What Types of Debts Can Lead to Wage Garnishment

 Posted on May 31,2024 in Wage Garnishment

You work hard to make ends meet and suddenly notice that your wages are garnished due to outstanding debt. Wage garnishment can be a shocking and stressful experience, but understanding which types of debts can lead to this situation is crucial for protecting your income and getting through financial challenges. An Illinois lawyer can help you when you are facing this type of situation.

Unpaid Child Support is a Priority Debt

One of the most common types of debt that can result in wage garnishment is unpaid child support. The state takes child support obligations seriously, and if you fall behind on payments, the Attorney General’s office can issue an administrative writ of withholding. This writ allows your employer to withhold up to 50% of your disposable earnings to satisfy your child support debt. If you face difficulties meeting your child support obligations, you should communicate with the court and seek a modification if necessary.

Student Loans are a Growing Concern

Student loan debt is another type of debt that can lead to wage garnishment in Texas. If you default on your federal student loans, the Department of Education can garnish up to 15 percent of your disposable pay without a court order. Private student loan lenders must obtain a court judgment before garnishing your wages, but they can garnish up to 25 percent of your disposable earnings. To avoid wage garnishment, explore repayment options like income-driven repayment plans or loan consolidation.

Unpaid Taxes Can Lead to Financial Trouble

Failing to pay your federal or state taxes can also put you at risk of wage garnishment in Texas. The Internal Revenue Service (IRS) can garnish a significant portion of your wages, sometimes up to 70 percent, depending on your tax filing status and number of dependents. The Texas Comptroller’s office can also garnish your wages for unpaid state taxes. If you are struggling with tax debt, consider setting up a payment plan or seeking the assistance of a tax professional.

Protect Your Wages and Know Your Rights

If you are facing wage garnishment, you must understand your rights. Some types of income, such as Social Security benefits, veterans’ benefits, and workers’ compensation, are generally exempt from garnishment. If the garnishment would cause you and your family undue financial hardship, you may be able to challenge the garnishment in court.

Contact a New Braunfels, TX Bankruptcy Attorney

If you are facing wage garnishment, there may be options to fight against this. A Kerrville, TX bankruptcy lawyer can determine whether you have a potential case based on your circumstances. Call Law Offices of Chance M. McGhee at 210-342-3400 to book a free consultation.