Wage Garnishment – Everything You Need to Know

Wage garnishment is a legal process wherein an employee can be ordered to repay money owed to them by another person. Employers must comply with the order unless they have a legitimate reason not to. In such cases, employees may challenge the garnishment in court. As such, it is crucial to follow the garnishment process. The first step is to ensure that you receive the order and confirm that you intend to comply. In addition, you must notify the employee within a week of receiving the order. If you want to make the process easier on you and your employees, Williams recommends the following tips.

Tax Debt

If you’re facing garnishment of wages and tax debt, there are many options to fight back. First, you can request currently not collectible status (CNC), which suspends collection efforts. However, this only provides temporary relief; the IRS can resume collection efforts when your financial situation improves. You’ll need to contact the IRS to request this status if you’re under garnishment.

Another option is to negotiate with the IRS. If you owe less than $50,000, you may qualify to arrange a payment plan with the IRS. However, if you cannot pay, you may be deemed “currently not collectible.” If you’re struggling to make payments, the Tax Defense Network can help.

Student Loans

If you’re facing wage garnishment because of unpaid student loans, your best option is to consolidate your loans into one loan. This will stop the wage garnishment and get your loan out of default while helping you maintain good credit. In addition, your payment history makes up 35% of your FICO(r) Score, which 90% of lenders use. This means that your payment history will be necessary to lenders, and it will help you improve your credit score by reducing the impact of missed payments.

The Department of Education has a legal duty to notify debtors facing wage garnishment at least 30 days before a garnishment. This notice must contain critical information and make the debtor’s situation clear. In addition, debtors must act quickly if they want to stop the garnishment. Besides contacting the lender for help, they must gather proof to dispute the wage garnishment.

Back Taxes

If you have back taxes, the IRS can garnish your wages. However, this action is not automatic. The IRS may suspend the wage garnishment if you promise to pay the debt in full within sixty days. Additionally, you may be eligible for an installment agreement with the IRS to pay off your debt in smaller installments. This program allows you to make payments over up to six years. You can set up an installment agreement over the phone or online. You can also apply for an offer-in-compromise (OIC) with the IRS.

When an IRS officer begins to garnish your wages, it must first send you a notice. If you do not receive a message, you can challenge the levy. You must understand how to fight an IRS wage garnishment, including your taxpayer rights.

IRS Levy

An IRS levy or wage garnishment is a legal process in which the IRS collects unpaid taxes from you. The levy amount is based on your exemptions, filing status, and pay period. When you receive a notice of levy, you must submit a levy form. In addition, you will need to provide your bank statements, pay stubs, and other supporting documents.

An IRS levy or wage garnishment can be stopped by appealing the action. Therefore, it is essential to file your appeal within 30 days of the “Final Notice of Intent to Levy.” Bankruptcy is also an option for tax debt, but it is a last resort because it damages your credit for years.

Bank Levy

bank levy and wage garnishment are both legal ways to collect a debt. However, there are some critical differences between the two. In South Carolina, for example, you have a $5,000 exempt funds limit, meaning that any amount over that amount will not be protected from a bank levy. In Texas, a court can grant you 100% wage garnishment protection, but you can’t use that protection if you don’t live in Texas. Banks may also be unwilling to open accounts for non-residents.

When a bank levy is filed, the bank freezes the account, meaning no money can be withdrawn. This process can take several weeks, and it can also involve a fee. It’s important to understand that the bank will only use this levy after other methods have failed to collect the debt.

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