Garnished Tax Refund and Joint Filing

[jimjimbk]

I have an old, unpaid $7500 student loan that is now at $18000. I had been off the radar of this particular lender for more than a decade. Two years ago, I found my tax refund had disappeared into the ether. More upset than me, was my wife. I actually had forgotten this loan even existed.

 

I understand that if I inform the IRS they took my wife's portion of the refund as well, they will refund it. Is this so? Is there a standard letter anyone knows of which I can send to the IRS?

 

Also, I need to make plans for the probability this will occur again this year.

 

Finally, my gratitude to the operators and member of creditboards. I hope I can contribute productively to the discussions here as I learn to stand on my own two feet.

[LynnInMN]

Now that your balance is getting up there it more than likely continue to occur. The IRS will also report your employer to the guarantor so you are more likely to be hearing from a CA shortly. My suggestion is to start paying or you will find your wages garnished.

[jimjimbk]

Thanks for your quick reply. My situation is colored by some additional wrinkles: We filed for BK on 7/12 and have not yet received our final discharge (supposed to come this week). So I have not been able to have a conversation with the lender for the past seven months. I gather you suggest I initiate a conversation with them and begin paying immediately? Can I send in any amount, or do they determine a minimum?

[genseeker]

In regards to the tax seizure, file an injured spouse form. You have to allocate income and expenses based upon who has the right to them. Your wife will need to sign the form and there is a space for her to indicate she is the injured spouse.

 

There are ways to weight the allotments to increase the portion for the injured spouse. For ex, say a couple includes a person who has kids not from that marriage. Those kids can be allocated only to the bio parent, along with any child related tax credits. This is completely legal. When I worked for one of the "tax companies" it was recommended all dependants and related exemptions be allocated to the injured spouse.

[TxQuiltGirl]

Thanks for your quick reply. My situation is colored by some additional wrinkles: We filed for BK on 7/12 and have not yet received our final discharge (supposed to come this week). So I have not been able to have a conversation with the lender for the past seven months. I gather you suggest I initiate a conversation with them and begin paying immediately? Can I send in any amount, or do they determine a minimum?

 

 

As soon as you receive your discharge, you need to contact the CA who's collecting on your loans. This is the one time I advocate using the telephone. Call them and tell them you want to enter a rehab program - search here and read everything you can about rehab. You have to specifically tell them that you want to rehabilitate the loan; they don't have to and usually won't offer that option. In addition, you may run up against some resistance - they may tell you that's not an option or that you will have to give them a down payment. That's why you need to read here and educate yourself about your rights.

 

Let us know if you need any help. Best of luck.

[cheeseburger]

When I first saw your post I thought I had posted it and forgotten about posting it, because my situation is very similar. I also had a 7000+ loan from the Department of Education, that has balooned into 18,000+ after 16 years. My pay was garnished for a few years but that didn't bring the balance down because it kept going toward the interest and not the principle. Plus, I had very little money left over after garnishment and my expenses, it was hard to live and I struggled. The garnishment stopped after 3 years due to some mistake on their part, and I then tried to save up my money and eventually get back to paying them on my accord. Now after a year they remembered me and want me to pay the 18,000+ in full, and I'm struggling with what to do and how to do it.

[RB73]

I was in a similar boat. We just filed the injured spouse form, but haven't gotten any money back yet. I also called about rehab.

 

When I called my guarenteer about the rehab, the first person I spoke to was either new or on commission, as he contradicted all I knew from this board about rehab. He wanted a down payment, he wanted the pay off amount to be far more than the standard 1%, and he kept insisting I was much better off to consolidate, which he wanted me to apply for right then with him over the phone. I told him I didn't have the info he needed on me and would need to call back.

 

When I did I got someone else, who confirmed all I knew from here, told me rehab was best in my situation and I should consolidate after it's done, and gave me a 1% payment amount. I filled out the papers and will start next month. The reason I say this is because sometimes it helps to get off the phone if the person you are speaking with is too pushy or if they are contradicting your research too much, and just call back later. When I sent in my paperwork I also sent a note with the second person's name letting whoever opened it know how helpful she was. I don't know if it'll do her any good, but maybe they'll tell her, or maybe they have some sort of helpful employee reward or something. In any case, I wanted kudos to go to the person who followed the rules and hopefully credit for getting me into rehab.

 

Good luck to you and I hope this info helps.

 

RB

[jimjimbk]

Thanks for responses thus far. I gather that it's possible to settle the account for a flat percentage if one can come up with a lump sum. (Not that I am in that situation, but I can dream, can't I?) What's the best rate one could theoretically settle for in cents-on-the-dollar?

[LynnInMN]

I also sent a note with the second person's name letting whoever opened it know how helpful she was. I don't know if it'll do her any good, but maybe they'll tell her, or maybe they have some sort of helpful employee reward or something. In any case, I wanted kudos to go to the person who followed the rules and hopefully credit for getting me into rehab.

 

Good luck to you and I hope this info helps.

 

RB

 

 

If you have a collector who has done a good or great job, sent a note to the guarantor! They will make sure that the collector is recognized. I got 10 thank you letters in a six month period, some thru the guarantor, some thru my agency! It got me a trip to Vegas and 4 days off with pay!!! It was another method our agency did to reward good work!