Wage garnishments and collections

John Clark6 said:grba, tax debts aren't collected through the court system or via standard garnishment laws. But you're totally right to ask generally about the type of debt involved, since it could be a three-year statute plus the year the ruling was issued.
Lauren, what is this debt for?

It’s a mix of things: sales tax, income tax from annual filings, and corporate tax—essentially everything stemming from before mid-December 2007 (though I'm not entirely sure which exact periods are covered yet).
I’m going to reach out to the Small Business Administration today with a formal request to have the debt forgiven.
On top of that, there are unpaid Social Security and Medicare contributions for a few months.

Up until now, nothing more than warning letters from the IRS have arrived. It seems like they just send a notice every two years or so.

So, yeah,

When it comes to sales tax and corporate income tax, people usually talk about a three-year window—and for social security contributions, they say five years—but honestly? Those are just relative statutes of limitations. It’s not quite that straightforward, I guess. If you were making partial payments, perhaps working out an installment plan with the IRS, or if you reached some kind of agreement to settle up, you might have actually interrupted that clock entirely. Once that happens, the absolute statute of limitations can jump up to six years for taxes and even ten years for those contributions. There is so much nuance involved here! It isn't just a simple matter of checking a calendar; you really need to sit down with the specific notices and assessments regarding those tax obligations and then carefully crunch the numbers to see if there is actually any legitimate ground for an appeal.

Back again with some legal headaches. I actually posted about this a little while ago. Basically, a friend of mine got hit with a garnishment notice from Coca-Cola about six months ago over some old business invoice he wasn't even responsible for—we're talking an eight-year-old bill. I helped him write up an appeal based on the statute of limitations, and he actually received confirmation from the court that Coca-Cola isn't allowed to touch his assets. He's not entirely sure of the specifics, but he assumed everything was settled... anyway, it's been six months since that appeal was filed. He doesn't have a steady paycheck or anything else in his name except for two cars. He's trying to sell one and transfer the title, but he's run into a huge wall because of this garnishment. It seems like the court hasn't even forwarded his appeal yet, where they were supposed to; so, the appeal is just sitting there at the courthouse... I guess what I'm wondering is, what can he do now? Is he really stuck being unable to sell his car just because the court is moving so slowly? I wonder if there's a faster way to handle this, since the local county court clearly isn't in any rush to deal with it. If Coca-Cola can't touch his property, how come he can't manage his own assets however he wants? Please help ASAP if anyone knows a solution...

John Clark6 said:When it comes to sales tax and corporate income tax, people usually talk about a three-year window—and for social security contributions, they say five years—but honestly? Those are just relative statutes of limitations. It’s not quite that straightforward, I guess. If you were making partial payments, perhaps working out an installment plan with the IRS, or if you reached some kind of agreement to settle up, you might have actually interrupted that clock entirely. Once that happens, the absolute statute of limitations can jump up to six years for taxes and even ten years for those contributions. There is so much nuance involved here! It isn't just a simple matter of checking a calendar; you really need to sit down with the specific notices and assessments regarding those tax obligations and then carefully crunch the numbers to see if there is actually any legitimate ground for an appeal.

I can tell you one thing for certain: nothing has been paid, and there was definitely no payment plan set up. This debt has been sitting there since December 15, 2007. All the IRS has done is send a reminder every two years in one of those standard white envelopes with a return receipt, and that's about it.
I guess my main question now is: should I just wait until they issue a formal levy notice? Wouldn't that document specify the exact dates the debts were incurred, which would give me the necessary evidence to file a request based on the statute of limitations??

steelheron47 said:I can tell you one thing for certain: nothing has been paid, and there was definitely no payment plan set up. This debt has been sitting there since December 15, 2007. All the IRS has done is send a reminder every two years in one of those standard white envelopes with a return receipt, and that's about it.
I guess my main question now is: should I just wait until they issue a formal levy notice? Wouldn't that document specify the exact dates the debts were incurred, which would give me the necessary evidence to file a request based on the statute of limitations??

