Legal Question in Credit and Debt Law in Texas

401k garnishment

I have lost my job and have called the boat loan company informing them that I would like to do a voluntarily repo of the boat. I informed them that I could no longer make the payments. The collector of the boat loan stated that if I did they would sell the boat and garnish my wages and 401k to make up the difference between the selling amount and the loan amount. They told me that in Texas they could do this with no problem because of Texas laws. Can they garnish wages and 401k benefits to recover consumer loans?


Asked on 10/11/07, 3:55 pm

1 Answer from Attorneys
Sharon Campbell Sharon K. Campbell

Re: 401k garnishment

No garnishment of wages in Texas except by the IRS, child support or federal guaranteed student loans. Its in the Texas Constitution. Also, retirement funds are exempt. It is true that they will sell the boat, apply what they get to the balance and you will be responsible for the remainder.

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Answered on 10/11/07, 9:16 pm


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