Wage garnishment is a legal procedure through which a specific percentage of your income is withheld in order to pay off a debt. For your wages to be garnished, someone would have had to issue a court order.
Pearson Butler is not like other large tax firms that may charge you an arm and a leg just to help you fill out and submit paperwork. Our team of tax relief professionals believes every client deserves the right to personally meet with their attorney to help stop collections as quickly as possible and work out a negotiation deal that is in their best interests. Each tax relief lawyer also has experience in penalty abatement, installment agreements, and trust fund penalties.
To learn more, continue reading the questions and answers listed below, or call the team at Pearson Butler at (800) 265-2314 for information that applies to your unique case.
Will the IRS Garnish My Retirement Pay?
If you currently owe the IRS past due federal income taxes, they have the right to garnish your wages. In the legal world, this is a process that is known as a levy. The levy will allow the IRS to go after your actual retirement account and/or the payments that you receive. There are regulations in place to limit how much money the IRS can garnish from your retirement pay.
There are restrictions that prevent the IRS from garnishing any of your retirement benefits that you receive because you needed them. This means if you are receiving Supplemental Security Income (SSI) due to age or illness, the IRS is not allowed to garnish that income.
The IRS is also restricted for removing funds that you are not actually entitled to. This means that if you are still employed and you are not permitted to remove any money from your retirement fund yet, the IRS cannot remove any money either.
Can the IRS Garnish My Social Security Check?
Legally, whether the IRS can garnish your social security check depends on who you owe money to. Financial creditors, such as those with whom you have unpaid cell phone bills and unpaid utility bills and financial institutions that may have lent you money or given you a credit card are unable to garnish your social security check. If you owe money to the government, however, the government has the access and rights to garnish your social security check.
The federal government has the right to garnish nearly any of your sources of income (including your social security) when they are collecting money to pay off different debts including:
- Federal student loans
- Federal income taxes
- Child support
- Nontax debt
Keep in mind that this must be a Social Security check and not Supplemental Security Income. The government (or anyone else) is never allowed to garnish Supplemental Security Income.
Where Does Child Support & Alimony Come into Play?
Many restrictions come into play when it comes to garnishing wages for child support and/or alimony. Garnishment laws make it possible for as much as 50% of your disposable income to be garnished for alimony or child support if you have another child or spouse you are also supporting. If you are not supporting anyone other than yourself, garnishing laws make it possible to garnish 60% of your disposable income.
What Is Disposable Income?
Disposable is another word used in place of the phrase "capable of being thrown away." This is the income that you have left over after you've paid all your bills. The government is never going to garnish your wages to the point where you are unable to pay your rent, buy groceries, or keep your lights on. They do not, however, feel that you need very much additional money on top of paying your bills.
As long as you have paid all of your bills and have food to eat, the government feels that 50% of your extra spending money, as most people like to call it, should be given to child support, alimony, or other significant debts that you owe.
Can a Lawyer Help Me Stop Wage Garnishment?
It can be stressful to deal with having your wages garnished on your own. This is especially true if you have additional debts that you are trying to pay off including a mortgage, medical bills, credit cards, and/or car payments. Fortunately, an experienced tax attorney can help.
You have a lot of different options to consider and an experienced lawyer can help you figure out which option is the best. The most important thing you can do is remind yourself that options are available. With the right resources and a good lawyer, you can resolve these issues.
Your lawyer may offer such options as:
- Compromise with the debt collector
- Installment agreement
- Payroll taxes
- Innocent spouse relief
- Offshore accounts
Most people are surprised to learn that the IRS is more than willing to work with them to set up a workable solution that pays off the debt. The problem is figuring out how to approach the IRS. This is where having an experienced tax relief attorney will come in handy.
Your lawyer will know what paperwork to fill out, what needs to be said, and who needs to be contacted in order to work out a better deal than the one you currently have.
Do I Have to Consider Bankruptcy?
Bankruptcy is not always the best answer to serious financial problems. It really depends on how deep in debt you are. If you are someone who owes more taxes that you can realistically pay off, bankruptcy may be your best option. The lawyer you hire should be able to help you determine whether this is the best answer to your problems.
You should never feel trapped or defeated because your wages are being garnished and you should never struggle to pay any of your bills as a result. If you do feel lost or distressed about garnished wages and overdue taxes, put the attorneys at Pearson Butler to work for you.
Call the firm today at (800) 265-2314 or online.