Wage Garnishment Laws In Texas

[theresasix]

Does anybody know about garnishment laws in Texas? I have a friend who is being threatened by a collection agency from an old credit card account. They keep calling him and have told him that they can proceed to garnish his wages, but I thought that this was illegal in Texas since it is not child support, for the irs, or federal student loans. I would appreciate it, if somebody could help....thanks! [/b]

[NightStar]

TEXAS STATE LAWS *
http://www.capitol.state.tx.us/statutes/statutes.html

Interest Rate: Legal:6% with agreement can charge up to 18%. w/o agreement - statutory interest of 6% begins to run 30th day after becoming due Judgment:10% Always consult counsel to charge interest - Texas has very onerous usury laws & penalties.

Statute of Limitations
Open Acct:4
Written Contract:4
Domestic Judgment:10

Bad Check Laws (civil penalty): (Renewable) Foreign Judgment:10 (Renewable)

General Garnishment Exemptions: 100% of Wages

Dept Collection Laws
http://www.deanmalone.com/debt_index.htm

Attorney General http://www.oag.state.tx.us/index.shtml

Texas Finance Code http://www.capitol.state.tx.us/statutes ... 04.392.001
Also known as Texas FDCPA
Definitions of creditor, third party collectors, etc.
Bond requirement for third party debt collector
Must respond to dipute in 30 days
Can sue for injunctive relief and actual damages
Entitled to not less than $100 for each violation of chapter

Texas Secretary of State http://txsos-7.sos.state.tx.us/statdoc/index.shtml
To find out if CA is bonded, contact:
Legal Support Unit (512) 475-0775 Fax (512) 475-2815 or mail to
Legal Support Unit
Secretary of State
PO Box 12887
Austin, TX 78711-2887

Statute of Limitations http://www.capitol.state.tx.us/statutes ... 00toc.html

Judgements http://www.capitol.state.tx.us/statutes ... 00toc.html

Garnishment http://www.capitol.state.tx.us/statutes ... 00toc.html
Wages cannot be garnished.

Texas FCRA http://www.capitol.state.tx.us/statutes ... 00toc.html

Property Code http://www.capitol.state.tx.us/statutes ... 00toc.html

Exempt Property Under Texas Lawin plain language http://www.13network.com/HUPexemtptwo_new.html

Texas Property Exemptions http://www.texasbankruptcylaw.com/exemptions.html

How To Sue In Small Claims Court http://www.texasbar.com/public/consumer ... asp#court3
Great info on this site about Small Claims process!

Homestead is exempt property.
Most personal property up to $30,000 single and $60,000 for married couple is exempt.

Texas Bankruptcy Law http://www.texasbankruptcylaw.com/index.html

Texas Legislature Online http://www.capitol.state.tx.us/

Texas Judiciary Online http://www.courts.state.tx.us/

Small Claims Court http://www.capitol.state.tx.us/statutes ... 003.28.003
§ 28.003. Jurisdiction
(a) The small claims court has concurrent jurisdiction with the justice court in actions by any person for the recovery of money in which the amount involved, exclusive of costs, does not exceed $5,000.
(b) An action may not be brought in small claims court by:
(1) an assignee of the claim or other person seeking to bring an action on an assigned claim;
(2) a person primarily engaged in the business of lending money at interest; or
(3) a collection agency or collection agent.
(c) A person may be represented by an attorney in small claims court.
(d) This section does not prevent a legal heir from bringing an action on a claim or account otherwise within the jurisdiction of the court.

