Can Wages Be Garnished in the State of Texas for Nonpayment of a Debt?

If you are a Texas resident and you have failed to make payments as agreed on a debt, your creditor may file a lawsuit against you in a Texas court. Unless you can demonstrate that the creditor filed the lawsuit wrongfully or that you paid the debt, the court will grant a judgment to the creditor. But In most cases, a judgment creditor in Texas cannot garnish your wages.

Prohibition of Wage Garnishment

Texas is one of only four states -- South Carolina, Pennsylvania and North Carolina are the others -- that do not permit garnishment for private debts. Texas law only permits garnishment of wages for debts involving unpaid child support and student loans. This means that if you only earn income through traditional employment in Texas, the creditor cannot get a court to order your employer to withhold any portion of your income to pay toward the judgment debt.

Redomestication of Judgment

Although a creditor with a valid Texas judgment typically cannot garnish your wages, Texas case law provides an alternative strategy for creditors to execute a wage garnishment in limited circumstances. If you live in Texas but derive wages from employment in another state, the judgment creditor may pursue redomestication of the judgment to the state where you are employed. If the creditor's efforts are successful, it may execute a wage garnishment order under the laws of your employer's state.

Other Income and Assets

Texas law permits garnishment of certain non-wage income to satisfy your judgment debt. If you receive income from rental properties you own, royalty agreements with book publishers or other income such as earnings derived from self-employment, the creditor may garnish these funds. A creditor can also garnish funds held in Texas bank accounts you own. However, it may not garnish income derived from Social Security benefits, worker's compensation, insurance proceeds, unemployment benefits or government employee pensions.

Considerations

A Texas judgment for an unpaid debt can significantly lower your credit score, decreasing your ability to obtain loans and credit cards in the future. Regardless of whether you pay the judgment amount, the judgment will stay on your credit report for seven years. The impact on your credit score depends on the presence of other negative entries in your credit file; however, a judgment will typically cause more credit damage than a missed debt payment.