Information About Garnishment on IRS Debt & Judgment

My husband's wages are being garnished due to IRS debt. Now another company wants to garnish our wages. How does this work?

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Bill's Answer: Answered by Daniel Cohen

The answer to your question depends largely on your state’s laws regarding garnishments. In some states, garnishments expire and must be renewed periodically if the judgment creditor wishes the garnishment to continue. Many states, however, allow garnishment orders to continue indefinitely until the balance of the judgment, plus interest, costs, and attorney’s fees are paid. Some states do not allow regular judgment creditors to garnish wages at all. The IRS is not regulated by state laws related to garnishment, and it is generally allowed to take more than 25% of a tax debtor’s wages; in your husband’s case, it sounds like the IRS is taking 25% of his wages in order to prevent this second garnishment from proceeding until your husband’s tax liability is paid.

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If you live in a state in which garnishments expire, the garnishment order that was served on your husband’s employer by the judgment creditor may expire before the tax debt is paid off, depending on how much is owed to the IRS and how much they are taking from your husband’s pay each month. I would encourage your husband to contact his payroll or human resources department at work to ask about your state’s garnishment laws and whether or not the garnishment order issued by the judgment creditor will expire.

To learn more about debt collection laws in your state, see the Bills.com Collection Laws & Exemptions by State resource and Wage Garnishment article.

Consult with an attorney in your state to discuss the options available to you to resolve this judgment and the resulting wage garnishment. A qualified consumer rights or bankruptcy attorney should be able to review your financial situation and tell you what legal options are available to you to stop or reduce the wage garnishment. For example, if you or your husband were never served with a copy of the court complaint filed against you, your attorney may be able to help you file a motion with the court to set aside the judgment entered against you. Your attorney can also discuss filing bankruptcy protection with you, as bankruptcy is a definitive solution to the type of problems you are facing with this creditor. If you would like to read more about bankruptcy, I invite you to visit the Bills.com bankruptcy resources page, where you can learn about the types of consumer bankruptcy and how filing bankruptcy may affect your financial situation.

It is unlikely that you will be able to stop the collection of this outstanding tax obligation, as the IRS’s power to enforce its debts tends to be greater than those of other creditors. Even if you file for bankruptcy protection, it is unlikely that your tax debt can be discharged through the bankruptcy. That said, the IRS is generally willing to work with taxpayers who express a sincere desire to address their tax obligations and who can show that the tax burden is causing them an undue hardship. For example, the IRS may be willing to set up voluntary payments with your husband if he can resolve the other wage garnishment order that has been filed against him. The IRS may even be willing to accept a small portion of the actual amount you owe to settle this obligation if you qualify under the IRS “offer in compromise” guidelines. Again, I encourage you to discuss your financial situation with your attorney to determine the best way to resolve this tax debt. If you would like to read more about the options available to taxpayers struggling with their tax obligations, I encourage you to visit the Bills.com IRS debt help page.

Regardless of how you choose to address your financial difficulties, you should know that there are various options available to you, and that this is not a hopeless situation.

I hope that this information helps you Find. Learn. Save.

Best,

Bill

Bills.com

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Comments (12)


Dwight J.
August 18, 2013
I am in California and I am paid bi-weekly (every two weeks). I have a court ordered spousal garnishment and a new IRS garnishment. On my last paycheck after statuatory taxes, I netted $1,703 (after taxes). My spousal garnishment amounted to $508. I am OK with this but the IRS took $538. This is 61% of my net income. Other than delinquent child or spousal support, I thought the maximum creditors could take was 25% of my disposable income. I thought my spousal garnishment would "trump" the IRS garnishment. Can you clarify this? Thanks Bill.
Bills.com
August 19, 2013
Dwight, if a taxpayer ends up with an IRS wage garnishment, the financial harm can be extreme. The IRS is not limited to 25% of the disposable income. How much they can take depends on how much you make and how many dependents you support. This table shows the amount of income that is exempt from an IRS levy. Separately, be careful of any funds in a bank account that has your name on it. A bank levy could hit your account at any time, taking out any amount there, up to the total debt that you owe. I recommend that you try to set up a payment plan with the IRS.
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Dwight J.
Carlsbad, CA  |  August 24, 2013
Thanks for the reply. Why does the garnishment info provided and many of the illustrations frequent refer to a maximum garnishment of 25% of disposable income(except for past child support)when that isn't true for the IRS?
Bills.com
August 26, 2013
The 25% maximum applies to most judgment-creditors. It does not apply to certain other debts, such as an IRS tax debt or repayment of delinquent child support.
Charli C.
Brooklyn, NY  |  February 05, 2012
I have a series of questions, most about New York. Is a Chase home equity home line of credit a secured debt or unsecured? Is NY a community property state? What is statute of limitations in NY? What is a summary judgement in NY? In Ny how much percentage can be taken from wage garnishment?
Bills.com
February 07, 2012
A home equity line of credit, whether issued by Chase or any other lender, is a secured loan. New York is not a community property state. A summary judgment in NY is the same as in any state, a judgment issued without a trial.

How much can be garnished from your pay in New York depends on who is garnishing you. For a creditor like a credit card company, the maximum is ten percent of your gross income, or the federal maximum, whichever is less. If it is the IRS that is garnishing you, the IRS has different amounts that can be garnished, depending on your filing status and the number of exemptions you are entitled to claim. An IRS garnishment can take a huge bite out of a paycheck. To see how an IRS garnishment can affect you, you can view the IRS' Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income.
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Bills.com
May 21, 2010
You are asking about what is known in the law as remedies. I am reluctant to offer any observations on how to do-it-yourself because in many jurisdictions not following the law exactly can expose the judgment-creditor to liability. Hire an attorney or sell the debt to a collection agent.
Rustie A.
May 21, 2010
I am a land lord in the State of Florida and I have several different tenants that left owing me money and I received a court judgement on all three for the money they owe me. I am wanting to file a garnishment against the tax refunds they receive my self, what steps do I take without a lawyer.
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Bills.com
January 15, 2010
You did not include your state of residence so it it impossible for me to give you a meaningful answer because these collections laws are so state-specific. You may wish to consider selling the debt to a collection agent so that you can put the matter behind you.
James A.
January 15, 2010
I am a land lord and I have three different tenants that left owing me money and I received a court judgement on all three for the money they owe me. I am wanting to file a garnishment against the tax refunds they receive my self, what steps do I take without a lawyer.
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Bills.com
January 28, 2009
That depends on how the court awards the settlement to you. Your attorney might be able to put a request for rights on the refund check, but the lady can ask for relief and installment payments as well. The court has the final say.
Kim .
January 28, 2009
I have sued some lady for her dog attacking mine and bitting off his ear. I have won my judgement. Can I take her refund check from the IRS if she gets one, and how would I go about doing so?
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