Garnishments are stopped immediately by both Chapter 7 and Chapter 13.
Chapter 7 will not discharge the underlying student loan debt, some tax debt and tax liens causing the garnishment.
- Garnishments from judgments from consumer debt are not legal in South Carolina with the following exceptions:
- You work in another state or
- You were living in another state when the judgment was acquired or moved here during the lawsuit
If the garnishment is from tax debt assessed within the last three years or a tax lien, the garnishment may resume after Chapter 7.
- A tax lien may be valued and paid in Chapter 13 plan to stop the garnishment.
- The lien will survive on the property that you own prior to the bankruptcy.
Tax debt can be eliminated if:
It was “assessed” by the IRS more than 3 years ago and no lien has been filed.
- It was “assessed” by the IRS more than 3 years ago and no lien has been filed.
- If the tax debt was “assessed” less than 3 years ago, it must be paid in full in Chapter 13.
- This category is call “priority”.
If the tax debt was “assessed” less than 3 years ago, it must be paid in full in Chapter 13.
Both the IRS and the SC Department of Revenue can garnish wages and seize tax refunds.
Tax liens can be valued in Chapter 13.