Tax Refund Garnishment

[rantinraven]

Hey Everyone,
I know a lot of people are waiting on income tax refunds, so I thought I would post this here. Your tax refund can be garnished for non tax debts that you may owe. I had no idea this could happen until Friday. Dh and I are sitting here waiting for our refund and I notice a little message on the IRS website that said my tax refund could be taken due to offset. I had absolutely no idea what an offset was and I had to dig for about 3 hours before I figured it out. I had received no notice I wasn't aware that I owed any debts so I set out to figure out was going on. I wrote an article about it at

http://www.ehow.com/how_4800877_keep-tax-refund-safe-garnishment.html

that you can check out. The long and short of it is if you owe, back school loans, child support, back state or federal tax, behind on USDA loan payments or anything of the sort you could have your tax refund garnished. In my case I went to school online and my scholarships were to pay for my tuition. Here 5 years latter I find that the school squandered my money and didn't use it for its intended purpose, instead taking Stafford loans out on me as well. 3 months of school at an original tuition price of 2,249.00 is now costing me 7,619.00. I received 8,000.00 in scholarships so its anyone's guess where that went. The school has filed for bankruptcy so there's no way for me to dispute that. I spent most of Friday bawling like the world had come to an end cause $3,648.00 of our money was gone in a flash and I thought there was nothing I could do. I was wrong, after my pity party I began to dig until I found answer's. Those I wish to share with you here. If you are (or think you may soon be) the victim of a tax refund garnishment there's something you can do. First you can call the U.S. Department of the Treasury Financial Management Services. The hot line will allow you to check you and your spouses SSN# to determine if you have a debt. (800) 304- 3107. If you do have a debt you can file a tax form 8379, this is a Injured Spouse Allocation form. From what I understand (as long as you don't live in a community property state) the FMS cannot take your spouses EIC or Child Tax Credit for your debt. This form will slow down the refund a bit but it will keep companies from collecting on an unfair debt. ALSO if you have had a garnishment of anything, federal refund, state refund, or stimulus check in the last 6 years you can file this form and recover a portion if not all of that refund. Don't get me wrong I don't have a problem paying what I owe, but I figure this crack pot school got $8,000.00 from me for 3 months of nothing and I refuse to let them have another dime if I can stop it. I hope this information can help someone here. I don't know that too many people are aware that this can happen, and I want you to have a chance to recover from a blow like this. Raven

[momma_to_seven_chi]

It's always been that way. The government can seize your rebate for any government entity debt and for child support. They can't seize it for private debts to creditors. I think the whole child support seizure idea came up because so many kids are being supported by the state when their parents get behind on child support. Student loans are guaranteed by the state, so they are subject to seizure too.

[rivahmom]

Hey Everyone,
In my case I went to school online and my scholarships were to pay for my tuition. Here 5 years latter I find that the school squandered my money and didn't use it for its intended purpose, instead taking Stafford loans out on me as well. 3 months of school at an original tuition price of 2,249.00 is now costing me 7,619.00. I received 8,000.00 in scholarships so its anyone's guess where that went. The school has filed for bankruptcy so there's no way for me to dispute that. I spent most of
I would call the bank your loan is through and ask to see the signed paperwork of your Student Loan because unless you signed the letter accepting the funds, it is invalid. If you filed for financial aid to get a pell grant then you may have signed it electronically to take out a loan for remaining funds. If you can prove that the bank does not have the authority to loan you money, you may be able to receive your refund.

[Michael32170]

Obama is hurting himself by his instructdion to change everyone's dedutions. More people will owe money at the end of the year, and they will be doing less of that.

Then, he will see tax relief is needed for the people who "can't" pay their taxes.

[MissouriFree]

Why can't I claim my share of the bill for spendulus as a charitable donation on my return .. After all it is going to help those who refuse to help themselves.. ain't I charitable guy ?

[MYellowRose]

Raven dig a little deeper and see if you can find out who the bankruptcy judge is for the school. Send him/her a letter by registered mail, return receipt requested, and I'd even opt for delivery confirmation, and see if you can get yourself added to the list of debtors the school has. Don't know if it will work or not but if you've got any proof of receiving the $8000 in scholarships that was more than enough to cover the cost of your schooling I'd send the judge a photocopy.
Also find out who holds those loans and get them to send you a copy of the signature page. If it was done online without your permission or if someone signed your name without your knowledge or permission it's called forgery and you shouldn't be liable for the loans. Also be sure you contact the three major credit bureaus and let them know you are contesting these loans. You need to send them a letter and request it be added to your file. You might want to check first and see whether or not the loans are in your file, if they're not there's another point in your favor that they aren't legitimate loans. Good luck, though I think it will be a long haul in trying to straighten it out.

[Anon001]

If I read correctly, she stated that they were scholarships, not loans.... However, if the scholarships were paid, there would be a record of it from the foundation or organization that awarded the scholarship. *And they would have the proof that the scholarship was paid to the school.... *You should be able to have this reversed.

Otherwise, just as it was stated, you need to contact the court. *You can very easily find which judge and/or trustee is in charge of the bankruptcy. But the bankruptcy should not stop you from contesting this bill. *I sure wouldn't give up this easily. *

.... and as already has been stated, this is nothing new. It has been done for at least 30 years that I know of.

[CarolAnn]

It can be an unpleasant surprise - after my divorce, my deadbeat ex not only didn't pay the huge support payments ($25 a week!) he defaulted on his own student loan. Because he was slippery as well as a deadbeat, they found it was easier to take MY paltry income tax refund to pay his debt.

I just hope that turkey is never standing behind my car when I'm in it or I might accidentally back over him three or four times.

[rantinraven]

CarolAnn, I agree with you! I have proof that I got the scholarships and that they were sent to the school. I even have proof that the school per their policy sent me all of my Pell Grants because I owed a 0.00 balance on the books. The Pell was applied for before I got the second scholarship. Don't get me wrong I am not letting it go easily, I am only doing what I can to make sure they don't get a dime more from me. Getting it cleared from the credit and the rest could take months to clear, so I am just taking the fastest route in this. I talked to another former student and they said that they believe the forms we filled out along with the FAFSA agreed to let the school apply for loans on our behalf should the need arise for them, in my case that need never did arise. I figure that the ship was going down and they figured they would do whatever they could. Funny thing is the collection agency now holding the note is trying to offer me more loans, to take care of these loans, and sweet talk me back into another school.... I wont be stupid enough to fall for that again but it seems strange, that upon first talking to them my credit was completely ruined, and now 3 days latter they offer me a better loan with a better rate? Anyways I am still hot on the trail to figuring this all out thanks for the tips here, and I hope this experience at least helps someone.

[EarthMama]

It's always been that way. *The government can seize your rebate for any government entity debt and for child support. They can't seize it for private debts to creditors. I think the whole child support seizure idea came up because so many kids are being supported by the state when their parents get behind on child support. Student loans are guaranteed by the state, so they are subject to seizure too.


Yep!

That's why it pays to be careful as to who you become beholden to. Borrow from the government and the government is going to want their money back, sooner or later. Likewise with money owed the government.

Course, why not? Anybody or any institution that borrows money to someone, is going to want that money back eventually.

Like the ole saying goes... if you have a dollar in your hand and you owe somebody else a dollar, that dollar in your hand really isn't yours. How true.

[EarthMama]

Just as an added little tidbit, in case some of you didn't know... student loans supplied by the government are not excused in a bankruptcy. You can file bankruptcy on everything else in your life but the government-issued student loan will not be dissolved. You'll still have to pay that back.