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Seized Wages? Steps to Reversal

written by: •edited by: Jean Scheid•updated: 6/11/2011

Economic challenges often mean that people are living paycheck to paycheck. One of the worst things that can happen in these cases is opening up a pay envelope and finding that the check is a lot less than anticipated. Generally, garnishments can be reversed if the proper steps are followed.

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    Notifications Lost in the Mail

    Federal Wage Garnishments  The federal government must notify you thirty days prior to garnishing your wages. Before the garnishment starts, you may be wondering how can you stop a federal wage garnishment. Fortunately the time period should allow you time to negotiate a settlement or to make alternative payment arrangements if you start the process immediately. It is important to remember that the federal government is only required to notify you at your last known address. This leaves plenty of room for error since the post office does not forward mail indefinitely. If you have moved, it could mean that there is a chance that you may not receive the notification. The end result of lost mail means that it is possible to find out that wages have been garnished only when the employer begins paying as directed in the garnishment order.

    Those who are facing a potential wage garnishment should first and foremost understand their rights under the wage garnishment laws. There are measures in place that protect employees subjected to wage garnishment that set limits on the amount of wages that may be garnished. Unfortunately, those who have a wage garnishment for back taxes may find as much as 80% of their wages have been seized. This is a significant loss and may cause additional financial hardship. Unlike other creditors however, the IRS has a great deal of leeway when it comes to garnishing wages. Taxpayers can contact the Internal Revenue Service and explore some of the alternative methods of negotiating with the IRS to settle debt, although this may take some time and the garnishment will remain in effect until it is resolved.

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    An Ounce of Prevention

    checklist Prior to wages being garnished, a debtor has the right to be notified at least thirty days in advance. Regardless of the type of garnishment - child support, taxes, defaulted student loans or other debts - there would be a garnishment notification sent to the debtor. For those who are facing wage garnishment, one of their first questions on receiving the notification is how can you stop a federal wage garnishment. Here are some options:

    Contact the agency - Whether the wage garnishment is due to taxes owed or defaulted student loans, it is imperative that the agency be contacted immediately. It may be possible to work out a payment plan, ask for a deferral or negotiate a settlement. Clearly this is one of the best options when facing wage garnishment.

    Contact an attorney - Another possible option is to contact someone who is licensed to practice employment law. Since the wage garnishment laws are mandated by the Department of Labor, an attorney may help you decide what options are available to you.

    File Bankruptcy - The least desirable option is to file bankruptcy. It is important to note that filing bankruptcy due to student loans or taxes owed will not discharge these debts, regardless of the type of bankruptcy filed. However, filing a Chapter 13 bankruptcy can allow the debtor to set up a reasonable payment plan that is easier managed than allowing the wage garnishment.

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    Stopping Problems After the Fact

    options Employees who are having a portion of their wages seized should be aware that there are wage garnishment rights that can help protect them. The same remedies that were applicable prior to wage garnishing are still available to a debtor including negotiating, filing bankruptcy and contacting an attorney for advice. There are also laws in place that help protect employees due to their wages being seized by government entities or through judgments..

    What many employees do not know is that once their wages have begun to be seized, they cannot be fired from their job because of the garnishment. In addition, employees cannot be demoted or have their hours reduced for this reason alone. This is for first time wage garnishment only. However, if you voluntarily leave your employment, the wage garnishment automatically ceases and a debtor (including the government) would need to start the process again.

    Anyone who is facing wage garnishment and is interested in finding out the answer to the question how can you stop a federal wage garnishment should contact a labor or tax attorney. In some cases, filing an appeal, requesting a temporary reduction due to financial hardship or filing bankruptcy can help stop wage seizures.

    Remember that while it may be temporarily expedient to quit a job for the purpose of stopping the garnishment this is a temporary salve only. Finding a permanent solution is more beneficial in the long run.

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    1. US Department of Labor: Wages and Hours Worked - Wage Garnishment
    2. Loan Safe Simms, Johnny: Can a student loan wage garnishment be stopped?
    3. Tax Debt Help Garnishment FAQs

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