It isn’t something you hear about often, but having a bank account or paycheck garnished to satisfy a debt happens far more than one would think. Creditors take unpaid debts seriously and may result in such measures in order to collect on a debt.
A wage garnishment is a debt collection tool in which a creditor will take a portion of your money to satisfy a debt. Typically, the order requires your employer to pay the creditor a portion of your paycheck. The amount of wages that is garnished out of your paycheck is removed to pay the creditor before your check is given to you and, often, you have little recourse over the money that is taken through garnishment. Once the money has been garnished and given to the creditor, you cannot get it back. However, there are ways to stop any current garnishment order and prevent your wages from being garnished.
Your debts are your responsibility and paying them in full is always the best way to resolve your debt problems. However, if you are experiencing financial trouble and cannot afford to pay your debts, you may be able to negotiate a repayment plan with your creditor. Many times, creditors are willing to negotiate a payment plan and will stop a garnishment order once you begin making payments. Bankruptcy is another tool that can resolve your debt issues and protect your wages from garnishment. In bankruptcy, an automatic stay is issued to prevent any creditors from collecting on the debt or garnishing your wages.
Owing the IRS money is never a position anyone wants to be in, and unpaid taxes are taken very seriously by the IRS. If you fail to pay a tax debt, the IRS may result to wage or bank account garnishment order to collect on the unpaid taxes. A bank garnishment order allows the IRS to take any money you have in a checking, savings or retirement account in effort to fulfill the debt payment. Having your bank account garnished can result in serious financial consequences.
Like other creditors, the IRS does offer a few ways to resolve tax debts without resorting to garnishments. It is always best to pay your debt in full as quickly as possible; however, the IRS does know that not everyone can afford to pay a tax debt in full. The IRS offers payment installment plans and debt negotiation options, also known as an offer in compromise. If you cannot afford to pay your tax debts, contact the IRS right away to discuss your options. A tax lawyer can also help you negotiate with the IRS and stop a garnishment order before your accounts are seized.