When you fall behind in your payments, a creditor or lien holder may obtain a judgment to seize your property or other assets. State laws governing the assets a creditor can seize differ. In Texas, your wages are exempt from garnishment for most types of debt. However, there are some situations in which your wages may be garnished.
About Lien Holders
A lien holder is a creditor whose debt is secured with collateral, such as your home or car. In most cases, a lien holder must sell the property you pledged as collateral to collect his debt. However, some states may allow a second lien holder to sue for a judgment to garnish your wages. Some states may also allow a first lien holder to sue if he sells your pledged collateral for its fair market value and isn't able to recover the full amount of the debt.
Texas Law
Texas law prohibits creditors from garnishing your wages for consumer debts, such as mortgages or credit cards. Since most lien holders represent consumer debt, they can't typically garnish your wages even if they are able to obtain judgments against you for unpaid debt. However, lien holders who obtain judgments can still remove money from your bank account or seize your other non-exempt assets.
Wage Garnishment Exceptions
Texas does allow garnishment of wages for specific debts. If you owe court-ordered child support or have unpaid taxes, your wages are subject to garnishment. Texas may also allow the garnishment of your wages to satisfy other government debts, such as unpaid student loans. However, creditors representing these debts aren't usually lien holders.
Considerations
Though Texas protects wages from garnishment in most situations, lien holders and other creditors who obtained judgments in other states may be able to garnish the wages you earn in Texas. Lien holders and other creditors who obtain judgments within Texas may also be able to garnish your wages if you earn income from another state. Certain types of federal income, such as Social Security benefits, are exempt from garnishment for consumer debts in all states.
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