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Does bankruptcy suspend IRS wage garnishment, and for how long?

Does bankruptcy suspend IRS wage garnishment, and for how long?

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:

When a bankruptcy petition is filed, an automatic stay is put in place. This stay prevents creditors, including the IRS, from continuing any collection actions, such as wage garnishment, for debts that existed before the bankruptcy case began. The only exception is for ongoing child or family support obligations mandated by a court. This automatic stay stops lawsuits, collection calls, repossessions, foreclosures, and garnishments. It remains in effect until a judge lifts it, the debtor receives a discharge, or the property is no longer part of the bankruptcy estate (11 U.S.C. § 362).

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.