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Garnishment in Debt Collection

Money & Debt

This article explains the basics of the garnishment process as a method for collecting debt after a judgment has been entered.

What is garnishment?

Garnishment is a process that creditors use to satisfy debts that you owe.  Typically, a creditor must have filed a lawsuit against the debtor and won a judgment. After winning the judgment, the creditor will file a separate court case against a third party (also called a "garnishee") who has your money and ask the court to issue a writ of garnishment. Most of the time, the garnishee is your bank or, sometimes, your employer. The writ of garnishment is sent to the garnishee to let them know about the judgment and ask them to freeze your funds so the judgment can be paid.
 

Will I get notice of garnishment before my account is frozen?

No, generally creditors will not give a debtor any advance notice that they are seeking a garnishment. A creditor must send notice of the garnishment to the debtor "as soon as practicable" after the writ has been served on the garnishee.

Banks usually freeze the account immediately, before notice has been sent, so many people learn their account has been frozen when trying to use their money. They do this to prevent people moving their money or trying to avoid the garnishment, but it often creates problems for debtors who unexpectedly have no access to their money.

What type of property can be garnished?

Creditors usually seek to garnish your bank accounts. Although paychecks cannot be garnished for most debts, once you deposit your paycheck into a bank account, it can be garnished. 

If your Social Security benefits or other protected benefits are directly deposited into your bank account, the bank must protect 2 months worth of those benefits and allow you access to that amount, even if other money in your account is frozen. 

Can my paycheck be garnished?

Your paycheck cannot be garnished from your employer to pay consumer debts or other types of debt judgments. See Texas Property Code, Chapter 42. Under Texas law, your paycheck (or "current wages") can only be garnished to pay child support, spousal support, alimony, and certain federal debts (like income tax debt, other IRS debt, or federally-backed student loan debt). 

Once you deposit a paycheck into your bank account, it is no longer considered current wages, and it can be garnished from your bank. 

What property is protected from garnishment?

Both Texas and federal laws have set limits, called "exemptions," that means certain types of property cannot be taken through garnishment. Exempt property includes things like:

  • Wages (except to pay child support, spousal support, alimony, and federal debts)
  • Social Security Administration benefits, including Social Security Retirement, SSI, and SSDI
  • Veterans Administration benefits
  • Railroad Retirement Board benefits
  • Office of Personnel Management retirement benefits
  • FEMA disaster benefits
  • Workers’ compensation benefits
  • Unemployment benefits
  • Child support, alimony, and spousal support
  • Pension, retirement benefits, and retirement accounts like 401(k) and IRA accounts
  • Temporary Assistance for Needy Families (“TANF”) funds
  • Proceeds from the sale of a homestead (for up to 6 months after the sale)

Other personal property can be protected up to an amount of $50,000 for an individual (or $100,000 for a family), including items such as:

  • Unpaid commissions for personal services (up to $12,500 for a single person or $25,000 for a family)

A full list and more information about these exemptions can be found here.

If my bank account is garnished, can I still use the money in my account?

If the amount in your account is less than the amount of the judgment, you will not be able to use any of the money in the account. So if you wrote checks or have other bills that are paid from that account, you will not be able to use the funds to pay those and may face penalties from your bank for insufficient funds.

A bank must freeze the amount of the debt judgment, plus it often freezes enough to cover interest and other fees. So if you have more than enough in your account to cover that, you will have access to the additional funds.  For example, if you have an account with $1,500 in it, and you owe a total of $1,700, you will not be able to access anything in the account. But if you have an account with $3,000 in it and owe $1,700, you should be able to access the additional $1,300.

The debt judgment was from years ago. How long after a debt judgment can a creditor garnish my account?

A judgment is valid for 10 years and can be enforced at any time during those that time. It is not uncommon for a creditor to seek to enforce a judgment that is close to ten years old. There are also ways to renew the judgment, so that it can be enforced for even longer than ten years. It is important to remember that a judgment will continue to accrue interest. 

How long does a bank garnishment last?

The garnishment process can last several months. Because it is a separate lawsuit, the bank has to respond to the court to confirm the accounts belong to the debtor. Then the bank has to turn over whatever nonexempt funds are in the account. This process takes some time.

If you have money that is going to be direct deposited into your account during this time, it will likely be frozen when it is deposited as well, so it is important to take steps to protect this money.

Do I have to respond to the garnishment action?

You are not required to respond to the garnishment action because you are not a party to the garnishment suit. But you can respond to and challenge the garnishment. 

Most debtors cannot afford the sudden loss of access to their money, so it may be best to respond if:

- the account garnished has exempt money in it,

- you do not owe the debt or the amount the creditor claims, or

- you did not receive notice of the underlying debt lawsuit.

But, sometimes, not responding may be fine, especially if you actually owe the debt, none of the property taken was exempt, and you do not need the money taken for basic living expenses. 

How can I respond to a writ of garnishment?

There are several different ways to respond to and challenge a writ of garnishment.

If you have exempt money or property that has been taken, you should file a Protected Property Claim Form with the court. You should have received a copy of this form from the creditor shortly after your account was garnished. This will notify the court and the creditor that this property is exempt and should not be garnished. You should complete this document and turn it in to the court as soon as possible. For more information on the Protected Property Claim Form and how to fill it out, read the Exempt Property guide

You can also file a motion to dissolve or a motion to modify the writ of garnishment. In this motion, you must admit or deny each fact included in the writ of garnishment and list the ground for dissolving or modifying the writ. This can be used if you do not owe the debt, the amount is different from what you owe, you were not served notice of the lawsuit leading to the judgment, or there are other problems with the facts included in the writ of garnishment. 

Another option is to file a "replevy bond," which means that you can get your property back if you give the court money or some other security that is equal in value to the money or property that has been garnished. This is very hard to get and is rarely used.

If you are considering a motion to dissolve or a replevy bond, it's a good idea to contact an attorney for help with the process. Use our Legal Help Directory to search for a lawyer referral service, legal aid organization, or self-help center serving your area.

Can I negotiate with a creditor after a garnishment is filed?

Yes, if you have unprotected income or property, you can try to negotiate a payment plan or settle the debt for a lower amount with the creditor, even if they have already filed for garnishment. It is important to get any such agreement in writing.

If the creditor offers a payment plan, make sure you understand the terms and how much more you will have to pay, including the interest.

If all of the income and property garnished is exempt, you may be "judgment proof." Read more about What It Means to be Judgment Proof. If this is the case, it may not be to your benefit to negotiate with the creditors. 

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