IfI owe a studen loan debt and wage assignment has been issued, can my federal tax refund be taken?

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IfI owe a studen loan debt and wage assignment has been issued, can my federal tax refund be taken?

Asked on January 9, 2011 under Bankruptcy Law, Illinois

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Yes, it can.  The government has a great deal of discretion to use against borrowers who have defaulted on their student loan payments.  And when it comes to tax refunds, it can seize your refund directly; it does not have to wait until you deposit it into your bank account.  The IRS can intercept any income tax refund you may be entitled to until your student loans are paid in full.  In fact, this is one of the most popular methods of collecting on defaulted loans.

However, you can challenge a tax refund offset.  To learn more about acceptable reasons to challenge offsets, go to the the National Consumer Law Center's Student Loan Borrower Assistance website at www.studentloanborrowerassistance.org.


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