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Using Bankruptcy to Stop or Prevent Wage Garnishment

Posted By Allmand Law Firm, PLLC || 5-Mar-2014

The state of Texas, along with a few other states, may not allow creditors to garnish wages to satisfy debts, except for special circumstances such as spousal/child support, student loans and federal taxes. A wage garnishment is when a creditor receives permission from the court to withhold payment from paycheck earnings and have them forwarded to the creditor instead. Yet, if garnishment of your wages has yet to start, or you think creditors may seek another way to seize assets, you may want to consider how bankruptcy can help.

States that allow wage garnishment have limitations to follow under federal law. This means creditors should not be garnishing more than a certain amount they are allowed. Again, if you default on a student loan or owe back taxes, wage garnishment is a possibility when you fail to act on a lawsuit or summons received. Garnishments can consume a considerable amount of your income depending on the reason for it. Up to 50 percent of disposable income in Texas, for example, may be garnished for child support obligations.

There are points to consider with wage garnishment that debtors may not be aware of. If your employer is located in another state that allows garnishments, creditors may have a right to enforce a garnishment. Your bank account may be subject to garnishment if wage garnishment is not available. If wage garnishment is a possibility you should review your options with a reputable bankruptcy attorney.

Reference: http://www.txbankruptcyblog.com/2014/02/articles/bankruptcy-news/wage-garnishment-in-texas/

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