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Can I go to jail for my debt?

On Behalf of | Nov 23, 2020 | Bankruptcy

If you have significant debt in Texas, you may fear the consequences of failing to pay. Thankfully, you cannot go to jail for most debts.

Understanding state law about this issue may help ease your mind or help you plan your next steps.

Jail for debts

As explains, if you have unpaid child support, it is possible that you could face jail time. This would typically require that the other parent exhausted all other options and pursued legal recourse.

However, you should not face jail time under Texas law for failing to pay other debts.

Creditors may pursue repayment through other means such as using collections agencies and wage garnishment, but some creditor harassment is illegal, and creditors cannot threaten you with imprisonment.

Judgment proof

Being “judgment proof” in Texas means that your property and debt are exempt from creditors’ claims. In other words, if a creditor sues you for repayment of a debt, your assets are unreachable to them. You may be judgment proof if you own little property beyond a homestead and a vehicle and if your income is exempt.

Exempt income includes most unemployment, retirement, Social Security, public assistance and veterans’ benefits. Creditors cannot access or garnish exempt income.

Know that not all income is exempt, and many regular paychecks are subject to wage garnishment.

If you are judgment proof, you may want to consider alternatives to resolving your debt rather than bankruptcy. Bankruptcy is certainly the right decision for some, but it does have significant repercussions such as the impact on credit scores. Judgment proof individuals may have alternative resolutions available to them.