Protect your income & take control of your tax liabilities
Although the cost of living has increased, the federal minimum hourly wage hasn’t. With approximately 63% of Americans living paycheck-to-paycheck, wage garnishment poses a significant threat to the average individual’s financial stability.
Is the IRS threatening you with wage garnishments? Has a creditor already begun to garnish your wages? If so, it’s time to contact a wage garnishment attorney.
If you have unresolved liabilities with the IRS, they can start reaching into your paycheck. When your employer receives notification from the IRS that they will be garnishing your wages, your employer has the legal obligation to transfer a percentage of your earnings directly to the government. This process will continue until the liabilities you owe the IRS has been paid in full.
At Damiens Law Firm, PLLC, we understand that money being pulled from your paycheck can make life really hard. You might not have enough money to buy life essentials or pay the bills. Our wage garnishment attorney is here to help you put a stop to the IRS taking your income. When you come in for your free consultation, our legal team can evaluate your case for economic hardship or other factors that can enable us to negotiate for the release of the levy against your paycheck.
What Does a Wage Garnishment Attorney Do?
Wage garnishment attorneys work to stop IRS wage garnishments before they begin and help you explore potential legal avenues if your bank account is already taking a hit. In addition, they can negotiate with the IRS on your behalf and help you establish a reasonable payment plan with lenders.
They will also ensure any wage garnishments enacted upon you meet federal standards and find out what options exist to stop collectors from skimming off your income. If your circumstances allow it, an experienced tax attorney can help you file a bankruptcy petition or dispute a garnishment that places you under undue financial hardship.
They may even be able to recommend a financial counselor that offers a free consultation. Working with a counselor can provide you with a judgment-free space to address any money-managing challenges and make a plan to improve your bank account balance.
Wage garnishment 101
The IRS is often more feared than most creditors out there. The reason for this is that they have more power. While most creditors will need first to obtain an order from the court to garnish a taxpayer’s wages, the IRS can proceed with taking your income without a court judgment. Regular creditors also have limits on how much they can take from a person’s wages. These standard limits do not apply to the IRS.
The IRS is legally permitted to take as much of your income as they desire, so long as they leave you with enough to pay for basic living necessities for yourself and your family. Depending on your tax debt, the IRS could garnish 70 percent or more of your wages.
How Do IRS Wage Garnishments Work?
Wage garnishment is when the court permits a portion of an individual’s disposable earnings to be withheld from their paycheck by their employer to repay a debt. For an employer to garnish wages, they usually must be instructed to withhold part of your paycheck by a court order.
The garnishment order typically follows a court judgment where you are found to be responsible for a specific debt. Before your pay is subject to garnishment by a private creditor, the court must approve garnishment, and you will receive notice that a creditor is pursuing you to collect a debt.
Can a Creditor Garnish Wages Without a Court Order?
In certain situations, garnishment can be forced upon you without a court order, although you should still receive notice that your pay is to be garnished. If your debts are related to taxes, child support or spousal support, your paycheck can be garnished without the creditor filing a lawsuit against you.
There are numerous debts you can incur that may require your employer to garnish your wages. The primary types of debt that require your income to be garnished include:
- Unpaid medical bills
- Unpaid child support
- Unpaid taxes
- Unpaid creditors
- Unpaid student loans
How Much Can Be Garnished by Creditors?
Federal and state law limits how much wage garnishment a creditor can pull from your paycheck, and some states have their own law regarding the maximum amount of garnishments that can be taken. For example, Tennessee’s wage garnishment law is the same as federal law, with an added caveat that allows you to keep more of your paid income if you have a minor dependent.
Creditors in Tennessee who have filed a court order or have a default judgment, such as a creditor pursuing garnishment for medical bills or consumer debt, can withhold the lower amount of the following categories. One formula looks at the individual’s disposable pay, and the other considers the federal minimum wage.
Disposable earnings are left after required deductions, such as social security, have been taken out. Although Tennessee doesn’t have a state income tax, taxes would be taken out before garnishment occurs in applicable states
Legally, creditors can take 25% of your disposable wages each week. Individuals with a minor dependent can protect a certain amount per dependent under the age of 16 per week who lives with them in the state of Tennessee.
Federal Minimum Hourly Wage
However much your disposable income exceeds 30 times the federal minimum wage (hourly) is the other amount creditors could claim. That means you get to keep 30 times the federal minimum wage rate plus your dependent amounts.
The creditor must determine which number is lower and withhold that amount. The consumer credit protection act prevents a creditor from taking more than this amount or greater than 25% of your disposable weekly wages.
When wage garnishment is being sought because you owe taxes, federal student loans, or child support, the laws regarding wage garnishments vary. Whether your wages are being withheld by the IRS, or another creditor, the best thing you can do to improve your financial circumstance is to contact a wage garnishment attorney.
If you believe the garnishment being taken from your wages is too great, reach out to experienced attorneys immediately. Legal representation is essential to protecting your money from wage garnishment, no matter who is trying to collect payments for your debt.
Are garnishments taken out before or after taxes?
Ordinary garnishments are taken out from your net income, which is after required deductions like Social Security and state and federal taxes. In contrast, garnishments on non-tax debts, like student loans and federal liabilities, are taken from your gross income. Both child and spousal support are both taken from your gross income as well.
Can your wages be garnished without notice?
The simple answer is no. In order to have your wages garnished, first your creditors must sue you. If you lose the lawsuit, then a copy of the court order will be sent to your employer. Your employer must then notify you of the garnishment and withhold a portion of your wages to send to your creditor.
How to stop IRS wage garnishment
Fortunately, there are a few different ways to manage your problems with the IRS and avoid or put a stop to the garnishment of your wages. The easiest way to do this is by paying your balance in full. When this is not possible, there are a few remaining options.
Standard resolutions for wage garnishment issues include:
- Entering into an installment agreement with the IRS to fully pay back your tax liabilities through a monthly repayment plan
- Making an offer in compromise to settle your liabilities for less than what you actually owe
- Proving to the IRS that their collection of your income puts you in dire financial circumstances that prevent you from being able to pay for basic needs
Others have found benefit in using some more temporary solutions, such as changing employers, temporarily quitting a job, or filing for bankruptcy.
Can You Stop IRS Wage Garnishment By Filing for Bankruptcy?
Wage garnishment attorneys can advise you on the best ways to stop wage garnishment from being withdrawn from your pay. Choosing to claim bankruptcy with the help of a bankruptcy attorney can be a money-saving solution for some individuals.
Once a bankruptcy petition has been filed, it will stop wage garnishments from most creditors, as you will receive an automatic stay. Per the bankruptcy code, an automatic stay will keep the creditor from harassing you about your debt or taking action to garnish your wages. Filing bankruptcy protects your disposable earnings while you and your bankruptcy attorney craft a plan to defend your money.
Discuss Bankruptcy With a Skilled Wage Garnishment Attorney
Some bankruptcy attorneys offer a free consultation, allowing you to discuss your desire to prevent wage garnishment and create a plan for seeking debt relief. Then, depending on your situation, they may recommend you file for bankruptcy.
However, it’s essential to remember that every circumstance is unique, and your attorney may determine that you shouldn’t file for bankruptcy. When you work with an experienced attorney, you can trust that they will exhaust every possibility to protect your wages from being garnished.
Get your FREE consultation now
Damiens Law Firm, PLLC is here to help you evaluate your legal options and find a solution that can alleviate the pain of wage garnishment.