Houston Wage Garnishment Attorney
When a person has their wages garnished for any reason, the impact is often felt right away. People suddenly get far less of their paychecks than they anticipated and the problems created by wage garnishment tend to create even more issues.
There can be a number of challenges involved in fighting wage garnishments, and it can take several months to overcome some issues before a person can have their regular pay fully restored. Many people do not have the time and patience needed to overcome these kinds of obstacles.
“At The Sparrow Law Firm we recognize that
each case is uniquely different.”
If you are currently suffering because wage garnishments in the Houston area, you may want to explore the possible benefits of filing Chapter 7 or Chapter 13 bankruptcy. The Sparrow Law Firm can assist you in determining the best possible path forward.
Our firm has helped hundreds of clients all over Texas get the needed bankruptcy protection to deal with wage garnishments. Call 281-973-0431 or contact us online to have our firm examine your case and discuss all of your legal options with you during a free consultation.
Types of Wage Garnishments
The Consumer Credit Protection Act (CCPA) is a federal law that places restrictions on wage garnishments to protect employees from discharge by their employers because their wages have been garnished for any one indebtedness. The Wage and Hour Division of the United States Department of Labor enforces the provisions.
Title III of the CCPA prohibits an employer from discharging an employee because his or her earnings have been subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect it. It does not, however, protect an employee from discharge if the employee’s earnings have been subject to garnishment for a second or subsequent debt.
Title III also protects individuals by limiting the number of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the Federal minimum hourly wage prescribed by Section 6(a) (1) of the Fair Labor Standards Act of 1938. This limit applies regardless of how many garnishment orders an employer receives. The Federal minimum wage is $7.25 per hour.
Title III permits a greater amount of an individual’s earnings to be garnished to enforce any order for the support of any person (e.g., spousal support or child support). Title III allows up to 50 percent of an individual’s disposable earnings to be garnished for support if the individual is supporting a current spouse or child who is not the subject of the support order, and up to 60 percent if the individual is not doing so. An additional five percent may be garnished for support payments over 12 weeks in arrears.
An individual’s “disposable earnings” is the number of earnings left after legally required deductions (e.g., Federal, state, and local taxes; the individual’s share of Social Security, Medicare, and unemployment insurance taxes; and contributions to state employee retirement systems required by law) have been made. Deductions not required by law (e.g., union dues, health and life insurance premiums, and charitable contributions) are not subtracted from earnings when the amount of disposable earnings for garnishment purposes is calculated.
Title III’s restrictions on the number of wages that can be garnished do not apply to certain bankruptcy court orders or debts due for federal or state taxes. Nor do they affect voluntary wage assignments, i.e., situations where workers voluntarily agree that their employers may turn over a specified amount of their earnings to a creditor or creditors.
Article 16, Section 28 of the Texas Constitution plainly states no current wages for personal service shall ever be subject to garnishment, except for the enforcement of court-ordered child support payments or spousal maintenance. Unpaid taxes and student loans can also lead to possible wage garnishments.
Texas allows as much as 50 percent of a person’s disposable earnings to be garnished to pay domestic support obligations such as child support or alimony. The United States Department of Education can garnish 15 percent of your disposable income for unpaid student loans, but not more than 30 times the minimum wage.
Garnishments for unpaid taxes will depend on how many dependents a person has and their deduction rate. The federal, state, and local governments all have the power to seek garnishments for unpaid taxes, even without court judgments.
How Bankruptcy Affects Wage Garnishments
Filing Chapter 7 or Chapter 13 bankruptcy will not completely erase all kinds of wage garnishments. Domestic support obligations such as child support payments and spousal maintenance are considered priority debts in a bankruptcy filing and cannot be discharged.
With a Chapter 7 bankruptcy filing, a person will receive the benefit of an automatic stay that will immediately prohibit all creditors from continuing to pursue a person for their debt. This will mean that many forms of wage garnishment can be halted right away.
If a person files for bankruptcy within 90 days of their wage garnishment, they may even be able to recover some of their lost wages. This process can be tricky though, as many trustees will use any recovered funds to pay back creditors in a bankruptcy case.
With a Chapter 13 bankruptcy, delinquent taxes need to satisfy certain requirements before they can be discharged. When taxes do not satisfy the requirements, they will need to be paid over the course of a three- to five-year repayment plan.
When a tax is on income or gross receipts, it must be determined whether the debt is a priority debt or nonpriority debt. Priority taxes have to be paid in full in a Chapter 13 plan while nonpriority taxes get categorized with other unsecured debt such as credit cards and medical bills.
All nonpriority unsecured creditors are required to share discretionary income, or the amount remaining after deducting allowed living expenses and payments such as mortgage and car payments. Because a person pays only their discretionary income to this group, it is likely that they will not have to pay all their nonpriority tax debt.
Texas Wage Garnishment Resources
Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act’s Title III (CCPA) — On this section of the Wage and Hour Division of the United States Department of Labor, you can learn more about wage garnishments and Title III of the CCPA’s limitations on wage garnishments. Read about the definition of earnings and limitations on the amount of earnings that may be garnished. Also learn about limitations on the amount of earnings that may be garnished for child support and alimony, exceptions to title iii’s limitation on wage garnishments, and non-tax debts owed to federal agencies.
Federal Wage Garnishments | U.S. Department of Labor — Found general guidance about federal wage garnishments, including who is covered, basic provisions/requirements, employee rights, compliance assistance available, and penalties/sanctions. Also access fact sheets and interpretive guidance. You can also find applicable laws and regulations, opinion letters, and a field operations handbook chapter.
Contact a Wage Garnishment Lawyer in Houston | The Sparrow Law Firm
Are you facing a possible adversary proceeding relating to your Chapter 7 or Chapter 13 bankruptcy case? Do not wait to contact The Sparrow Law Firm.
Our firm will be able to be with you the entire time that you are dealing with your issues and we can work to ensure that you are able to achieve the most favorable possible outcome. Call 281-973-0431 or contact us online today to have us take a closer look at your case during a free consultation.