How to Stop Wage Garnishment for Unpaid Tax
Wage garnishment is one method a creditor may use to force an individual to repay debt. A writ of garnishment is a legal court order given to a creditor by a court ordering an employer to withhold a percentage of your earnings from each of your pay checks to repay delinquent debt. If you have been sued in court by a creditor and they have obtained a judgment against you, your employer will withhold the specified amount until the debt is paid. Federal law will exempt from garnishment seventy-five percent of your disposable earnings per week. Garnishment for personal debt is not allowed in all states and, in Florida, if you are responsible for over half of support for a child or dependent you may be exempt from wage garnishment completely.
Another type of wage garnishment is a tax wage garnishment and it will allow the Internal Revenue Service or another state taxing agency to garnish your wages to pay taxes which are overdue.
The most common types of debt that could result in a wage garnishment include:
- Child support
- Unpaid state and federal taxes
- Court fines
- Student loans
- Restitution for a crime
- Personal debt (although North Carolina, Pennsylvania, Texas and South Carolina do not allow wage garnishment for this type of debt)
The wage garnishment is a legal court order and your employer will not have the option to refuse the court order without severe legal consequences. Not all income will be subject to wage garnishment, types of debt can vary depending on which state you live in. Debts that may be excluded include: welfare benefits, unemployment benefits, Social Security payments, student loans and other retirement income.
If your net pay does not satisfy the garnishment, the debt will be prioritized. All federal tax garnishments will be taken first, then the state tax garnishments and lastly any personal debt.
Avoiding a Wage Garnishment
Many individuals who face financial crisis ignore the problem and hope that their financial debt will go away or that they can avoid the consequences of the debt by ignoring creditor phone calls. If wage garnishment is allowed for credit card, loans or other private debt in your state, it is important to contact your creditors and work out a reduced monthly payment schedule.
It may be possible to renegotiate with your creditors before they take legal action against you. Most creditors will be motivated to negotiate a repayment schedule or settlement option with you and avoid the costs of collecting the debt. In an effort to avoid a writ of garnishment it is important to deal openly with all of your creditors and work out a payment schedule. It may also be necessary to contact a Tax Attorney who can review your financial situation especially if you are facing a tax wage garnishment.
Protections against Employer Discharge Due to Wage Garnishment
If your earnings have been garnished, it is important to understand your rights. Under Title III of the Consumer Protection Act (CCPA) your employer is not allowed to fire you because your earnings have been garnished due to debt. The law will also limit the amount of your wage which can be garnished each week.
If you feel like you have been fired due to a wage garnishment issue it is important to talk to an Employment Attorney to make sure your employee rights have not been violated.
Do I Need A Tax Attorney?
In some states, such as Texas, your wages are protected under Texas law from wage garnishment. This means if you have private debt such as credit card debt or an outstanding personal loan your wages can not be garnished. Unfortunately, this will not be true in all states. Certain state laws which protect your wages may not protect your assets. In certain cases your personal assets may be seized to reimburse your creditors so it is still a good idea to contact an attorney to work out a payment schedule for debt re-payment or stop your assets from being seized.
If you are facing a tax wage garnishment it may be a good idea to consult a good tax attorney. It is important to find an experienced tax attorney who is an expert in wage garnishment relief. Tax garnishment may not be limited to twenty-five percent of your wage. Tax garnishments may range from thirty to seventy percent of your wages making it difficult to meet your other financial obligations. Even in Texas, your wages can be garnished for legally ordered settlements or government related Tax Debt, such as child support, state and federal taxes or other Internal Revenue Service debt. Texas state garnishment laws will not protect you against these types of debts
Hiring a good tax attorney may save you hundreds or thousand of dollars. Unfortunately, a wage garnishment can affect your credit score, your ability to open a bank account or to get a loan. If you are facing a wage garnishment due to delinquent state or federal taxes a tax attorney may be able to work with the Internal Revenue Service or other state tax agencies to have your wage garnishments released or your tax debt renegotiated.
If you have outstanding tax debt and are looking for Tax Relief, consult with an experienced tax attorney to see if you qualify for an Offer In Compromise.