Yes, you should receive a detailed ledger showing all the outstanding amounts. Best of luck! 🙂

John Clark6 said:Yes, you should receive a detailed ledger showing all the outstanding amounts. Best of luck! 🙂

Thanks, 🙂

Aaron Cooper said:I have a similar legal instrument right now to collect from an employer (the employer issued a Statement at the request of the Department of Labor).

The Federal Reserve is refusing to execute the collection against the employer, mostly because they interpret the accounting regulation differently than the Department of Labor does. I'm still sitting here waiting for someone to tell me if the Statement needs to be printed on pink paper or blue paper.🙂

I have a mountain of emails (and direct phone calls at the director and chief levels) regarding forced collections involving the Department of Labor (who wrote the regulation), the Department of the Treasury (specifically the director overseeing the Federal Reserve), and the Department of Justice (where I'm seeking a formal interpretation). Every single one of them understands my point, but nobody offers a solution. When I ask them to just coordinate and fix the discrepancy between themselves, they dodge it by claiming it would be an illegal interference in another department's business???

The Department of Labor refuses to demand a new Statement from the employer because they claim the current "Statement is sufficient for collection."

Do I even need to mention that the employer has connections to the highway department!!!
Yeah, several lawyers have reviewed everything and they say I'd win in court on the first try.

But I just don't get why I, despite having all the paperwork in order, can't collect from this employer through the Federal Reserve, yet anyone else—a worker, a retiree, or just some regular citizen—can get it done without this headache???

The link explains how to settle payments through the Federal Reserve. It’s straightforward information regarding the process.

True... under the new law, you can go straight to the Federal Reserve to garnish an employer's assets. I completely missed that part.

By the way, you can find information on how payroll is calculated online.
The Department of Labor just dropped some new guidelines regarding accounting regulations. It’s essentially a complete overhaul of how they want everything handled. Expect more oversight from the Department of Labor Inspection moving forward.

Envy, I think I know what the issue is. The Federal Reserve only recognizes... Certified pay stub. This is how it looks on the employer's end. Something like this (though it might not be identical).

[Link to payroll list image]

Another example:

[Link to image showing an American invoice list]

So you need to file a separate claim for every single unpaid paycheck. Signed by the company seal and signature. That makes it an enforceable instrument.
The catch is that hardly any employer actually follows the law on this.
I assume all you have is a piece of paper certified by the company stating they owe you a specific amount in unpaid wages, issued at the request of the Department of Labor Inspection. That isn't an enforceable instrument. I assume it could serve as valid evidence if you ever need to sue an employer for unpaid wages—though you'd probably be working with a lawyer by that point.
I’ve been there myself—employer refusing to hand over pay stubs (thank God that's over). A lawyer friend told me the best move was to get a signed statement on paper stating: "Wages have not been paid."
I don't know how much weight that carries since the Federal Reserve can easily verify if those salaries were actually paid out.

A quick coffee chat with a lawyer for a few bucks could have prevented all of this.

If I didn't hit the mark, then I honestly have no clue what the issue is. You should probably just call a lawyer.

And one last thing... an employer can actually face prison time if they fail to pay wages. You guys probably didn't bother looking into that option, did you?

Daniel Martinez9 said:The link explains how to settle payments through the Federal Reserve. It’s straightforward information regarding the process.

True... under the new law, you can go straight to the Federal Reserve to garnish an employer's assets. I completely missed that part.

By the way, you can find information on how payroll is calculated online.
The Department of Labor just dropped some new guidelines regarding accounting regulations. It’s essentially a complete overhaul of how they want everything handled. Expect more oversight from the Department of Labor Inspection moving forward.

Envy, I think I know what the issue is. The Federal Reserve only recognizes... Certified pay stub. This is how it looks on the employer's end. Something like this (though it might not be identical).

