Will Filing Bankruptcy Stop IRS Wage Garnishment?

Written by Columbia Bankrutpcy Attorney David W. Melnyk

Is the IRS garnishing your wages?  You work very hard for every dime of your paycheck.  To see a large percentage of it taken from you by way of IRS wage garnishment is a big blow.  If you are like most people you live either pay check to pay check or something close to that.

After proper notice the IRS can seize over 50% of your paycheck subject to a few limited exemptions.  The IRS wage garnishment will last until the IRS tells your employer to stop it.  Under the law your employer does not have a choice.  If your employer receives notice of the garnishment it must comply or it will have big IRS problems of its own.

What are your options?  You can pay your tax balance in full.  However, if  this was possible you probably would have done so long before the wage garnishment became an issue.  You may have success communicating directly with the IRS to work out a payment plan to pay your back taxes.    Depending upon the total amount of the IRS debt, and the years for which you owe, the IRS may offer a reasonable payment plan.  Acceptance of the repayment plan may stop the garnishment.

A more powerful option available to you is to file a Chapter 13 Bankruptcy.  Once the case has been filed your employer must stop taking your hard earned money and sending it directly to the IRS.  We will compute a monthly payment that you will send in as a Chapter 13 Bankruptcy payment.  This payment will include the amount necessary to satisfy the IRS.  We may be able to reduce  the total amount that you are required to pay to the IRS.  The amount that you pay back will be without any additional penalties or interest in most cases.  While you are in the bankruptcy, the IRS will not garnish your wages.

Please note that filing a Chapter 13 Bankruptcy does not totally relieve you from your tax obligation.  However, it will provide immediate relief from the wage garnishment and will prohibit the IRS from harassing you about your tax obligation.

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