No clue what to do here. IRS Garnishment for the last 17 years...

[DPDIY]

Hi all..

 

Around 1991 I got 2 student loans for a total of about 4 grand. I paid some then defaulted. Some time later they started garnishing my tax refunds. Probably starting abound 1995. These returns were in the area of $1200-$1900 each time.

There have been maybe 5 or 6 years that there was no refund due to taxes owed, but there has been more times than not that those bastards took all of my money. I called the IRS adn they can only go back 3 years. They have no idea how much they will continue to offset because they don't get an amount, just the notice to send left over money until they are told to stop.

 

 

I want to contact these people who the money is going to but I am afraid that they will then raid my bank account too and start collection activity through calls, etc. I have had no contact with these people other than when they steal my money every year there is a refund.

 

 

Does anybody have any idea how I can get a correct accounting on what they say I owe? I'm sure if they are a collection agency by now they will say that I owe millions. I have no idea on how to get this to stop. We filed injured spouse ( I do not work and it is my debt, not his) this year but we owed some money to the IRS so the IRS took their money then sent the other $900 to those jerks! The injured spouse form only covered the money we owed the IRS. Since I live in a community property state I guess they get half of the refund? There has got to be a way to stop these scumbags.

 

Anybody have any ideas?

 

Thanks

Edited May 14, 2012 by DPDIY

[luckydriver]

i am sorry i cannot help with your question but i am curious about something since you literally lived through this. for the years you got tax refunds, was there any way that you could have adjusted withholding so you could have kept that money? i only ask because i see people on divorce boards and other things on this forum and people say they lose their tax refunds..and i wonder if they just could have avoided any refund and thus solved the problem..just a curiousity, not a criticism. i'm very inquisitive

[DPDIY]

i am sorry i cannot help with your question but i am curious about something since you literally lived through this. for the years you got tax refunds, was there any way that you could have adjusted withholding so you could have kept that money? i only ask because i see people on divorce boards and other things on this forum and people say they lose their tax refunds..and i wonder if they just could have avoided any refund and thus solved the problem..just a curiousity, not a criticism. i'm very inquisitive

 

 

Every year I thought would be the last. Even if I did do that Im sure whatever imaginary debt they are collecting would continue to accrue a balnce of sorts.

 

 

I am screwed unless somebody has any ideas...

[snowpuppy]

Have you ever gone out to the National Student Loan Database (NSLDS), logged in and looked at how much money you owed? You go out to the FAFSA website, get a PIN number and log in to NSLDS. SL's in the late 80's and early 90's carried hefty interest rates, some 11-13%.

 

You say you 'think' it's with a CA but really don't know? And you're letting them take your cash, year after year? Do these collection agencies, Dept of Ed, etc ever send you a 'balance due and owing' after they snag your return? Did you not ask the IRS who placed the offset? They have that info.

 

I have no first hand experience in offset but once your return is sent to whomever has the offset, you are to receive a statement from them letting you know the balance due.

 

I'm not sure how you are 'paying' anything if your DH is filing an 'injured spouse' and you have 0 income.

[alexplantman]

Just contact them and pay it.. set up a payment plan to knock it off.. I mean, you did get the loan...

[DPDIY]

Just contact them and pay it.. set up a payment plan to knock it off.. I mean, you did get the loan...

 

 

Alex, please read the part where I put that they have taken thousands of dollars over the years from us. This $4000 loan has been paid off many times over.

[thecollector]

I have the answer to the original question.

 

The dept of education is actually the ones taking your tax returns. It is called a tax offset. Here's the thing about tax offset , it is considered a involentary collection activity by the dept of ed. They charge you every time they have to take money from you ( crazy right !) So tax offsets will never pay off your loans. Many of you do not know this but at the 270th day of not paying on your student loan with your lender , you go into federal govt defaut. Your loan then gets contracted with 17 collection agencies contracted by the dept of ed ( yes they do work for the govt ) to try to get you into a voluntary repayment program.