Texas Credit Laws http://www.occc.state.tx.us/pages/Legal ... aws_01.htm
Office of Consumer Credit Commisioner

Search for lawyers:

State Bar of Texas http://www.texasbar.com/public/findlawyer/lawyerref.asp

NACA http://naca.net/db.php3

Business and Commerce Code http://www.capitol.state.tx.us/statutes/bctoc.html

Texas Rules of Evidence http://www.courts.state.tx.us/publicinfo/TRE/Toc.htm

Rules of Judicial Administration http://www.supreme.courts.state.tx.us/r ... 0May00.htm

Arbitration: Wiping Out Consumers Rights? Artcle that explains arbitration clauses. http://www.texasbar.com/globals/tbj/oct01/fahmy.asp

Texas Deceptive Trade Practices Act http://www.texasbar.com/public/consumer ... r/dtpa.asp

Summary:
CA cannot sue in Small Claims, but you can sue CA in Small Claims.
SOL for credit cards is 4 years.
CA must be bonded and must respond to dispute in 30 days.
Generous exemptions: homestead, vehicle, personal items, and pets are exempt property (see statute for details).

Sorry for over kill, but this wraps quite a bit up into one spot for you. If this person is past 4 years of non-payment - most likely is out of SOL and if the CA tries to sue anyway - will want to present this as defense against them in court. Also read up on FDCPA to understand your rights in addition to what I have found.

[theresasix]

THANK YOU!!!!!!

[theresasix]

So the four years would be from his actual date of last payment? Is that the same as the "Date Reported" that shows up on his credit reports or is it the "Date Of Last Activity"? Also, if it is within the four years....they CAN file for a judgement to garnish wages? I'm sorry...I looked through the links that you sent me, but I think I may be a bit confused.

[NightStar]

Goes from the last activity date usually then add one month to get the 1st delinquency date. Then add 4 years for SOL.

Statute of limitations can only be renewed if agreement was signed in them 4 years to reset the clock. But if your friend has gone that long and not paid anything further then would be fine.

GENERAL GARNISHMENT EXEMPTIONS
100% of Wages

Honestly legal terms elude me, I am not sure what they mean for certain by this. - maybe get Sis in here to point this part out for you.

Date Reported - is just a note of when the collection agency last sent data to the CRA - nothing more to do with the account.

Yes, if your friend is still within 4 years - they can file a judgment - thus extending a new SOL for 10 years with 10% interest added. Just because a creditor gets a judgment does not mean that they will automatically pursue garnishment.

Should call your local court house to ask clerk what is proper service of a judgment for your state. And if served notice to appear - then by all means do so and put in your defense on this. You don't want to let them get away with a default judgment without putting up a fight.

[theresasix]

Hmmmmm....so they could still file a judgement against him for this account? Would it be just as a judgment that would not proceed to garnishment I guess? Again I am sorry for all the questions, but could you give me your opinion....would it be better for him to agree upon a settlement or a payment plan (his last current payment was October 1999 and his balance is now around $4000 with NCO in New York)? Or wait and see if they are really going to file something against him? I know it is hard to say, but we are really clueless about this situation. It does not involve me now, because it is all on my boyfriend, but we may marry in a couple of years and I don't want all this to affect my credit when that time comes. I just know that a judgement, lien, etc...looks really bad on credit reports versus just a collection account. Well, thanks for your help. I really appreciate it, and if anyone else has any additional advice or info on this topic or Texas collection laws in general...pleae let me know!

[NightStar]

Ok, his credit will not affect yours at all - only time that happens is if you had a joint account / co-signed account together. But if this is solely his that is all there is to it.

Judgment & lien are 2 different things here, does he own property? A lien is put against property and these have different rules if so.

Judgment if filed will stay on credit report 7 years from file date. They may try for garnishment, just no way of knowing on company to the next. I do know that NCO is one of the upper dog collection agencies that people fight with. I have not made a practice in the past of following their MO of how they do things. Sis might be of more help here, or we can point you in a direction to learn more about this company.

You will need to look them up to see if they are licensed in your state. Here is a site for looking up public records information for your area:

http://www.searchsystems.net/

I did not see a listing for collection agency licenses here though. I am going to look for someone I know that may be of help here. At this point I know I have pulled in about everything you need, just now a matter of making sense of it.

[sisflomi]

What the garnishment law means is they can not garnish wages in Texas. Read how the title states Garnishment Exemptions, that means how much of the wages are exempt from garnishment.

