If you owe money to a debt collector, the federal government, or another financial institution, the last thing you want is for them to take the money directly from your bank account. However, debt collectors may garnish your bank accounts in Texas under certain circumstances. Bank account garnishments can cause significant stress and make it nearly impossible to pay your regular bills.
Debtors can wake up one day to find their bank accounts frozen, a long time after the debt collection lawsuit began. The most important thing with frozen bank accounts is to act fast. You may have time to recover some funds in your accounts before the Writ of Garnishment is finalized and your bank pays the creditors. Hiring an experienced debt collection attorney is the best way to protect your rights in these situations.
Ronald Arthur Stearns Sr. PLLC
Ronald Arthur Stearns Sr. PLLC helps Texas citizens manage debt and prevent wage and bank account garnishment. With over 26 years of experience, he has a deep understanding of local and federal tax and debt collection laws. If you have unsecured debt, he will help you set up a payment plan and negotiate with creditors to prevent bank account garnishment.
The attorney-client relationship is a top priority for Ronald Arthur Stearns Sr. PLLC. We know how important it is to protect your legal rights while ensuring you are fully informed throughout the legal process. Debt collectors often use unfair methods to recover debt from Texas citizens, and our job is to fight against these unfair practices. We do not want you to be in financial hardship, and we will fight aggressively to prevent this.
Call our law firm today at 210-853-2135 to schedule a consultation with a Texas lawyer.
Bank Account Garnishment in Texas
When you owe money to a debt collector, they can file a lawsuit against you or your bank to recover the debt. If a judgment is issued against you, they can garnish any funds you have in your bank account by placing a bank levy on your account. Collectors can target any bank account that you have, including your personal checking account, savings account, and an account that you share with another person.
There are some exemptions with bank account garnishment, including social security, disability allowance, retirement accounts, student loan disbursements, FEMA aid, and veterans’ benefits. However, excess social security funds that you have in your accounts are not protected from garnishment. The protection limit is usually 2.5 the monthly social security payment.
Bank levies can place a huge financial strain on people. There is no limit on how much a debt collector can take from your account each month, and the levy can be placed indefinitely until the debt is paid. As a result, people can lose their entire savings, personal funds, and the income they earn each month to a debt collector for unpaid debt.
Bank Account Garnishment Process in Texas
To start the garnishment process, a judgment creditor must bring a new lawsuit for a debt against your bank or financial institution. When your bank receives notice of this Writ of Garnishment, they must respond to the judgment. The person subject to the debt will be charged for all fees related to the judgment, including court costs.
Your bank will then freeze your accounts for a period until the courts order them to pay the debt. During this time, you cannot access any funds in your bank account, including incoming wages. It is possible to challenge the Writ of Garnishment during this time to prevent the money from being taken from your accounts.
However, once the writ is finalized and your bank information must be furnished, creditors can begin taking money out of your accounts. Once money has been taken from your accounts, it is extremely difficult to get it back and to get the judgment reversed.
Reasons For Bank Garnishment in Texas
To garnish a bank account in Texas, a collector must have a valid reason that is permitted under law. Some of the most common reasons for bank account garnishment in Texas include:
- Private debt – Credit card debt, medical debt, commercial debt, and debt owed to any private institution can lead to bank account garnishment. Because banks, credit unions, peer-to-peer lenders, and other creditors cannot garnish your wages, they will fight for bank account garnishment.
- Unpaid taxes – State tax agencies must apply to the court for a Writ of Garnishment against a person’s bank accounts. However, federal agencies can take money from your account without court approval.
- Student loans – Student debt is a major problem in Texas and throughout the entire country. Most of the time, collectors will seek wage garnishment to recover student debt. However, they may garnish a person’s bank account if their wages cannot be garnished.
Sometimes, bank account garnishment can be used for property debt. However, usually, when debt is backed by collateral, like real property, the collector will turn to the property first for payment. Collectors and creditors cannot, however, place a lien on a property that is considered your primary residence in Texas, unless you owe a debt for your mortgage, home equity payment, or property taxes.
Texas Law on Wage Garnishment
Wage garnishment is a court order from a creditor requesting an unpaid debt to be taken from a person’s paycheck each month. Wage garnishments must be issued by courts in most cases and are sent directly to the debtor’s employer. Texas law on wage garnishment is strict. A third-party debt collector or creditor for most consumer debts cannot get a wage garnishment order.
Wage garnishments can be issued for unpaid taxes, child support payments, federal debts, student loans, and spousal support. However, the Texas Property Code provides that for medical bills, personal property debt, and other civil debt, wage garnishment is not permitted.
With wage garnishments, the funds are withheld from your bank account each month. The funds are not taken directly from your bank account, but from your paycheck issued by your employer. Your employer must deduct the amount each month and send this to the debt collector or creditor.
The amount that can be garnished from your wages each month is limited. The courts will consider the number of dependents you have and the type of debt that you owe. There are federal law limits on wage garnishment in place which prevent debtors from suffering financial hardship because of having their wages garnished. The federal limit is 25% of your net earnings or 30 times the minimum wage.
Can Debt Collectors Garnish My Wages?
Debt collectors in Texas cannot garnish your wages for commercial debt, such as credit card debt or medical bills. However, once the wages go into your account, collectors can request a levy be placed on your bank account. This way, they can garnish directly from your bank account rather than incoming wages.
If a debt collector places a levy on your bank account, your employer will not be notified. Your bank will receive the judgment and the Writ of Garnishment. Your wages will still enter your bank account and cannot be directly affected by private debt collectors.
Becoming Judgment Proof in Texas
Some people can become judgment-proof in Texas, so their property and income cannot be seized to pay back debts. If you do not own any property apart from exempt property, like your primary home and vehicle, or if your income is exempt from garnishment, then you may become judgment-proof.
If your financial situation improves, the collectors can come after you again to recover the debt. However, if your financial situation remains the same or worsens, you are generally safe from having your accounts garnished for ten years.
If you believe you are judgment-proof, speak about your situation with an experienced debt attorney. They can help assess whether you are considered judgment-proof and help you come up with a plan to secure your assets.
Can They Garnish My Bank Account in Texas?
Although your wages are protected from private debt collectors in Texas, unfortunately, your bank accounts are not. Creditors, state agencies, and the federal government can place levies on your bank accounts to recover debt and overdue taxes. There is no limit on the amount of money that can be taken from your accounts each month, and you could be left in a very difficult financial situation.
If you owe money to a creditor or the government, speak with an attorney immediately to avoid having your bank accounts garnished. An attorney can help you set up a payment plan for the money that you owe or come to a solution to avoid you losing all of your assets and savings. If you need to file for bankruptcy to avoid bank account garnishment, they can help you with this process.
Contact Ronald Arthur Stearns Sr. PLLC!
Ronald Arthur Stearns Sr. PLLC has the experience and skills that you need to fight against creditors in Texas. He has been helping Texas citizens for over 26 years and he has an in-depth knowledge of local debt laws and regulations. Ronald Arthur Stearns Sr. PLLC has never represented the IRS, and he is fully committed to protecting the rights of taxpayers.
On top of his significant experience helping taxpayers in Texas, he has recognitions from the American Bar Association and the State Bar of Texas. His attorney-client relationship is a top priority, and he wants to get the best possible outcome for your case.
If a debt collector wins a judgment against you, you risk losing all of your savings and income that you have accrued in your accounts. With bank account garnishment, you will struggle to pay bills, save for the future, and make ends meet. Hiring Ronald Arthur Stearns Sr. PLLC is the best way to prevent a dire financial situation and help protect your best interests.
Call our law firm today to arrange a consultation at 210-853-2135.