The short answer is yes. A creditor can freeze your bank account in Texas. However, they can do so only after meeting specific legal requirements. The path to a freeze involves more steps than many people realize, and certain funds may stay protected regardless. Here is what you need to know.
What steps must a creditor take before freezing your account?
In Texas, creditors typically use a court-issued legal tool called a writ of garnishment to freeze a bank account. Generally, a creditor must first file a lawsuit against you and win a court judgment before pursuing garnishment. The creditor then files a separate case against your bank and asks the court to issue a writ, which directs the bank to freeze your funds.
However, Texas sharply limits wage garnishment: a creditor typically cannot garnish your paycheck directly from your employer for consumer debts. However, once you deposit that paycheck into a bank account, a creditor may then target those deposited funds through garnishment.
Which funds are exempt?
Both Texas and federal law shield certain types of income through what the law calls “exemptions.” Exempt funds usually include Social Security benefits, veterans’ benefits, unemployment benefits, workers’ compensation and pension and retirement account funds.
More importantly, if you receive federal benefits such as Social Security or veterans’ benefits through direct deposit, your bank generally must protect two months’ worth of those deposits automatically upon receiving a garnishment order. However, if you manually deposit a paper benefit check, that automatic protection may not apply, and you may need to demonstrate to the court that the funds qualify as exempt. Lastly, mixing exempt and non-exempt funds in one account can significantly complicate any exemption claim, so keeping them separate generally strengthens your case.
How a legal guide can help
If a creditor has frozen your account and it holds exempt funds, you may be able to contest the garnishment and assert those exemptions through the court. An attorney can identify which funds qualify, gather supporting documentation and help you meet applicable deadlines.