Legal Question in Credit and Debt Law in Pennsylvania
income tax refund for defaulted loan
I have a defaulted student loan. It was turned over to a collection agency. I was told that the government can take your tax refund to pay towards the debt.
I was told they can do this without my consent or taking me to court. How will I know if they are taking my tax refund this year?
1 Answer from Attorneys
Re: income tax refund for defaulted loan
You asked about a defaulted student loan.
The government guarantor will take your refund. Before a tax refund is issued the person is run against a number of lists and any identified debts cause the refund to be rerouted for a manual clearance. In most cases the manual clearance confirms that the refund should be withheld and the refund is forwarded to the appropriate authority.
A withheld refund will generate a notice to the taxpayer about the action and a direction to contact the appropriate authority.
Regards,
Roger
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