They could get a judgment, but they can't go after wages. If you look up the bankruptcy exemptions that will pretty much tell you what property is exempt from judgments too. Like unemployement, social security wages, so much of your home value, things like that.

They may be able to get a freeze on the bank accounts or even a lien on property, things like that. But not on wages.

[theresasix]

Thanks for your help Sis! Since he doesn't own a home...there really is no property. The only thing he owns is a car, and that wasn't with the credit card that went to collections. Will they just file a judgment for cash payment or settlement? I guess what I am asking is, if they file a judgment, will the main effect towards his credit be that this collection (which is now around 3 years old and would be removed in another 4) will be on his reports for another 7 when filed? Should he go ahead and try to settle before a judgment happens? We were not sure because they are VERY rude, and call ALL THE TIME on his cell phone at work. We were concerned about garnishment because they threatened him that garnishment of wages was what was going to happen if he doesn't pay even though we heard otherwise (Texas). They have done a couple of things against the FCRA previously and this wages threat really set off red flags to me.

[sisflomi]

Thanks for your help Sis!
No problem
Since he doesn't own a home...there really is no property. The only thing he owns is a car, and that wasn't with the credit card that went to collections.

In some states they could put a lien on the car. Just have to look up your state laws on exemptions

Will they just file a judgment for cash payment or settlement? I guess what I am asking is, if they file a judgment, will the main effect towards his credit be that this collection (which is now around 3 years old and would be removed in another 4) will be on his reports for another 7 when filed?

A judgment will be found by the credit bureaus from a 3rd party, the ca can only report the collection part, not the actual judgment. The judgment will report for 7 years from the date filed. What the CA could do is add a new collection account for the judment amount. With a new public record and a new collection, it will kill the score for a while.

Should he go ahead and try to settle before a judgment happens? We were not sure because they are VERY rude, and call ALL THE TIME on his cell phone at work.
Its a violation to call him on his cell phone, what you can do is send them a limited c&d order to stop the phone calls. I think there is one at my site linked below my sig area.

First before he settles I would look and see just when it was last paid and if the SOL is up or not on the account. If it is up, I would use the information to my advantage. If it is not past SOL I would look to settle this with them. I would not settle on their terms though, they sound as if they are game players trying to scare your friend and thats not to be tolorated.

We were concerned about garnishment because they threatened him that garnishment of wages was what was going to happen if he doesn't pay even though we heard otherwise (Texas). They have done a couple of things against the FCRA previously and this wages threat really set off red flags to me.

Its also a violation to threaten a debtor with something that could not possibly happen. Texas has their own debt collection laws and they could really be in some big trouble if you pursue it.

[theresasix]

Thanks Sis....and if you have any free time, I would like for you to read my last post on the subject of "Collection Account Help" because it applies to both you and Nightstar. Not that I am too lazy to write it here, but I don't want to post the same thing everywhere!

[theresasix]

Oops...one more question. If it HAS been over 4 years so the SOL applies, can they still file a judgment or are they pretty much SOL - the other version....S#@T OUT OF LUCK

[sisflomi]

Already done!!!

[sisflomi]

Yes, they can still file a law suit. If they do then you have the defense of the debt being time barred. You don't want to ignore this, it will cause you to have a default judgment, and that is not good.

There is a guy that goes by the name of Whychat, he has a lot of info on how to answer a summons for debts past SOL. Let me know if you need the llink to his info.

[theresasix]

That would be great...every little thing helps.

[sisflomi]

Here is the link.

http://community-2.webtv.net/YCHANGE/STORAGE/page2.html

You can find most letters that you need at my web site.

[Pale Rider]

theresasix,

Was the last payment in Oct 99, or is that when the account went into default? I have not found definite answer on payment extending SOL in Texas, but I am pretty sure it doesn't. So this account would be past SOL if the account went into default on that date, or that was his last payment.

My personal experience has been that CA's don't sue that often in Texas because of the garnishment and personal property statutes. Unless they did it jsut to vengeful, they wouldn't get much else.

