Tax Law Los Angeles
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.
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.
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.
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.
To find out more about bank and wage levy release, and learn if you qualify, contact us today!