[Link to payroll list image]

Another example:

[Link to image showing an American invoice list]

So you need to file a separate claim for every single unpaid paycheck. Signed by the company seal and signature. That makes it an enforceable instrument.
The catch is that hardly any employer actually follows the law on this.
I assume all you have is a piece of paper certified by the company stating they owe you a specific amount in unpaid wages, issued at the request of the Department of Labor Inspection. That isn't an enforceable instrument. I assume it could serve as valid evidence if you ever need to sue an employer for unpaid wages—though you'd probably be working with a lawyer by that point.
I’ve been there myself—employer refusing to hand over pay stubs (thank God that's over). A lawyer friend told me the best move was to get a signed statement on paper stating: "Wages have not been paid."
I don't know how much weight that carries since the Federal Reserve can easily verify if those salaries were actually paid out.

A quick coffee chat with a lawyer for a few bucks could have prevented all of this.

If I didn't hit the mark, then I honestly have no clue what the issue is. You should probably just call a lawyer.

And one last thing... an employer can actually face prison time if they fail to pay wages. You guys probably didn't bother looking into that option, did you?

That only applies if there was actual criminal intent, which, in cases like this, is notoriously difficult—perhaps even impossible—to prove. We'll just have to wait and see how that plays out.👎

Daniel Martinez9 said:Abandon all hope... as they say...

(1) Under Section 204, Subsection 1 of this Law, if the debtor receives income or benefits under Section 172 or amounts exempt from garnishment under Section 173, the debtor is required to notify the Agency.

The law is written to put the debtor at a disadvantage... let’s be clear... you're supposed to open a protected account *before* the garnishment happens, notify the Federal Reserve about which income is exempt, and only then can you actually access it... if the funds accidentally land in a frozen account... well, kiss it goodbye.

To wrap this up... only brute force brings justice... hopefully it's clear where you stand in this situation....

It’s perfectly obvious to me that both the IRS and the bank saw clearly that these deposits were a SCHOLARSHIP—it literally says it next to every single transaction—but they went ahead and slapped the garnishment on them anyway. There was absolutely NO prior notice before my account was frozen; nothing arrived at my address, nothing at all. So, what's the plan here? We just don't bother notifying people about anything and instead just rob them blind?! Are they intentionally violating the law, acting like high-priced lawyers who count on the fact that an average person won't know their rights? And then they have the audacity to claim we can't get back what they stole from us?!

quick update — I’ve officially filed formal complaints both through my bank and via the legal firm handling the collection on behalf of Goldman Sachs, and they’re actually telling me a refund is possible. So now, I'm just sitting here playing the waiting game while the process unfolds.

Nicholas Cruz7 said:quick update — I’ve officially filed formal complaints both through my bank and via the legal firm handling the collection on behalf of Goldman Sachs, and they’re actually telling me a refund is possible. So now, I'm just sitting here playing the waiting game while the process unfolds.

Trust me, I’d love to be the optimist here and tell you, "Don't worry, you'll get your money back."
If they actually approve it, please post an update here so we all know (you never know)... though honestly, I think your odds of getting a refund are lower than your odds of hitting the Powerball.

Hey everyone, can someone walk me through how things work with Goldman Sachs when an employee gets laid off but the employer still owes them unpaid wages? I need to know what paperwork is required and what the actual order of operations is for collecting those claims—does a worker have any kind of legal leg up here? To make matters more complicated, the employer's bank account is totally frozen because they’re buried in debt, owing everything from federal taxes and payroll taxes to the U.S. Chamber of Commerce and who knows what else...
Thanks!

Quick question about VIP

So, a buddy of mine sold his small business back on March 17, 2011, and included a clause stating all debts would transfer to the new owner. Well, yesterday he gets hit with a collection notice from VIP for several unpaid bills dating from March 19, 2011, onwards.
He’s not saying he doesn't owe the money, but he thinks—and I'm inclined to agree—that they've got the wrong guy. Those charges popped up after the sale, so they should be hitting the new owner's doorstep, not his.
My advice to him was to fight the collection immediately to stop them from grabbing his cash, then deal with the proof later. If they drain his bank account now, I doubt he'll ever see a dime from the new owner.
Any tips or advice is welcome!

