How Do I Stop IRS Wage Garnishment?

Morristown Bankruptcy Lawyer Can Help End IRS Collections Actions

Failing to pay your debts will almost always lead to collection actions. However, some creditors have much more power than others in how they may seek to collect from debtors, including the IRS. Most creditors must file a lawsuit and obtain a judgment before they can begin garnishing your wages. Normal creditors also have strict dollar limitations on how much they can take. The IRS is not bound by these rules. If you owe taxes to the IRS, then it can garnish your wages without a court order and take more from your pay.

IRS wage garnishment may also cause a cascade of other debt problems. Your mortgage, student loans and car payments may become much more problematic once collections begin. Defaulting on these debt obligations will cause lasting damage to your financial matters and your credit score. Therefore, waiting to seek help with back taxes may prove to be a costly mistake with long-term negative consequences. However, it is never too late to take action to fix the problem. If you owe past due taxes, then contact a New Jersey bankruptcy lawyer at Ast & Schmidt, P.C. today at (973) 984-1300. We can explain your alternatives for stopping wage garnishment by the IRS or any other creditor.

When Can the IRS Garnish My Wages?

Wage garnishment is one way that the IRS may seek to recover back taxes, penalties and interest if you fail to pay. If the IRS chooses to pursue this option, you should receive several notices in the mail before the garnishment begins. The first is a Demand for Payment, which lists how much you owe and the date the balance must be paid by.

If you fail to respond, you should next receive a Notice of Intent to Levy and Notice of Your Right to a Hearing. The IRS cannot begin garnishing your wages until 30 days after they have mailed you these final two notices. Once 30 days have passed, the IRS may send your employer a wage levy order.

To avoid wage garnishment, you should seek legal advice and assistance from a bankruptcy lawyer to evaluate your options to avoid the wage garnishment. You have several options for action even after receiving a Notice of Intent to Levy. Taking action in a timely manner may allow you to start negotiations with the IRS. In many cases, a bankruptcy lawyer may help you find a workable plan to repay the IRS without having your wages garnished or even filing for bankruptcy protection.

How Can I Stop Wage Garnishment?

Depending on the circumstances, there are several ways to stop wage garnishment for past due tax debt, including:

  • Expiration of statute of limitations. The IRS has 10 years to collect unpaid taxes from the date of assessment of the tax. If the IRS served you a Notice of Intent to Levy after this time limit, it may be possible to stop the garnishment based upon the lapse of time.
  • Lack of notice. The IRS must give you 30 days to respond to a Notice of Intent to Levy and Notice of Your Right to a Hearing. If they did not allow you this grace period, then you may be able to stop the garnishment.
  • Offer in Compromise. The balance can be paid in full. However, it is more common to negotiate an Offer in Compromise with the IRS. With an OIC, the debtor pays a portion of their tax debts in a lump sum in exchange for discharge of the total owed. However, the IRS will not always accept an Offer in Compromise.
  • Set up a repayment plan with the IRS. With this alternative, you pay your tax debt, in whole or in part, over a period of time based upon your ability to pay. However, the IRS does not have to agree to your installment plan proposal.
  • Temporary reprieve. In some cases, you can claim a wage garnishment imposes economic hardship and the IRS may agree to temporarily halt proceedings.
  • Filing for bankruptcy will stop wage garnishment. When you file for Chapter 13 bankruptcy or Chapter 7 bankruptcy, an automatic stay is issued to your creditorss. The automatic stay puts a temporary halt during the bankruptcy proceeding on collection attempts, even from the IRS.

Want to Stop Wage Garnishment? Contact a Morris County Bankruptcy Attorney Today

IRS collections will cause lasting damage to your financial matters. A bankruptcy attorney can help you look at alternatives for stopping an IRS wage garnishment. Tax debts may be discharged in Chapter 13 or Chapter 7 bankruptcy under the right circumstances. However, the requirements for discharging tax debts in bankruptcy are very specific and complicated.

The interplay between tax and bankruptcy laws are notoriously confusing and complex. Additionally, it is much more difficult to pursue solutions without the help of experienced legal representation. In some cases, people may make their situation with the IRS even worse by doing the wrong thing on their own. The Morristown bankruptcy attorneys at Ast & Schmidt P.C. can help you find the solution that best suits your needs. Contact us today to schedule your free initial consultation at (973)984-1300.