What Income Is Exempt in Texas From Unsecured Debt?

If you fell behind on your payments of unsecured debt, such as credit cards, and your creditor has sued you and won, you now have a judgment against you, which gives your creditor more avenues to collect the debt you owe. In many states, creditors can freeze your bank accounts, seize your property and garnish your wages. In Texas, creditors have fewer options available to them for collection, and some income is exempted by federal law.

Judgment Process

In Texas, as in all other states, a creditor must first sue you in court to prove that you owe the debt before he can take further action to collect it. Once he is awarded a judgment against you, he can further pursue you in court to collect that judgment from any assets you have, such as property, bank accounts or financial instruments like stocks and bonds. Texas, unlike most states, will not allow a creditor to garnish your wages for unsecured debt.

Exempt Income

In accordance with federal law, certain income cannot be garnished or seized from a bank account in Texas, or any other state. Exempted by law from bank seizures are Railroad Retirement benefits, Social Security benefits, military pensions and survivor's benefits, civil service and federal retirement pensions, VA benefits, Supplemental Security Income, student aid, Merchant Seaman's Wages, Longshoreman's and Harbor Workers' Death and Disability benefits, FEMA disaster relief and compensation for employees of U.S. contractors overseas for death, disability or detention.

Property

If you lose the court case, the court cannot compel you to pay the judgment if you don't have the money and it cannot send you to jail for non-payment. However, the creditor does have a right to serve you with a discovery of assets form, which you must complete or face a contempt of court order, for which you can be jailed. A discovery of assets form requires that you list your assets in response to questions posed by the creditor. Depending on the assets, the creditor can then request that a judge order you to turn them over to the creditor to satisfy your debt. In Texas, your creditor cannot take your car, home or your household goods.

Exceptions

There are certain exceptions to the federal income exemptions. If you owe back child support, back federal taxes or student loans, your federal benefits may have payments deducted before you receive your check to ensure these debts are paid. The federal government does not have to go to court to do this. You can appeal their decision.