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garnished taxes
i have an unpaid medical bill of 7000. i have less than three months to pay or they will take it out of my State Taxes. i obviously cant pay by december 1. so how badly will this affect me and for how long ? i have no choice but to try and pay as much as i can but i know i wont come close.

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If your state tax refund is over 7000 then you probably make enough to write them a check today.   I'm not sure what that threat was or it was an overzealous collector.  for them to assess your taxes, they have to take you to court.  The court has to rule in their favor.  The court can determine how they can secure their money.  They can file for a wage garnishment, even levy your bank account.    Make payment arrangements with the creditor that you can handle and start making your payments as agreed.   3 months to pay it all off is unreasonable.  As long as you are making payments, and don't miss a payment, no court will rule in their favor when you show your good faith at paying.  If it makes it to your credit report as a collection, it will remain their for a duration of 7 years from the date posted.

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Garnishments show up on your credit report through public records. Anytime you are taken to court and an order is issued for garnishing of your wages or tax refund, this record will be reported to the credit agencies. An entire section of your report is devoted to such public records and is accessible to any bank or lender from whom you are seeking financing. Even more, the report stays on your record for seven years and typically cannot be removed once it is reported.

Once a garnishment public record is on your report, you can expect your credit score to lower anywhere from six to 150 points. This score drop can impact you in several notable ways, including:

  • Showing up on a background check for a new job
  • Determining if you can get a new loan for a car or house
  • Determining what kind of interest rate you will pay on new financing
  • Appearing on a credit check if you apply for an apartment or rental housing.

This is a serious matter. A garnishment is a last resort to obtain payment. You should have taken care of this, and come to some type of financial repayment plan. Please read all you can on credit, on this site and everywhere else to educate yourself.

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