without a court order, wage garnishment can’t be initiated for other types of debts, such as credit card debt or medical bills. If a creditor or debt collector wishes to garnish wages for these types of debts, they must first obtain a judgment in court. Once the judgment has been obtained, the creditor can request the court issue an order for writ of garnishment.
A writ of garnishment is when collectors or creditors have the legal right to freeze your assets and seize the amount necessary to repay the unpaid debt. This differs from garnishing wages as it garnishes current funds and assets, rather than income.
Final Thoughts
If you face wage garnishment in Texas, you must understand your rights and the options available. Working with a reputable credit repair company can help you negotiate with creditors and develop a plan for debt repayment.
At The Phenix Group, our experienced professionals are dedicated to helping you achieve financial freedom and overcome debt collection challenges. Contact us today to learn more about our services and how we can help you!