[NightStar]

That is what I was hoping - that this is out of SOL -

Nice to see you over this way Pale Rider!

[JediKnight]

I need some help. I just received a phone call from an attorney threatening to gaarnish my wages. I live in Texas, where it is exempt. The amount they are after is $3500 roughly. Not that I don't want to pay it, but I've had to take loans out from a local (rural) bank to cover mortgage and car payments for my ex-wife for the past year. Now, the lawyer is getting snotty and threatening to have a judgement issued within 72 hours and saying my wages can be garnished. Everything I have read leads me to believe that they really can't do anything except give me a bad credit rating. Can someone PLEASE help me understand all this in plain English? Thanks!

[theresasix]

Hey JediKnight,
I would recommend specifically looking for NightStar or SisFlomi. They are the true experts around here that have ALOT of knowledge on garnishment laws, etc... They have helped me out tremendously.

Until then, check out some of the links that are in this thread on laws for both Texas and in general. They might help you understand everything a little bit better as it is confusing! Good Luck

[Pale Rider]

Wages are 100% exempt in Texas. Here are some links to the statutes

http://www.capitol.state.tx.us/statutes ... 00toc.html

§ 63.004. Current Wages Exempt

Except as otherwise provided by state or federal law, current wages for personal service are not subject to garnishment. The garnishee shall be discharged from the garnishment as to any debt to the defendant for current wages.

Personal Property Exemptions for Texas

http://www.capitol.state.tx.us/statutes ... 0.html#top

§ 42.001. Personal Property Exemption

(a) Personal property, as described in Section 42.002, is exempt from garnishment, attachment, execution, or other seizure if:

(1) the property is provided for a family and has an aggregate fair market value of not more than $60,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property; or

(2) the property is owned by a single adult, who is not a member of a family, and has an aggregate fair market value of not more than $30,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property.

(b) The following personal property is exempt from seizure and is not included in the aggregate limitations prescribed by Subsection (a):

(1) current wages for personal services, except for the enforcement of court-ordered child support payments;

(2) professionally prescribed health aids of a debtor or a dependent of a debtor; and

(3) alimony, support, or separate maintenance received or to be received by the debtor for the support of the debtor or a dependent of the debtor.

(c) This section does not prevent seizure by a secured creditor with a contractual landlord's lien or other security in the property to be seized.

(d) Unpaid commissions for personal services not to exceed 25 percent of the aggregate limitations prescribed by Subsection (a) are exempt from seizure and are included in the aggregate.


Here is a link to Finance Chapter 392 similar to FDCPA

http://www.capitol.state.tx.us/statutes ... 00toc.html

They can sue, but they will not be able to garnish your wages or take any personal property.

Have you sent a debt validation letter to the lawyer or collection agency? If they have not reported this the the credit reporting agencies yet, they cannot until they validate the debt. They must cease all collection activity until the debt is properly validated, including collection letters, reporting to credit bureau, and filing lawsuit.

[NightStar]

Actually locating Pale here was the best thing you could do with his knowledge on Texas and law!

Extra help always appriciated, Pale here has a talent for an area that just eludes me.

[theresasix]

Thanks Pale Rider...sorry...I forgot to put your name in there too

[Confused & Concerned]

I have reviewed all the statutes discussed in the string and am concerned that if the creditor obtains a judgment in a state ourside Texas-for example, in a state where garnishment is legal...that creditor can get their judgment recognized in Texas under the full faith and credit of judgments provision of Texas law and CAN garnish wages. If I am wrong, please tell me where to find the statute that says otherwise. Case law appears to permit garnishment in Texas when it was obtained in a state where garnishment was legal.
Thanks.

[Pale Rider]

Generally, the debt collector must sue in state where you reside or signed the contract.

From the FDCPA

§ 811. Legal actions by debt collectors [15 USC 1692i]

(a) Any debt collector who brings any legal action on a debt against any consumer shall --

(1) in the case of an action to enforce an interest in real property securing the consumer's obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or

(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity --

(A) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the commencement of the action.

