If Iowe restitution for a plea agreementbut was awarded a $50,000 divorce settlement, can state of take it?

I owe $75,000 in restitution for a plea agreement; I was awarded $50,000 in divorce settlement. I had gotten behind because of unemployment so the state of IN took my tax return. I received a garnishment letter from INand an exemption letter. My ex was a postal worker and I thought I was exempt from the garnishment because it is from my ex’s federal retirement plan. I was planning to roll it over. I have the check by accident and the retirment plan is saying that I cannot cash it because they sent it in error and if I cash it they will start the garnishment process.

Asked on November 30, 2010 under Bankruptcy Law, Missouri


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I think that you should speak with an attorney in your area as soon as you can and do not cash the check in the meantime.  I really think that you already have your answer from the retirement plan but check anyway.  And I believe that the exemption from garnishment would be for HIM not for you but double check.  Funds that become available to pay back restitution can be taken by governmental agencies and that includes tax refunds, etc.  The exemption letter is curious though.  For what did you obtain an exemption?  Or did you just receive a letter with the garnishment letter telling you what funds were exempt?  Are you still on unemployment?  Can you make an application to reduce the amount given your financial circumstances?  Seek legal help.  Good luck. 

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