Bank and Wage Levy Release

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Bank and wage levies are a strict legal action that creditors often take to collect a debt owed to them. In addition to the IRS and government agencies, private lenders may also issue a levy on your finances after receiving a legal endorsement. Levies result in a considerable portion of your income being withheld and paid directly to the lender who issued the levy. Fortunately, there are certain circumstances and methods to remove the levy by promising to repay the debt by entering into a contracted agreement.

What is a levy?

Unlike a lien, a levy allows the creditor to use your finances and assets as a form of compensation for all the debt you owe.

A levy is the legal seizure of property to pay a debt. In the United States, the IRS has authority to levy a taxpayer’s property. Examples of property that can be levied include a house, boat, car, or property belonging to the individual even if it is in someone else’s possession.
Levies can also include wages, retirement assets, financial accounts, income from rental properties, licenses, money owed to you, commissions loan value of an insurance policy.

A levy is different from a lien because it takes longer for the property to satisfy the back taxes when a lien is used as collateral for the amount due.

Remember, the IRS or government agencies don’t need any legal permission to issue a levy.

How Are Levies And Wage Garnishment Different?

Bank and Wage Levy Release
Bank and Wage Levy Release

For the most part, levies apply to your financial accounts while garnishment applies to your earnings. Seeing as how levies and garnishments are the two most common ways for a financial institution to recoup owed wages, it’s important to understand each.

We’ve already discussed levies, but what about garnishment? A creditor may obtain a garnishment order against you, forcing your employer to seize a portion of your paycheck automatically and send them to the creditor.

Levies are most frequently used by government agencies such as the IRS or the Department of Education, while private creditors are more likely to use garnishment. Federal agencies, however, are notorious for using garnishment for paying back past due taxes and student loans.

Avoiding Bank And Wage Levies

As is almost always the case where the federal government’s concerned an ounce of prevention may be worth more than a metric ton of paperwork, appeals, referendums, subpoenas, and evidence. Fighting the IRS is a painful, thankless process that will almost certainly not work out in your favor.

That being said, the best way to deal with levies and wage garnishment is quite simply: AVOID THEM ALTOGETHER!

The IRS mainly issues levies against people they believe to uncooperative taxpayers. The smallest amount of effort will go a long way in avoiding a levy.

10 Steps To Avoiding A Levy Or Wage Garnishment

  • Request a 120-Day Extension
  • Negotiate an Installment Agreement
  • Extend an Offer in Compromise
  • Demonstrate Non-collectible Status
  • File Chapter 7 or 13 Bankruptcy
  • Petition for Innocent Spouse Relief
  • Appeal the Notice of Levy
  • Allow the Statute of Limitations to Run
  • Claim IRS Procedural Error
  • File a Request through the Collection Appeals Program
  • How to Get A Levy And Wage Levy Release
  • Prior to placing the levy, the IRS will send notice of their intent at least 30 days before taking action. If you have received any such a letter, the best practice is to consult a professional lawyer or tax expert to learn practical solutions to your problem. However, make sure that you respond to the notice within 21 days. That is usually the maximum time the IRS gives to resolve the issues.

Here are some effective ways to win a bank and wage levy release:

  • One of the main reasons the IRS issues a levy is due to the unresponsiveness of the taxpayer to all the notices sent. The consistent failure to respond results in the IRS seizing your assets or finances.
  • It is highly recommended to hire a tax professional to correspond with the IRS on your behalf. If you try to contact and resolve the issue yourself, there is a greater possibility for dispute.

There are five major circumstances under which the taxpayer may qualify for release of a levy:

  • The due payments or liability for which the IRS issued the levy had been
  • The due payments or liability will be fulfilled if the IRS releases the levy.
  • The taxpayer and the IRS have entered into an agreement that outlines the installment payments for clearing all the dues. This agreement is made following the section 6159.
  • The levy is causing severe financial hardship to the taxpayer.
  • The property on which the levy is issued has a greater market value than the  liability. Thus, the IRS releases the levy based on a portion of the property.

 

To find out more about bank and wage levy release, and learn if you qualify, contact us today!