Prevent IRS Garnishments

Exceptions Allowing IRS and Certain Other Wage Garnishment in Texas

irs garnishmentsTexas is one of the few states in the country that generally don’t allow the garnishment of wages for collection of consumer debts. But there are major exceptions where wage garnishments CAN occur:

  • federal taxes
  • child support and alimony
  • student loans
  • your employer is out of state
  • a judgment against you was entered in another state
  • wages deposited into a bank account, including by automatic deposit

The filing of either a Chapter 7 “straight bankruptcy” or Chapter 13 “adjustment of debts” will immediately stop most garnishments either temporarily or permanently. That includes garnishments by the IRS, the focus of this blog post.

IRS Wage Garnishments that Bankruptcy Stops Only Temporarily

Other than most child and spousal support obligations, your bankruptcy filing will stop virtually all garnishments. That includes IRS garnishment of wages.

This happens through the power of the “automatic stay.” That’s the law that automatically goes into effect as soon as your bankruptcy case is filed, and stays—or stops—virtually all collection activity against you or your property. Again this includes most collection efforts by the IRS, including wage garnishments.

But the “automatic stay” lasts only as long as your case is active. That’s generally only about three months in a regular Chapter 7 case. However, if the income tax debt is discharged—legally written off—in that Chapter 7 case, then the IRS can take no further action to collect that debt after the case is over, including no further wage garnishment.

Most income taxes can be discharged simply by the passage of time after the tax return for the income tax was due and that tax return was received by the IRS. More than 2 years must have passed since the tax return was received AND more than 3 years must have passed since that tax return was due (including any granted filing extension). If these conditions are met (and a couple other conditions that are usually not a problem), the tax debt will be discharged and the IRS will not be able to garnish that tax debt ever again.

But if those conditions are not met the income tax would not be discharged in Chapter 7. Then the IRS would be able to resume garnishing your wages as soon as your Chapter 7 case would be finished.

IRS Wage Garnishments that Bankruptcy Stops Permanently

Besides income taxes discharged in a Chapter 7 case, a Chapter 13 case would both immediately and permanently stop garnishments for ALL IRS income taxes. That includes both income taxes that meet the conditions for discharge and those that don’t. You just need to successfully complete the 3-to-5-year Chapter 13 procedure.

How does this work?

Chapter 13 discharges taxes that meet the same timing conditions outlined above. But it also provides a flexible and protected way for you to pay off the remaining tax debts which do not meet the discharge conditions.

So, at the end of the Chapter 13 case you would not owe any more taxes; there would be nothing more for the IRS to garnish.


If you live in the Dallas-Fort Worth Metroplex and owe income taxes, please contact me, Carrie Weir. I’m an experienced a Texas bankruptcy lawyer, serving the areas around Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, Royse City, Sachse, and Rowlett. Please get in touch with me for a free and confidential consultation. You can either call me at 972-772-3083 or use the contact form here.

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