(b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt collectors.

Unless they got the judgment before you moved to Texas, I think you would easily be able to change the court to one of competent jurisdiction where you live.

[billiedean]

I've read through some of the links posted here and have a few questions. I had a CC company file a judgment on me about a year ago. On Friday I received a notice from them requesting information regarding my bank accounts, employment, property values, etc. My questions are:

1) My husband purchased our house before we married. Because Texas is a community property state, is this house at the mercy of my debtors?

2) We purchased an 1 1/2 acre lot next door to our house since we've been married. It's valued at about $45K. Is that at the mercy of my debtors?

Thanks!

[beyond platinum]

Under Texas law the house appears to be defined as separate property because it was acquired before marriage. If you are asking if they could put a lien on your land instead, that possibility exists. Since they are attempting to enforce a judgment on you, it would be best to seek the consultation of an attorney who specializes in this area. Another option is that you can try to work out a payment plan with them to avoid any further legal action.

[Pale Rider]

Billiedean,

If the house is a homestead, I don't think they can touch it.

Here is a good article on property exemptions in TX.

http://www.13network.com/HUPexemptproperty05.pdf

About the only thing they could possibly do is go after your bank accounts, if the funds are not from exempt source such as disability or social security. But, you could close them.

Check with a lawyer to be sure, as suggested above.

[NightStar]

Hello, great to see you around Pale Rider, been a while since we have seen you this way. Happy New Year

[GoingDown]

Statute of Limitations
Open Acct:4
Written Contract:4
Domestic Judgment:10

Bad Check Laws (civil penalty): (Renewable) Foreign Judgment:10 (Renewable)

General Garnishment Exemptions: 100% of Wages



Garnishment http://www.capitol.state.tx.us/statutes ... 00toc.html
Wages cannot be garnished.

Sh*t! Wages can't be garnished in Texas, and the statute of limitations runs out completely after ten years and can't be renewed?! I need to move to Texas! Arizona sucks!

[Pale Rider]

Actually, there are some rare cases where wages can be garnished in Texas. I wrote about this on another site.

--------------------------------------------------------

I always thought the simple answer to that question was no, based on the following Texas statute:

§ 63.004. CURRENT WAGES EXEMPT. Except as otherwise provided by state or federal law, current wages for personal service are not subject to garnishment. The garnishee shall be discharged from the garnishment as to any debt to the defendant for current wages.

http://www.capitol.state.tx.us/statutes/docs/CP/content/htm/cp.003.00.000063.00.htm#63.001.00

But, while trying to help someone with a problem I came across information that would allow for wage garnishment under certain conditions.

Hypothetical: Consumer defaults on debt and has a judgment against them in one state, then later moves to Texas. The consumer now works for a company with headquarters in a third state. The creditor/collector files paperwork with the employer to have the consumers wages garnished.

There are several cases that address this issue. “Following a line of cases, the Texas Appellate Court found that Texas could not deny full faith and credit to another state’s Judgment merely on the grounds that enforcement of it might offend public policy in Texas. To support this, the Court cited the LeFevre case.”

http://www.ilcba.org/newsletters/MAY2001ICBA_Newsletter.pdf See the article titled A Texas Garnishment

See also, e.g., Bard v. Charles R. Myers Ins. Agency, Inc., 839 S.W.2d 791, 794 (Tex. 1992); Bergman v. Bergman, 888 S.W.2d 580, 583 (Tex. Ct. App. 1994); Knighton v. IBM Corp., 856 S.W.2d 206 (Tex. Ct. App. 1993); Texaco, Inc. v. LeFevre, 510 S.W.2d 173, 176 (Tex. Civ. App. 1980).

This would be a rare situation, but one that should be prepared for if necessary.

------------------------------------------------------------

Another consideration is if they got a default judgment in another state.

I would argue that you were not properly served (if that was the case), and you were unable to defend yourself because of a distant forum.

