Can your wages be garnished for a payday loan?

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Can your wages be garnished for a payday loan?

I was called concerning a payday loan from several years ago and they are saying they can garnish my wages.

Asked on August 28, 2012 under Bankruptcy Law, Texas

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Texas has a payday law which only permits garnishment under two circumstances.  The first is by consent or agreement.  This usually comes up in the context of an employer taking funds from an employee's check to pay for insurance, product purchases, or other services offered through the business.  The second circumstance is by court order.  Usually, this is in the form of a child support garnishment order.  Garnishment of wages is extremely rare, but in order to do so, they would have to file a suit against you and get an order from the court.  It sounds like they are just trying to bully you.  You mention that this loan was from "several years" ago.  Depending on when you last paid on this account and the time frame since, the statute of limitations may have run on their ability to collect on this account-- meaning that their threat to garnish is baseless.  For peace of mind, you may want to pay a consumer law attorney a consultation fee (much lower than a usual fee) and let them look over the actual contract/agreement that you signed and review the specific facts of your case.  If they no longer have a right to collect on your acccount and are making these kinds of threats, you may be able to file your own suit for violations of state and federal debt collection practices.  If you don't want to file a lawsuit, you still might want to file a complaint against this agency with the Texas Attorney Generals Office.  They have an online complaint system that is free to the public.


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