Garnishment after Filing Chapter 7

[islandgal808]

Came home today to a letter from the IRS informing me that I’m going to be garnished for my wages and letter sent to my employer with 30 days to respond. I included my 2019 taxes with my Chapter 7. My court date was on January 2, 2024. I received my Discharge letter March 2024. So I’m confused! I emailed my Attorney but of course it’s a long Holiday weekend and I can’t stop thinking about it! What can I do? And can they do this? Help

[justbroke]

Just because you included your 2019 taxes, which were last due without penalty in April 2020, means that they are automatically dischargeable.

• So, it would need to have been due without penalty more than 3 years. You would meet that test.
• It would need to have been filed on time; I don't know if you meet that test.
• It would need to have been filed more than 2 years from your filing date in January 2024. (That means it would to have been actually filed before January 2022.
• It would need to have not been for a tax assessed within 240 days of filing

You must meet all of those tests. The IRS is pretty good at getting this correct since it is all computerized these days. If you are having no luck with your attorney, call the IRS Insolvency Department and tell them that you've been discharged and are asking about whether or not your IRS 2019 taxes were "unsecured" and discharged.

Additionally, if there is one more way your IRS 2019 taxes may not have been discharged. If they became an IRS Tax Lien then that could also make them non-dischargeable.

The IRS is generally very easy to do business with when it comes to bankruptcy. I won't provide you the phone number but you can search Google/Bing for "IRS Centralized Insolvency Operation." They are dedicated to bankruptcy filings and are some of most friendly IRS agents you will ever deal with. In fact, your filing was so quick, that the IRS may not have processed your bankruptcy and the agent will be able to tell you all the details. They will also let you know if the IRS considered the tax debt to be non-dischargeable (a/k/a "priority" unsecured debt) and that it would be non-dischargeable.

[justbroke]

Here a very good cheat sheet for how to determine if taxes are dischargeable. Also be aware of tolling issues.

https://www.ctbar.org/docs/default-source/education/materials/2019-2020-materials/2019-ct-bankruptcy-conference-materials/concurrent-1-a-supplemental-materials/bankruptcy-discharge-cheat-sheet.pdf

[islandgal808]

My Bankruptcy Attorney emailed me back and he will contact the IRS on Tuesday regarding this. I had my taxes done by H&R Block that year and forwarded the forms to him again. He said he will be getting back to me. Tuesday I will contact my HR department also.