Banking Business And Entrepreneurship

Garnishee Order In Banking And Best Way To Stop IRS Garnishment

0 27

This article will educate you on garnishee order in banking and best way to stop irs garnishment of your wages or salary. 

A Garnishee order is an order of the court obtained by a judgment creditor attaching funds in the hands of a third person who owes money to the judgment debtor. It can also be defined as an oder from the court, obtained by a judgment creditor ordering that a debtor owing or accruing due from a third party to the judgment debtor at the time of service of the order be paid to the judgement creditor through the court.

Garnishee Order In Banking And Best Way To Stop IRS Garnishment

An example of garnishee order in banking,  let’s assume that Arsenal FC owes Henry €5000.00 and Henry obtained a court judgment against Arsenal FC to pay Henry the €5000.00. Let’s us assume that Arsenal FC has account with Gtbank, and there’s a credit balance in his account with Gtbank. Henry can obtain a garnishee order against Arsenal FC credit balance in his account with Gtbank. For this example, Arsenal FC is the judgment debtor, Henry is the judgment creditor while Gtbank is the third party or the garnishee. 

Types of Garnishee Order And irs Garnishment 

 
1. Garnishee Order Nisi: under this, the oder may attach all money owing by the third party to the judgment debtor or for a limited sum of money. An order Nisi is only an interim order which though it attaches the sum immediately the third party should not pay the sum required over to the court until the order is made absolute.
2. Garnishee Summons : The receipt of a garnishee summons means that the the third party should pay the judgment debtor’s money over to the court as stipulated.
When a third party e.g a bank receives a garnishee order, he must do the following
>>> If the order was received at the bank’s head office, the branch where the customer has an account should be informed immediately.
>>>The customer should be informed about the order and his admission or denial of the debt should be sort in writing.
>>> If the customer’s account is in debt, then the order should be withdrawn by the judgment creditor’s solicitors since no money is attached.
>>> If the order is for limited amount, then the amount involved plus charges should be kept in a separate suspense account so that the account can continue without stopping it.
>>> However, if the order attaches all debts owing or accruing due to the customer without limit, then the account should be stopped.
As soon as the order is received by the bank, the bank should set off all the customer’s account excluding the a loan account.
Garnishee Order In Banking And Best Way To Stop IRS Garnishment

Best Way to Stop IRS Garnishment

IRS is a body that has the power to legally seize any income you make to satisfy federal tax debt or taxes owed, which can be wages, salary, commissions, and bonuses. The difference between the IRS and most creditors, however, is that the IRS does not need to take you to court to get a judgment in order to garnish your wages, and the IRS can garnish more of your wages than a regular creditor can garnish.
So the best way to stop IRS Garnishment on your wages, salary applies below 
 
1. Uncollectible Due to Financial Hardship: If you can prove to the IRS that a wage garnishment or other collection action would prevent you from meeting the basic needs of you and your family, then the IRS may temporarily cease its collections efforts for months and even years. In this case, you must show that collection of the debt would be unfair because your financial circumstances are so bad. The IRS will require financials.
2. Pay Taxes in Full: Once you pay your  taxes in full, the wage garnishment will immediately stop.
3. Enter Into an Installment Agreement: An installment agreement is a plan between you and the IRS that says you will pay your tax debt in monthly increments until everything has been completely settled. Once you have an installment agreement accepted by the IRS, the wage garnishment will be stopped. You will remain in good standing with the IRS as long as you keep up on your monthly payments and do not default on your agreement. The IRS prefers this method to be used if taxes cannot be paid in full.
4. Make them an offer they can’t refuse(compromise): This isn’t easy to get, but it’s worth a try. Basically, this is a situation where you get the IRS to accept less than what you owe. Before going down this road, you would be smart to hire a good tax attorney who has a lot of experience dealing with similar problems.
Hope you learnt something about garnishee order in banking and also how to stop irs Garnishment of your wages and salary, and don’t forget to use the share buttons thanks.

Leave A Reply

Your email address will not be published.