Wages cannot be garnished for credit card debt

Wages cannot be garnished for credit card debt

Q. About two years ago, my wife and I ran into financial difficulty and made the choice to attempt to settle our credit card debt. Most creditors settled with us, but one credit card company wouldn’t settle, so we quit paying altogether. If we are sued and have a judgment against us for this debt, can our wages be garnished? I guess essentially we want to know what can happen for non-payment of credit card debt. Thank you.

A. If you are sued in Texas, the creditor can collect by taking your “non-exempt” property. To put it another way, the creditor cannot take “exempt” property. Under Texas law, your wages are exempt, except in the case of student loans, child support and certain taxes. Your home is exempt, as is up to $100,000 in personal property. Most retirement accounts, such as an IRA or 401k, are also exempt. Because so much of your property probably is protected, my guess is the creditor will talk with you about working out a payment plan once it knows you know your legal rights. To learn more about that can happen after you are sued, visit www.peopleslawyer.net, and go to “Legal Topics-Debt collection.”


Q. How does a business successfully win against a claim of deceptive trade practices? Most of the information I have reviewed seems to slant toward the consumer receiving a favorable ruling.

A. A suit for deceptive trade practices requires the consumer to show that the defendant has made a false representation, misled or deceived him. This usually requires proof that the business said or implied something that was untrue or took unfair advantage of the consumer. The reason it may be easier for the consumer is because the law generally does not care if the business acted in good faith, didn’t know what was represented was false, or didn’t have any intent to deceive the consumer. The law is what we call “strict liability.” If the consumer relies on something a business said, the consumer usually has a claim if it was false or he has been misled or deceived.

As a business, you defend these suits by disproving what the consumer asserts. For example, you can show that what the consumer says is not true or did not happen. You also can show that what you represented did not matter and the consumer did not rely on it. In a lawsuit, the plaintiff, the consumer, has the burden of proof.


Q. I am currently preparing my will. I want to leave money to someone who is not my child. Are there legal limits on how I divide my property?

A. Texas law does not dictate how you distribute your property in your will. You may leave your property to whomever you want, in whatever proportion you want. Texas law also does not require that you leave your children any specific amount of your estate. Of course, because Texas is a community property state, your spouse already owns a share of property acquired after marriage. You only own your share of the community property.

For example, if you have several children, you can leave each child a different percentage of your estate. Alternatively, if you wanted to leave all of your money to a friend, and none to your children, you could do that. The law basically says it is your property and you are free to leave it to whomever you want. Your will, however, should be clear about your intent.


Q. I have a common law marriage in Texas. My husband and I will soon be moving to another state. Will we still be married in that state? What if that state does not have common law marriage?

A. As I have said many times before, a common law marriage is no different than any other form of marriage. Once you have a common law marriage, you are married, just as if you had a formal ceremony in a church or before a justice of the peace. When you move to another state, your status as being married remains intact. To make it easier to prove your marriage, however, you may want to file a Declaration and Registration of Informal Marriage with the county clerk.


Q. How long does bad information stay on my credit report?

A. Negative information becomes “obsolete” after seven years and generally is no longer reported. I should add that the time runs from when the information is first reported. Even if the account is sold or transferred to a new debt collector, the information is not “re-aged,” and the seven years does not begin again. You have the right to review your credit reports for free, once a year. If you find any obsolete information you should demand it be removed. Visit www.annualcreditreport.com for more information.


Do you want to know more about your legal rights? Check out my website, www.peopleslawyer.net.