Gaining a Basic Understanding of IRS Garnishments, Legal Holds and Court Levies
Definition The term garnishment refers to a legal procedure that calls for the seizure of a portion of one's earnings to pay off an outstanding debt.
This is usually done through an employer who is ordered by the court to keep or withhold a percentage of one's disposable income.
There are other types of asset seizures that can be used and are usually utilized by entities such as the IRS or state tax collection agencies in the processing of collecting outstanding levies or unpaid taxes.
In some special cases, an employee will voluntarily opt to forfeit part of his or her wages to pay off a debt.
In this case there is usually no court order needed.
The entities levying the garnishment penalties are not at liberty to collect just about any amount they wish just because a defendant has been proven to owe a debt.
The law offers some protections to the debtor.
The Consumer Credit Protection Act sets limits on the amount that can be seized by court order from an employee.
This is usually after the court has determined the amount that is fair and just and the employee has provided an honest assessment of his assets and liabilities.
This law is enforced in all the United States including US territories and is protects anyone who earns an income in the form of wages, commissions, salary and the like.
It also protects pension and retirement income.
We will not tackle the full ramifications of this law here.
This is determined by how much the employee earns.
This court first deducts federal, state and local taxes, then looks at unemployment insurance and Social Security as required by law.
Then the employee fills out an assessment of income and expenditure.
This then gives the court an idea of how much to garnish.
The law stipulates exactly how much may be seized within a certain period and also how many times the deductions are made.
Other than for child support, bankruptcy, alimony and federal tax, the wage garnishment may not exceed 25% of the employee's disposable income.
Sometimes there is a conflict between state and federal laws.
If this is the case, the lower amount is taken.
Don't ignore the IRS Wage garnishments are usually done as a last resort.
This is after many other options have been explored and exhausted.
Sometimes someone has changed their address and phone number and so has not been receiving mailed notifications.
This can be very unfortunate because the IRS takes it to mean you are ignoring them.
If they are unable to elicit a response from you then garnishment may be the next logical step.
This is usually done through an employer who is ordered by the court to keep or withhold a percentage of one's disposable income.
There are other types of asset seizures that can be used and are usually utilized by entities such as the IRS or state tax collection agencies in the processing of collecting outstanding levies or unpaid taxes.
In some special cases, an employee will voluntarily opt to forfeit part of his or her wages to pay off a debt.
In this case there is usually no court order needed.
The entities levying the garnishment penalties are not at liberty to collect just about any amount they wish just because a defendant has been proven to owe a debt.
The law offers some protections to the debtor.
The Consumer Credit Protection Act sets limits on the amount that can be seized by court order from an employee.
This is usually after the court has determined the amount that is fair and just and the employee has provided an honest assessment of his assets and liabilities.
This law is enforced in all the United States including US territories and is protects anyone who earns an income in the form of wages, commissions, salary and the like.
It also protects pension and retirement income.
We will not tackle the full ramifications of this law here.
This is determined by how much the employee earns.
This court first deducts federal, state and local taxes, then looks at unemployment insurance and Social Security as required by law.
Then the employee fills out an assessment of income and expenditure.
This then gives the court an idea of how much to garnish.
The law stipulates exactly how much may be seized within a certain period and also how many times the deductions are made.
Other than for child support, bankruptcy, alimony and federal tax, the wage garnishment may not exceed 25% of the employee's disposable income.
Sometimes there is a conflict between state and federal laws.
If this is the case, the lower amount is taken.
Don't ignore the IRS Wage garnishments are usually done as a last resort.
This is after many other options have been explored and exhausted.
Sometimes someone has changed their address and phone number and so has not been receiving mailed notifications.
This can be very unfortunate because the IRS takes it to mean you are ignoring them.
If they are unable to elicit a response from you then garnishment may be the next logical step.
