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What effect does filing bankruptcy have on a wage garnishment?

What effect does filing bankruptcy have on a wage garnishment?

Q: How long does it take for the IRS to garnish wages?

The IRS can begin garnishing wages after sending a series of notices and if the tax debt remains unpaid. Typically, this process can take several months, as the IRS must follow specific procedures, including providing notice of intent to levy. Once the process starts, garnishment can occur relatively quickly.

Q: How long does the IRS have to come after you for unpaid taxes?

The IRS generally has ten years from the date of assessment to collect unpaid taxes. This period is known as the 'Collection Statute Expiration Date' (CSED). After this time, the IRS can no longer take collection actions, such as garnishment or levies, to recover the debt.

Q: How long until IRS garnished wages for unpaid?

Once the IRS has assessed your tax liability and sent the required notices, they can initiate wage garnishment. This process can take several months, as the IRS is required to send a notice of intent to levy and allow time for you to respond or resolve the debt before garnishment begins.

Full question:

Will either chapter 7 or 13 suspend a wage garnishment by the IRS for what time length?

Category: Bankruptcy
Date: 04/07/2025
State: North Carolina

Answer:

Once any petition for bankruptcy is filed, the bankruptcy laws provide for an automatic stay which is an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. See 11 U.S.C. 362. This means that creditors are no longer entitled to garnish wages for debts that existed at the beginning of the bankruptcy case. The only exception may be for on-going child or family support ordered by a court.

The automatic stay prohibits the beginning or continuing of law suits, any collection calls, repossessions, foreclosure sales, and garnishment or levies.

The automatic stay remains in effect until a judge lifts the stay at the request of a creditor;
the debtor gets a discharge; or the item of property is no longer property of the estate.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How long does it take to stop a garnishment?

Once you file for bankruptcy, an automatic stay is immediately put into effect, stopping wage garnishments. However, it may take a few days for your employer to process the notice of the stay and stop the garnishment. If you are not filing for bankruptcy, the time to stop a garnishment can vary depending on the process you follow, such as negotiating with the creditor or obtaining a court order.

Can a debt collector garnish your wages after 7 years?

Generally, a debt collector can garnish your wages as long as the debt is valid and they have obtained a court judgment against you. The seven-year mark typically refers to how long negative information can remain on your credit report, not how long a creditor can pursue collection actions. If a judgment is still valid, garnishment can occur regardless of the age of the debt.

When can IRS debt be discharged in Chapter 7?

IRS debt can be discharged in Chapter 7 bankruptcy if it meets specific criteria: the tax return was due at least three years before filing, the return was filed at least two years prior, and the tax was assessed at least 240 days before filing. Additionally, the taxpayer must not have committed fraud or willful evasion regarding the tax.