Daniel Martinez9 said:Trust me, I’d love to be the optimist here and tell you, "Don't worry, you'll get your money back."
If they actually approve it, please post an update here so we all know (you never know)... though honestly, I think your odds of getting a refund are lower than your odds of hitting the Powerball.

A coworker of mine actually got her money back for something she wasn't even supposed to withdraw (related to childcare stuff). She had to play hardball and bug them constantly over the phone, but hey, she got it back! 😉

Lawrence Reyes2 said:Quick question about VIP

So, a buddy of mine sold his small business back on March 17, 2011, and included a clause stating all debts would transfer to the new owner. Well, yesterday he gets hit with a collection notice from VIP for several unpaid bills dating from March 19, 2011, onwards.
He’s not saying he doesn't owe the money, but he thinks—and I'm inclined to agree—that they've got the wrong guy. Those charges popped up after the sale, so they should be hitting the new owner's doorstep, not his.
My advice to him was to fight the collection immediately to stop them from grabbing his cash, then deal with the proof later. If they drain his bank account now, I doubt he'll ever see a dime from the new owner.
Any tips or advice is welcome!

Your friend probably had a contract directly with VIP for his business, right?
Did he actually cancel that contract when he sold the place? It seems like a no-brainer to shut it down since he wasn't using the service anymore, and the new owner should have signed their own separate deal with VIP.
If that original contract is still sitting there under your friend's name, then it makes sense why VIP is trying to squeeze him for the cash.
And honestly, did VIP even know the service switched hands?

Lawrence Reyes2 said:Quick question about VIP

So, a buddy of mine sold his small business back on March 17, 2011, and included a clause stating all debts would transfer to the new owner. Well, yesterday he gets hit with a collection notice from VIP for several unpaid bills dating from March 19, 2011, onwards.
He’s not saying he doesn't owe the money, but he thinks—and I'm inclined to agree—that they've got the wrong guy. Those charges popped up after the sale, so they should be hitting the new owner's doorstep, not his.
My advice to him was to fight the collection immediately to stop them from grabbing his cash, then deal with the proof later. If they drain his bank account now, I doubt he'll ever see a dime from the new owner.
Any tips or advice is welcome!

Honestly, your friend is being a bit of a fool if he didn't take that contract straight to Verizon to officially switch the account holder's name. It doesn't matter what that private agreement says—it’s basically meaningless to them—because the legal obligation lies with whoever is listed on the service contract. How is Verizon supposed to know about some private handshake deal between two people? The only thing he can really do is sue for reimbursement later to try and get back whatever Verizon ends up stripping from him. As it stands, there aren't really any grounds for a formal appeal.

Thanks for all the input!
Once I catch up with him, I’ll get the full scoop. But if I'm reading him right, the contract wasn't even in his personal name—it was under his LLC. Since he sold the business and stepped down, he probably figured that closed the loop. Honestly... I’d be just as tripped up if I were in his shoes.

But, wouldn't it make sense (speaking as a total amateur here) to file an appeal? Like, show them the paperwork proving he wasn't the owner anymore, so VIP could just redirect the collection to the new owner instead?

And what exactly is there to complain about?
If your buddy didn't bother telling Verizon that the business changed hands, how on earth was Verizon supposed to know?
There’s zero ground to stand on here. No basis for a grievance at all.
Look, your friend should just settle the bill and then cancel the contract with Verizon—following the actual rules and the fine print he signed off on, obviously—and let the new owner handle their own service contracts under their own name.

Probably happened somewhere, but who has the energy to dig through endless pages.

Can someone please tell me when the statute of limitations on an execution of judgment kicks in?

The debt is established, collections start, court, seizure... eventually, it hits absolute expiration.

thx

Thanks so much!!
Since there’s no real way to fight it now, things are actually looking up. I’m stuck between paying the bill outright or just letting them freeze my checking account and take it from there. I really don't want to end up in that nightmare scenario where you pay everything off, but they freeze your account anyway and pull the money a second time! That happened to two of my coworkers—they eventually got their money back, but man, it was such a huge headache...