Have you recently been shocked to find a much lower paycheck than you were expecting, only to realize your wages are being garnished by the IRS?
Who can legally garnish your wages? How will you know your wages are going to be garnished before your paycheck is lower than expected? Are you facing a significant reduction in your paycheck for the foreseeable future? If so, you probably want answers to questions about how to stop your wage garnishment and get your paycheck back to normal.
To help you understand what to expect with your wage garnishment situation, we’ve put together some of the most frequent concerns of people who are dealing with a consumer debt or IRS wage garnishment and need it to end fast.
Can a Collection Agency Garnish Your Paycheck?
The unfortunate truth is that a debt collector is legally allowed to garnish your wages if you live in a state that allows it. Before this can happen, though, a lawsuit must be filed against you. Once the case runs its course, if you take no action, the debt collection agency may be able to seek wage garnishment to collect on the judgment they were awarded in court.
Once a wage garnishment is issued, the debt collector will receive the money deducted from each paycheck until the debt collection judgment is paid off.
How Long Before a Creditor Can Garnish Wages?
First, a creditor must obtain a judgment against you for the debt you owe. Once the judgment is awarded to the creditor, they have to mail a notice to you and typically wait a minimum of 15 days before filing the wage garnishment. However, in some states, the court may allow a wage garnishment to be filed directly after the judgment is awarded without a notice first.
What Companies Can Garnish Your Wages?
Who can garnish your wages without a court judgment:
- Federally-backed student loan debt collection agencies
- People and government agencies to whom you owe child support or alimony
- Taxation agencies such as the IRS or your state taxing authority
Can Your Wages Be Garnished Without You Being Notified?
Have you been caught by surprise by wage garnishment? The reality is, your employer may have been under a time constraint to process the wage garnishment and didn’t have time to inform you ahead of time. Many state laws don’t require employers to notify you of a wage garnishment or offer time to dispute it. In the case of an IRS wage garnishment, you should receive numerous letters before the garnishment begins. Getting help from Alleviate Tax when you first get a letter from the IRS is the surest way to prevent an IRS wage garnishment.
What Is the Maximum Federal Amount That Can Be Garnished From a Paycheck?
If a creditor has won a judgment against you, they may seek to garnish your wages to collect payment. Federal law limits these wage garnishments to the lesser of 25% of your disposable income or the amount of income you have beyond 30 times the federal minimum wage.
How Much Does the State Limit Garnishments of Paychecks?
Wage garnishment limits vary state by state. One example of state limits of wage garnishment is California, where your wages can be garnished up to 25% of your disposable income or by however much your disposable income exceeds forty times the state minimum wage.
Can You Have Two Garnishments at Once?
In most cases of consumer debt, federal law limits wage garnishments to one at a time. Whichever creditor files for a wage garnishment first are the one who wins the claim on your paycheck. If multiple creditors are trying to place garnishments on your wages, each will have to wait in line until the creditor ahead of them is fully paid.
That said, exceptions do exist where multiple wage garnishments are possible. Debts such as child support and alimony can be garnished along with creditor garnishments.
IRS wage garnishments are another example that can be added to existing garnishments from your paycheck. Help with IRS wage garnishment is available. The experts at Alleviate Tax are experienced at helping clients with removing IRS wage garnishment and avoiding this action.
What Income Is Exempt From Being Garnished?
Fortunately, not all of your wages can be garnished. Garnishable earnings include income from hourly wages, commissions, rent payments, or other investment income like dividends. Government assistance payments such as social security, SSI, VA benefits, and certain retirement payments such as military pensions are generally not allowed to be garnished. IRS wage garnishments do consider your living expenses, but that doesn’t leave much left of your paycheck. Alleviate Tax helps clients prevent or remove existing IRS wage garnishment.
Can You Stop a Garnishment Once It Starts?
Once a wage garnishment is initiated, you’ll have to challenge the underlying judgment or contact the creditor to negotiate new payment arrangements. Keep in mind that they aren’t required to make new payment plans, so the only other option you’ll have is bankruptcy for stopping the wage garnishment for the debt.
What Can I Do If the IRS Is Garnishing My Wages?
If the IRS has already started garnishing your wages, you may wonder if it is possible to fight an IRS wage garnishment. Thankfully, there are multiple options to stop IRS wage garnishment and alleviate your financial stress:
- Get IRS wage garnishment help from a tax debt professional like Alleviate Tax, who specializes in wage garnishment removal.
- Pay the debt off in full
- Establish a payment plan
- Agree to settle the tax debt in a lump sum for a lesser amount
- Request a financial hardship release of the tax debt garnishment
How Long Does It Take the IRS to Garnish Wages?
The length of time it will take for the IRS to process your tax debt wage garnishment will depend on how busy they are. In general, it takes between 11 to 25 weeks after the final request for payment letter for the IRS to process a wage garnishment. That said, it’s best to stop IRS wage garnishment before it starts. Alleviate Tax helps clients with avoiding this action and removing IRS wage garnishments after they’ve started.
Now that you know what to expect when it comes to wage garnishment, we hope you can see a clear strategy to stop it. There are distinct differences between an IRS wage garnishment and a creditor wage garnishment. If you need IRS wage garnishment help, the team of IRS wage garnishment experts at Alleviate Tax are ready to help you regain control of your wages. Reach out to a member of our team today.