Texas has more than its fair share of destructive storms and weather events. These natural disasters can lead to financial crisis for Texas residents, who are already among the nation's most debt-laden. The result? Periods of rapid debt accumulation.
Having a disaster fund is really important for people in Texas. But not everybody can afford that luxury in the Lone Star state.
Are you a Texas resident struggling to pay down your debt? Drowning in credit card bills and unending interest? There's help for you!
Texas has specific laws that govern debt relief and the rights of both consumers and creditors in the state.
Here are some important resources to check out and key points to know ...
Texas Debt Relief Facts and Stats
Everything is bigger in Texas ... even the debt. Did you know Texas residents carry some of the highest debt loads in the entire country?
Also, Texans love their big trucks. The State of Texas ranks second in the nation for auto loans.
Texans' average annual expenditures for auto loans and credit cards is more than 100% of their earnings. This means the average Texan spends every dime he makes and most of it, sometimes all of it, on debt. Total non-mortgage debt per person in Texas: $44,850.
Texas' economy is robust, though. That might be why Texans can "afford" so much debt. According to the Federal Reserve of Dallas, Texas job growth typically exceeds the national average and the unemployment rate (4.3%) is typically lower than the national average. "The stars at night are big and bright!"
Texas Debt Relief Programs, Law Firms, and Services >>
Struggling to pay your bills? The State of Texas has a variety of programs that can help you:
Texas Debt Relief Programs: Private Debt Relief Companies
Texas Debt Relief Programs: Employment
Trouble finding work? Looking for unemployment benefits? The Texas Workforce Commission provides help to job seekers with a central clearinghouse for job openings, job fairs and other employment information. This is also the place to go when seeking unemployment benefits.
Texas Debt Relief Programs: Housing
Trouble affording housing? The Texas Department of Housing and Community Affairs provides a variety of resources to assist renters, homebuyers and owners, and other stakeholders in creating safe, affordable, energy-efficient housing. HUD is a federally funded program that helps low- to moderate-income homebuyers attain 30-year, fixed-rate, low-interest mortgages.
Most of the Department’s funds are administered to local residents in need through partnerships with:
- Cities and counties that receive no direct allocation of federal housing dollars (Non-Participating Jurisdictions)
- Nonprofit and community-based organizations
- Private developers
- Public Housing Authorities
If you or someone you know is in need of assistance, please visit Help for Texans. Temporary programs established specifically to assist households affected by the pandemic are also available through Help for Texans or you can read about these pandemic programs at TDHCA’s Pandemic Help for Texans Page.
Here's the joint mortgage and housing assistance website maintained by the Consumer Financial Protection Bureau, Federal Housing Finance Agency and the Department of Housing and Urban Development.
Texas Debt Relief Programs: Healthcare
Trouble avoiding health care? Freeclinics.com provides a list of free and income-based medical and dental clinics around the State of Louisiana.
Texas Debt Relief Programs: Food
Need food? Foodpantries.org maintains a list of food pantries to assist people with need.
Texas Debt Relief Laws >>
The state of Texas has several laws regarding debt relief, which are designed to protect consumers from predatory practices by debt relief companies. Here are some of the key laws:
Texas Debt Relief Laws: Wage Garnishment
"The stars at night are ... not garnished ... deep in the heart of Texas!" That's how the song goes, right?
The State of Texas has created amazing protections against garnishments for debtors.
Under Texas law, most creditors aren't allowed to garnish your wages except for court-ordered child and spousal support payments. Check out Texas Constitution Article 16 § 28:
No current wages for personal service shall ever be subject to garnishment, except for the enforcement of court-ordered: (1) child support payments; or (2) spousal maintenance.
Exceptions to the No Garnishments in Texas Rule
There are some more exceptions to the No Garnishments in Texas Rule:
Employers in the State of Texas must comply with garnishment orders for federal debts, like federal student loans and federal taxes. The IRS still has teeth in Texas. But again, you can forget about garnishment orders that involve consumer debts.
Another exception is if you work for an out-of-state company or receive your wages from a source outside of Texas. A creditor can serve a wage garnishment order in that other state and have it made enforceable in Texas. Definitely consult an attorney to learn about your rights if you find yourself in this situation.
Big exception! Creditors may still levy or seize your other assets, like funds in banking and investment accounts, even if they can't garnish your wages.
Texas does allow creditors to freeze a bank account. Once your wages are deposited into your bank account, the funds can be frozen and possibly seized. In order to do this, a debt collector must have won the lawsuit and had an order issued by the court. This can be confusing because the order is called a "writ of garnishment," even though it cannot be used to garnish wages directly from the employer.
Texas Wage Garnishment: The Longer Version ...
Here is a fuller explanation of Wage Garnishment: What is Wage Garnishment? How Much Money Can be Garnished from Your Paycheck? Wage Garnishment Calculator
Additional Texas Wage Garnishment Laws
Texas Civil Practice and Remedies Code, Chapter 61
This chapter discusses the writ of attachment, which allows a creditor to place a claim on a debtor's assets, including funds in a bank account, while a suit over the debt is going on.
Texas Civil Practice and Remedies Code, Chapter 63
This chapter of Texas law discusses the procedure for a writ of garnishment for an unpaid debt. Section 63.004 exempts current wages from writs of garnishment.
Texas Debt Relief Laws: Texas Debt Collection Act
The Texas Debt Collection Act regulates the practices of debt collectors in the state. Among other things, it prohibits debt collectors from using deceptive, harassing, or unfair tactics to collect debts, and requires them to provide certain disclosures to consumers.
Texas Debt Relief Laws: Texas Credit Services Organizations Act
The Texas Credit Services Organizations Act regulates credit repair companies and other companies that offer debt relief services. It requires them to register with the state and comply with certain regulations, such as providing written contracts and certain disclosures to consumers.
Texas Debt Relief Laws: Texas Debt Management Services Act
The Texas Debt Management Services Act regulates debt management services providers, such as credit counseling agencies and debt settlement companies. It requires them to obtain a license from the state and comply with certain regulations, such as providing written contracts and certain disclosures to consumers.
Texas Debt Relief Laws: Texas Consumer Finance Act
The Texas Consumer Finance Act regulates consumer lenders and finance companies in the state. It requires them to obtain a license from the state and comply with certain regulations, such as limiting interest rates and fees and providing certain disclosures to consumers.
Texas Debt Relief Laws: Texas Homestead Exemption
The Texas Homestead Exemption provides certain protections for homeowners who are facing debt collection. It allows homeowners to exempt a certain amount of their home's value from debt collection, which can help protect them from losing their home to foreclosure.
It's important to note that while these laws exist to protect consumers, they do not absolve them of their debts. If you are struggling with debt, it may be helpful to speak with a financial advisor or credit counselor to explore your options for debt relief.
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