Filing a bankruptcy will stop the garnishment, but it will not get back the money garnished prior to the filing of the case. If a lawsuit has been filed against you, talk with a bankruptcy attorney before the garnishment takes effect.
Owing taxes to the Internal Revenue Service (IRS) or the Kansas Department of Revenue can result in aggressive collection measures, including tax liens on your real estate and personal property; levy of wages, bank accounts, Social Security benefits, and retirement income; and offset of future tax refunds. Bankruptcy will put these collection measures on hold and may even discharge your obligation to pay the tax debt altogether.
The American Bankruptcy Institute reports that 6,327 bankruptcy cases were filed in Kansas in 2018. Of these cases, 54% were filed under Chapter 7 and 45% were filed under Chapter 13. This means bankruptcy filings were up 3% in 2018 over 2017 filings. With a total population of 2,818,747 (2009 U.S. Census Bureau), Kansas saw 2.45 filings per 1,000 people.
Our bankruptcy attorneys understand that bankruptcy is an option of last resort. Before contacting a bankruptcy attorney for advice, many of our clients seek help from a debt settlement company. They expect that the company will negotiate favorable payments terms with their creditors or even get the debt balances reduced. While there are some reputable companies that offer debt settlement services, there are also many companies that charge a high fee and do little to help.
As a general rule, student loans are excepted from a bankruptcy discharge, meaning a borrower remains obligated to pay the student loans after successful completion of a bankruptcy. However, as with any rule, there are exceptions. Student loans can be discharged in bankruptcy if the bankruptcy debtor can prove that the student loan obligation imposes an undue hardship on the debtor and the debtor’s dependents.