Receivership - Collections - Current Wages

RustyShakelford

New Member
Jurisdiction
Texas
I had a credit card company sue me and they won a default judgement about two years ago. A Court Receiver froze my bank account the day that my paycheck was being direct deposited. I filled out the Protected Property Form and filed it with the Justice of the Peace court. I checked "Current Wages" as the exemption. I was then assigned a court date.

I noticed that on the Harris Country JP court website, there is a notice of a Supreme Court Decision posted. The link to the decision sent me to texaslawhelp.org and on that page I clicked on the section for Turnover-Receivers-> Turnover Receivers and Debt Collection | Texas Law Help
On this page it states the following: Texas Civil Practice & Remedies Code 31.002(f), the statute on turnover receivers, says that "proceeds" and "disbursements" from exempt property cannot be taken by a receiver, and the Texas Supreme Court has stated that this statute "prohibits the turnover of the proceeds of current wages."

When I click the link of the Supreme Court case this is referring to, it leads me to:

806 S.W.2d 795 (1991)
Robert A. CAULLEY, Petitioner,
v.
Ruth CAULLEY, Respondent.

No. C-9274.

Supreme Court of Texas.

March 6, 1991.Rehearing Overruled April 24, 1991

Several statements in the judges opinion seem to be in support of my case.


"II. Turnover Order


We need not reach Robert's constitutional challenge to the turnover statute because the trial court's order in this case is expressly prohibited by the 1989 Amendment to the turnover statute. In 1989, the following section was added to Tex.Civ.Prac. 31.002:

(f) A court may not enter or enforce an order under this section that requires the turnover of the proceeds of, or the disbursement of, property exempt under any statute, including Section 42.0021, Property Code."

There is also a statement about garnishment.

The receiver's attorney responded to the Protected Property Form with a motion that mentioned cases from the 1920's that establish that once a paycheck is deposited into your bank account, it is no longer exempt.

My question is, has anyone successfully argued that current wages frozen by the bank is still exempt, as these are the proceeds of current wages?
 
It is a truly a really bad idea to post identifying information on the internet.

I have pm'ed a couple of the Mod's to trim back some of this information, so you don't get nut-bags, scammers or creeps contacting you.
 
Hello, the copy and paste was from a Supreme Court case that was linked on the courthouse website. Is that what you are referring to? Or did I give too much detail about my case in general?
 
My question is, has anyone successfully argued that current wages frozen by the bank is still exempt, as these are the proceeds of current wages?

Current wages and bank account lavy are two different things. The Cauley case involves current wages, not bank accounts.

Caulley v. Caulley, 806 SW 2d 795 - Tex: Supreme Court 1991 - Google Scholar

In Barlow v. Lane, the Texas Court of Appeals addresses the question: When do current wages cease being current wages.

Wages cease to be "current" within the meaning of our exemption laws immediately on being paid to and received by the wage earner. Sutherland v. Young, 292 S.W. 581, 583 (Tex.Civ.App.—Waco 1927, no writ). Appellee's wages were no longer current when she received her paycheck.

Barlow v. Lane, 745 SW 2d 451 - Tex: Court of Appeals, 10th Dist. 1988 - Google Scholar

That suggests to me that once you received your pay and deposited it in the bank, it was no longer current wages and the bank account was fair game.

Barlow was the first that came up in my search. I am not willing to spend the night researching case law for you. You can give it a try at:

bank account levy after paycheck deposited - Google Scholar

Using different search parameters.

The receiver's attorney responded to the Protected Property Form with a motion that mentioned cases from the 1920's that establish that once a paycheck is deposited into your bank account, it is no longer exempt.

Numerous citations on the following page appear to confirm that rule. Each case has a link that you can click on.

Sutherland v. Young, 292 SW 581 - 1927 - Google Scholar

The second one on the list, GE Cap Corp v ICO inc provides historical background regarding the loss of the exemption.

How much money did they get from your bank account?
 
The cases sites were:

Sutherland v. Young, 292 S.W. 581, 583 (Tex.Civ.App.—Waco 1927, no writ)

And

Lee V. Emerson-Brantingham Implement Co., 222 S.W. 283 (Tex.Civ.App.—Dallas 1920, no writ)

The bank froze about $2K.

I mainly wanted to know if I had a leg to stand on in fighting this. It is looking more and more like I do not. I could not find an attorney willing to handle this so I thank you for the info you have already posted.
 
Hello, the copy and paste was from a Supreme Court case that was linked on the courthouse website. Is that what you are referring to? Or did I give too much detail about my case in general?

Rusty Shackelford, I love it!

That's the "alias" purloined by Dale Gribble, which he often uses to conceal his real identity.

I loved Hank and Bobby Hill, Mrs. Hill remains the greatest teacher substitute of all time.

Rusty, (aka-Dale Gribble) you are the planet's supreme pest exterminator and story teller.
 
Rusty Shackelford, I love it!

That's the "alias" purloined by Dale Gribble, which he often uses to conceal his real identity.

I loved Hank and Bobby Hill, Mrs. Hill remains the greatest teacher substitute of all time.

Rusty, (aka-Dale Gribble) you are the planet's supreme pest exterminator and story teller.
Lol! You are correct. The perfect alias.
 
I mainly wanted to know if I had a leg to stand on in fighting this. It is looking more and more like I do not.

For a long time I have been familiar with the Texas wage garnishment exemption but I have not come across the turnover statute until your post.

It is a nasty piece of work that I have not come across in other states (all but a couple) that allow wage garnishment and bank account levy. Some states (after the maximum percentage is collected) exempt the remaining amounts while they are in bank accounts for a certain period of time.

What Texas has done (my cynical opinion) is given you protection with one hand and stabbed you in the back with the other. And, in a way, the court (Davis v. Raborn), while upholding the turnover statute, commented:

The potential consequence of an order allowing a creditor to reach property that is currently exempt will weaken and destroy our constitutional guarantees and render such protection useless.

Davis v. Raborn, 754 SW 2d 481 - Tex: Court of Appeals 1988 - Google Scholar

I suggest that you cash future checks and keep your money out of banks. This, at least, avoids the bank account levy and you would just have to hope that your creditor isn't smart enough to invoke the turnover statute.
 
Hello, the copy and paste was from a Supreme Court case that was linked on the courthouse website. Is that what you are referring to? Or did I give too much detail about my case in general?

I apologize for my reading comprehension issues yesterday. I am dealing with a nasty plague and misread your opening post.
 
For a long time I have been familiar with the Texas wage garnishment exemption but I have not come across the turnover statute until your post.

It is a nasty piece of work that I have not come across in other states (all but a couple) that allow wage garnishment and bank account levy. Some states (after the maximum percentage is collected) exempt the remaining amounts while they are in bank accounts for a certain period of time.

What Texas has done (my cynical opinion) is given you protection with one hand and stabbed you in the back with the other. And, in a way, the court (Davis v. Raborn), while upholding the turnover statute, commented:



Davis v. Raborn, 754 SW 2d 481 - Tex: Court of Appeals 1988 - Google Scholar

I suggest that you cash future checks and keep your money out of banks. This, at least, avoids the bank account levy and you would just have to hope that your creditor isn't smart enough to invoke the turnover statute.

Thank you for the insight. Your summary of protection with one hand and a stab in the back seems to sum this up perfectly. I think I will do as you suggest. It's going to be back to cashing checks at my employers bank unless I manage to gain a lot of savings.
 
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