Are You Missing Your Tax Refund?

by DeLadurantey Law Office, LLC on June 18, 2014

TaxesAIf you thought you were supposed to receive a tax refund from the IRS and you haven’t seen it, it may be because you have defaulted on your federal student loan. Once federal loans are at least 270 days past due, most are considered to be in default. Once your student loan is in default, the government will begin making efforts to collect its money, including seizing your tax refunds.

The U.S. Department of the Treasury can seize federal money that is owed to you in order to pay any delinquent debts owed to other federal agencies, including the U.S. Department of Education. If you are facing this situation, below are a few things you need to know:

  • If your tax refund is going to be seized, you will be given notice before the offset occurs. The notice is usually sent at the end of summer so you have time to resolve the defaulted loan before the account is offset. Your notice will be sent to the address the lender has on file, so it is important to update your contact information with your lender if it changes.
  • The entire amount of your tax refund can be seized. Unless your tax refund pays the remainder of your student loan balance in full, you are still subject to further offsets, including from your paycheck.
  • In order to stop the seizure of your tax refund, you must contact your student loan lender and set up a repayment arrangement. You must make the first payment under the new payment agreement before the deadline set forth in the notice of the seizure.
  • You should also be aware that many states have laws that authorize their state guaranty agencies to seize state income tax refunds as well.
  • You have the ability to challenge a government offset by requesting a hearing to appeal to the U.S. Department of Education.

It is important to keep your student loan out of default in order to avoid the government seizing your tax refund, wages or other sources of money. If you have questions about how to keep your student loan out of default, call the attorneys at DeLadurantey Law Office today.

The “defender of the little guy,” DeLadurantey Law Office, LLC. handles student loan debt and bankruptcy matters (Chapter 7 and Chapter 13) in Milwaukee, South Milwaukee, West Milwaukee, and Milwaukee County, including the municipalities of Bayside, Brown Deer, Cudahy, Fox Point, Franklin, Glendale, Greendale, Greenfield, Hales Corners, Oak Creek, River Hills, Shorewood, St. Francis, Wauwatosa, West Allis, and Whitefish Bay. The firm also can handle your debt negotiations, debt relief, and mortgage loan modifications.   Contact DeLadurantey Law Office, LLC by phone: (414) 377-0518. Like us on Facebook.

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