IRS wage garnishment 1 week after filing

[619jeffrey]

I filed for ch.13 on aug 31 and the irs garnished $1200 out of a $1400 check on sept 7. My question is am i able to recover that money. Wheni asked my lawyer he just said that sometimes it gets through but made it seem like there was nothing i could do. I told him it'll be hard to make my first payment and rent without that money. Thanks, jeff

[LadyInTheRed]

Welcome to BKForum. Sorry about the unfortunate timing on the garnish. Not a great way to start your Chap 13.

I don't know if you can get the money back, but it seems like you should. If your attorney won't do anything, perhaps a call to the IRS will help. Hopefully, somebody with more knowledge on the issue will come along. But, keep in mind that the forum tends to be slow on the weekends.

Even if you can get the money back, I bet it won't be soon enough to pay your rent and plan payment. You are going to need to figure out how to come up with the cash. If I were you, I'd make the plan payment the priority. If you can't get all of the rent together, let your landlord know when you will pay the rest. A little communication can go a long way when the rent is late.

ETA: I edited the title of your thread so that it may attract the attention of somebody who has some experience or knowledge about your situation.

[HHM]

The Issue here is timing. Was this the "first" garnishment from the IRS, or had the IRS already been garnishing. Also, how often are you paid and what is the structure? For example, Are you paid weekly and paid one week in arrears (meaning, the pay check on Sept 7 for work done the week of August 27-31. If that is the case, you may be out of luck for most of it since the money was already "earned" prior to you filing BK. At most, you would get an amount back equal to the pay for Friday, Aug 31, the day you filed BK. Or, at least, that is what the IRS would argue.

You should be able to get some of it back, as stated, at least for Aug. 31 pay. Moreover, even by IRS standards, the amount garnished seems high, the IRS doesn't usually garnish that much, as such, I suspect your payroll department doesn't know how to calculate the garnishment amount correctly. In any event, once you file BK, even if a creditor does not have notice, they are not allowed to "retain" funds garnished in violation of the automatic stay. Now, you won't be able to get them for any sort of sanction for violating the automatic stay since it is unlikely they had yet to receive notice of the BK. Nevertheless, if the garnishment was in fact in violation, then you can get the money back (but see paragraph 1).

Lastly, at the very least, you need to immediately notify your payroll department and the IRS of the BK so they won't garnish your next check.

[AngelinaCat]

Welcome to the forum

Another thought occurred to me: did you get a letter from the IRS through the mail about a month to six weeks prior to this garnishment, warning you that they were intending to start doing this? If you did, did you ignore the letter because you were planning to file?

If you got a letter, and ignored it, that was a bad thing to do. We owed three years of taxes to the IRS, and we got one of those warning letters, threatening that they would start garnishment. The bulk of what we got was 'Hub's SS, a small pension, and what I earned at a PT job. We called the phone number contained in the letter, and immediately started up a payment plan. The person that my husband talked to was very courteous and helpful.

We made payments faithfully for the several months before we were able to file. When we did, we got a letter from the IRS, that the payment plan was in abeyance until after our case was discharged. The bulk of our debt was IRS. Once we were discharged, we got a letter from the IRS telling us how much we still owed and that it was time to start the payments up again. 'Hub called, and the plan was started again. (We were an Asset case, and whatever money the trustee got from us to buy back our non-exempt stuff, went to the IRS debt.)

I hope this helps.

[619jeffrey]

Thanks, for the responses. I got notice they would be garnishing 2 weeks before my wife and i filed. I gave him the letter and he said he would put a stop on it. The amount they took was for 27- 31, i get paid weekly. The amount they took seem excessive though.

[AngelinaCat]

Thanks, for the responses. I got notice they would be garnishing 2 weeks before my wife and i filed. I gave him the letter and he said he would put a stop on it. The amount they took was for 27- 31, i get paid weekly. The amount they took seem excessive though.

I don't really know your circumstances, but here in Florida, a 'Head of Household' can only be garnished about 25%--perhaps lower--per paycheck. As far as I know there are no real limits on what a 'NON-Head of Household' can be garnished.

Sorry to say it, but you should have called the phone number when you got the letter. I know you were/are depending on your lawyer to do everything, but they have other clients, and sometimes the ball gets dropped.

[619jeffrey]

I decided to call my payroll department to see if the irs was going to take money out of this up coming check and they said yes. They said until the irs tells them to stop will they stop taking money out. Im trying to call my lawyer to see what's going on. If they take money out this check again it's definitely going to near impossible to pay rent and make the ch.13 payment