How to Stop Payroll Garnishment & Levy
A payroll garnishment is also called a wage garnishment. It is a legal procedure that requires the employer to withhold a certain portion of the employee's paycheck to fulfill a debt the employee owes. A legal entity, such as the IRS, can garnish/levy a debtor's wages without a court order, providing it satisfies the legal criteria. This includes sending the debtor a levy notice 30 days prior to imposing the wage levy. Once a wage garnishment/levy is enforced, the issuing institution may be reluctant to stop it. Still, there are ways to accomplish this.
Other People Are Reading
Instructions
-
-
1
Appeal the garnishment/levy if you disagree with it. The garnishment paperwork includes instructions on how to file an appeal if you object to the garnishment. For instance, if you feel the IRS made a procedural error in imposing the wage levy, request a collection due process hearing with the IRS office stated on your levy notice. File the request within the time frame listed on the paperwork.
-
2
Contact the issuing institution and make a payment arrangement. A payroll garnishment/levy is usually a last resort method the institution employs to get you to pay the debt. Therefore, it may be able to devise an installment plan and stop the garnishment.
-
-
3
File a hardship claim. If the payroll garnishment or wage levy is consuming too much of your living expenses, file a "claim of exemption" with the issuing court. Visit your local courthouse to obtain the form. To convince the judge that the garnishment is causing you hardship, you must show proof of your monthly income and expenses. For an IRS wage levy, complete and mail Form 433-F (Collection Information Sheet) to the IRS. Winning a hardship claim can reduce your payments or stop the garnishment until your financial situation has improved.
-
4
Pay off the amount due in a lump sum or let the garnishment run its course. Once the total due is paid off, the garnishment stops. If you want to make a lump-sum payment, contact the issuing institution. If you need time to gather the money, the issuer may delay collection activity and give you time. It may also be willing to accept a settlement, which is a lump-sum payment for less than what you actually owe.
-
1
Tips & Warnings
Your employer cannot stop the wage garnishment without permission of the issuing institution.
The IRS has a program called "Offer in Compromise" that allows qualified taxpayers to settle delinquent taxes for less than what is owed. When making the settlement request, you must send in 20 percent of the total offer, which is nonrefundable. Consult a tax expert when taking this route.
References
Resources
- Photo Credit law courts image by Peter Helin from Fotolia.com
