Having a wage garnishment put on your paycheck can be more than just a financial burden, as explaining the reasons behind your situation to an employer can be embarrassing and difficult. However, there are several different methods that can be undertaken to remove a wage garnishment.
How to Release a Wage Garnishment
If the garnishment is due to local, state, or federal taxes, an attorney may or may not need to get involved. This will often depend on how far behind you are and what your individual circumstances are. If you are just paying personal income tax and have a garnishment, you may or may not need legal representation. The process is usually the same with or without an attorney, but certain circumstances may be a little more complicated due to tax laws in various jurisdictions.
Either way, to get a wage garnishment or tax levy released, it is first important to make sure you are in full compliance with either the state you owe taxes in or the Internal Revenue Service (IRS). This means filing any missing tax forms, even possibly back as far as fifteen years.
After you know for sure you are in full compliance, the IRS will then request forms documenting your current financial situation. These forms include amounts you currently have in cash in checking accounts, savings accounts, retirement funds, etc. In certain cases, they may also ask you to provide copies of your lease, basic housing bills, car payment receipts, and other financial documents.
From there, they will make a determination on whether or not placing a wage garnishment on your paycheck will actually cause financial hardship.
Should Bankruptcy Be Filed?
While bankruptcy is one way to get a wage garnishment removed, it is the least desirable option. Not only are bankruptcy laws getting tougher than in previous decades, more judges are starting to side with tax jurisdictions. Factor in the long-term affect a chapter 7 or a chapter 13 could have on your overall financial health, and it is easy to determine that a bankruptcy should only be exercise if all other avenues to getting the wage garnishment released have been exhausted.
Why Do Creditors and the IRS Take Out Wage Garnishments?
A wage garnishment is usually the last step in a long line of attempts to collect a debt. Usually, a lawsuit over the debt will be filed and you will receive a court summons. After that court date, any garnishment will then be decided by a judge. However, there are certain instances where the law firm representing the creditor–in this case, the IRS or State–can take out a wage garnishment after the summons and before the court date. (This often depends on your particular situation or if you do not respond to the summons. Thus, if you receive a summons, it is important to respond in a timely fashion.)
In situations where the IRS specifically is involved, you can bet the agency has tried to contact you multiple times over several years in order to collect any amounts owed prior to taking out a wage garnishment.
The most important thing to remember about a wage garnishment is that it is not forever. Communicate with the IRS or state and come to a repayment agreement that works out for the both of you.