There are cases that argue both for and against Texas upholding a default judgment from another state. Read the text below carefully. You may be able to use the cases that do not allow for a default judgment to be valid in Texas. The lawyer may find the cases that support the other position, but it is worth a shot.

Once the plaintiff introduces a properly authenticated copy of the sister-state judgment, he creates a prima facie case of the validity of the judgment, and the burden shifts to the defendant to disprove its validity.

Mitchim v. Mitchim, 518 S.W.2d 362, 364 (Tex. 1975); Knighton v. International Business Machines Corp., 856 S.W.2d 206, 209 (Tex. App.—Houston [1st Dist.] 1993, writ denied).

There is a split in the courts of appeals about whether this presumption applies to a default judgment taken in the sister state. Cases holding that the presumption exists include Cash Register Sales & Services of Houston, Inc. v. Copelco Capital, Inc., 62 S.W.3d 278, 280 (Tex. App.—Houston [1st Dist.] 2001, no pet.); Minuteman Press International, Inc. v. Sparks, 782 S.W.2d 339, 342 (Tex. App.—Fort Worth 1989, no writ); First National Bank v. Rector, 710 S.W.2d 100, 103 (Tex. App.—Austin 1986, writ ref’d n.r.e.); Hart v. Calkins Manufacturing, Inc., 623 S.W.2d 451, 452 (Tex. App.—Texarkana 1981, no writ).

Cases holding that a default judgment is not entitled to the presumption of validity include Jackson v. Randall, 544 S.W.2d 439, 441 (Tex. Civ. App.—Texarkana 1976, no writ); Country Clubs, Inc. v. Ward, 461 S.W.2d 651, 652 (Tex. Civ. App.—Dallas 1970, writ ref’d n.r.e.).

[txQT]

Statute of Limitations
Open Acct:4
Written Contract:4
Domestic Judgment:10

Bad Check Laws (civil penalty): (Renewable) Foreign Judgment:10 (Renewable)

General Garnishment Exemptions: 100% of Wages



Garnishment http://www.capitol.state.tx.us/statutes ... 00toc.html
Wages cannot be garnished.

Sh*t! Wages can't be garnished in Texas, and the statute of limitations runs out completely after ten years and can't be renewed?! I need to move to Texas! Arizona sucks!

so are you saying tha after 10 yrs the accnt can't be renewed? can you please look at this tradeline and let me know what I should do? I opened the accnt in 1994 and it's showing a recent payment of $40 but I NEVER made this payment! The last report date is 2004, so what shoudl I do?

GRDN/CBUSA
Address:
PO BOX 9714
GRAY, TN 37615
No phone number available


Status:
Account charged off. $543 written off. $543 past due as of Jul 2004.



Date Opened:
10/1994
Type:
Revolving
Credit Limit:
$543

Date of Status:
07/2004 Terms:
NA High Balance:
$543

Reported Since:
07/2004 Monthly Payment:
$0 Recent Balance:
$543

Last Reported Date:
07/2004 Responsibility:
Individual

Recent Payment:
$40



Your Statement:
NA



Account History:
Charge Off as of Jul 2004

[NightStar]

July 2004 shows when the account charged off, so the statute of limitation would expire 4 years making it July 2008 when the statute of limitations will expire. This is an open end account not a judgement.

They have 2 more years left to file a judgement if that is what they want, then once the judgement is filed there is a 10 years statute of limitations.

[Pale Rider]

The debtor’s acknowledgment of a debt barred by limitations will not revive the debt unless the acknowledgment is in writing and signed by the debtor. Tex. Civ. Prac. & Rem. Code Ann. § 16.065 (Vernon 1997). Mere payment by itself does not interrupt the running of the statute of limitations or acknowledge the justness of the debt with an implicit promise to pay. Siegel v. McGavock Drilling Co., 530 S.W.2d 894, 896 (Tex. Civ. App.—Amarillo 1975, writ ref’d n.r.e.).

The small payment may be a trick by the collector to reage the account.

In Texas, the SOL starts when the casue of action is accrued. In other words, at default.