What Is Wage Garnishment And How Does It Work

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What is the first thing that comes to your mind when you listen to the word “garnishment?” Most probably, you imagination circles around a meaty pork-chop plate or a parsley sprig. You might also think about the crispy celery stick that comes with a glass of Bloody Mary. These garnish types make for an enjoyable and pleasing drink or meal. Does this mean a wage garnishment is all about adding cilantro to your paycheck? Unfortunately, this is not the case!

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What Is a Wage Garnishment?

To pay for your outstanding tax debt, an employer may legally withhold your earnings. Such a practice is referred to as wage garnishment. A common wage garnishment example is when the IRS applies a levy on your wages so they can collect an outstanding tax debt.

Apart from paying for a tax debt, there are some other factors behind wage garnishment. These scenarios can include consumer debt, child support, or student loan debts. Wage garnishment is quite common, and a study revealed that one in fourteen employees holds some sort of wage garnishment.

What Causes Wage Garnishment?

Wage garnishment begins after a creditor needs your employer’s assistance in withholding some portion of money from your paycheck. Subsequently, your withheld wages are duly paid by your employer to the person to whom you owe money.

In some cases, a court order initiates wage garnishment. The following scenarios do not need a court order.

  • Child support
  • Back taxes
  • Federal student loans

A notice precedes wage garnishment. For example, the IRS may notify you that they plan to target you with the garnishment. However, their notice allows for ample of time during which you can rectify your errors and stop the IRS-induced wage garnishment.

Typically, prior notice and outstanding tax debt are the main reasons behind wage garnishment. Interestingly, in recent times, a Senate proposal called out for making garnishment mandatory for any individual with a student loan debt. If the proposal passes through, it can allow employers to apply deductions on paychecks of those employees who have a federal student loan.

What Wage Garnishment Rights Do You Have?

Although the prospect of wage garnishment may unnerve you, you must know what rights you have in such a situation.

  • Garnishment cannot begin until you receive a legal notification.
  • Weekly restrictions apply on some portion of your wages for garnishment. It can include factors like where you reside, who garnishes your wages, who heads your household, or how many kids do you have. When the IRS garnishes your wages, it does provide an informative table that shows you exemptions on your levies.
  • No one can fire you from your current job as long as your garnished wages are related to a single debt type. If you have more one debt, there is no law that can protect you from termination notice.
  • If you are confident that something is amiss and you are not supposed to owe any debt, you can challenge the wage garnishment. In order to do this, you are going to be involved in an extensive process that comprises of several appeals, particularly when an IRS tax debt has caused the wage garnishment.

How to Stop Wage Garnishment?

By now, you have probably gained a basic understanding of how wage garnishment works. You can now focus on how to stop wage garnishment.

You cannot stop wage garnishment as long as you do not pay the complete debt balance. In case you want to stop the IRS wage garnishment, such as when you are dealing with back taxes, your paid balance can include penalties, interest, and collection fees that have accrued right from the beginning.

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Not everyone can pay the complete debt. Fortunately, for such individuals, a tax preparation company serves as the key that can unlock the doors of peace, .i.e. guide them regarding their available options. For example, reliable tax preparation companies setup a solution such as a payment plan to stop IRS wage garnishment. If this plan is approved by the IRS, they will no longer withhold your paycheck earnings, allowing you to get your life back on track!

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