 

 

Now the answer to your question. You cannot stop tax offsets unless you get your loan out of default with Ed. And the only way to do that is to get into a voluntary

repayment program. The collection agencies will generally give you 3 to 4 options ( depending on your balance size ). First is to pay the balance in full , second is a settlement ( generally 3 options they give you for settlement in full ) , or what most of you will get offered is a loan rehabilitation program. its a payment option that you and the collection agency contracted by the govt work out and after 9-12 consecutive on time payments a new private lender will pick back up your loan and you then negotiate new terms with the new private lender. A Full loan rehab will give you up to 9 years after you get out of default to repay the remaining balance after your rehab ( all rehab payments to the dept of ed go towards your balance ) , and their is a option called the balance sensitive rehab for loans with 8000 + dollars left on the loan after rehab payments. The BSR ( balance sensitive reab ) will give you between 25-30 years to repay on the loan but here's the catch , you get consolodated with this option. And here's the REAL bummer with the BSR : If you go into default after you complete a BSR and you get picked back up with the new lender ( redefault ) the

new lender will turn right around and charge your balance 25-30 years worth of intrest and then the dept of ed turns around and adds on 25 % of the balance of collection fees! For example , lets say you go through a BSR and you redefault and your loan size is 50k , you get tacked on 25 years worth of intrest up front making your new balance 100k , then the dept of ed charges you 25% collection fees making your new redefaulted loan 125K !!!!! And folks , the loan is not bankruptable and will follow you for the rest of your life. So seriously think about your options...

 

 

But my friend thats the only way to get your taxes from getting taken. Get out of default because even though the Dept of Ed is taking your money your not out of default untill you get into a voluntary arrangemnet.

 

By the way I work for the govt collecting on defaulted student loans and my training from the Dept of Ed is where I get all my info :-)

[DPDIY]

I have the answer to the original question.

 

The dept of education is actually the ones taking your tax returns. It is called a tax offset. Here's the thing about tax offset , it is considered a involentary collection activity by the dept of ed. They charge you every time they have to take money from you ( crazy right !) So tax offsets will never pay off your loans. Many of you do not know this but at the 270th day of not paying on your student loan with your lender , you go into federal govt defaut. Your loan then gets contracted with 17 collection agencies contracted by the dept of ed ( yes they do work for the govt ) to try to get you into a voluntary repayment program.

 

 

Now the answer to your question. You cannot stop tax offsets unless you get your loan out of default with Ed. And the only way to do that is to get into a voluntary

repayment program. The collection agencies will generally give you 3 to 4 options ( depending on your balance size ). First is to pay the balance in full , second is a settlement ( generally 3 options they give you for settlement in full ) , or what most of you will get offered is a loan rehabilitation program. its a payment option that you and the collection agency contracted by the govt work out and after 9-12 consecutive on time payments a new private lender will pick back up your loan and you then negotiate new terms with the new private lender. A Full loan rehab will give you up to 9 years after you get out of default to repay the remaining balance after your rehab ( all rehab payments to the dept of ed go towards your balance ) , and their is a option called the balance sensitive rehab for loans with 8000 + dollars left on the loan after rehab payments. The BSR ( balance sensitive reab ) will give you between 25-30 years to repay on the loan but here's the catch , you get consolodated with this option. And here's the REAL bummer with the BSR : If you go into default after you complete a BSR and you get picked back up with the new lender ( redefault ) the

new lender will turn right around and charge your balance 25-30 years worth of intrest and then the dept of ed turns around and adds on 25 % of the balance of collection fees! For example , lets say you go through a BSR and you redefault and your loan size is 50k , you get tacked on 25 years worth of intrest up front making your new balance 100k , then the dept of ed charges you 25% collection fees making your new redefaulted loan 125K !!!!! And folks , the loan is not bankruptable and will follow you for the rest of your life. So seriously think about your options...

 

 

But my friend thats the only way to get your taxes from getting taken. Get out of default because even though the Dept of Ed is taking your money your not out of default untill you get into a voluntary arrangemnet.

 

By the way I work for the govt collecting on defaulted student loans and my training from the Dept of Ed is where I get all my info :-)

 

Wow.

 

That explains ALOT. Thanks for taking the time to answer this, I'm sure you have helped many others with this post too.

[LynnInMN]

A Full loan rehab will give you up to 9 years after you get out of default to repay the remaining balance after your rehab ( all rehab payments to the dept of ed go towards your balance ) , and their is a option called the balance sensitive rehab for loans with 8000 + dollars left on the loan after rehab payments. The BSR ( balance sensitive reab ) will give you between 25-30 years to repay on the loan but here's the catch , you get consolodated with this option. And here's the REAL bummer with the BSR : If you go into default after you complete a BSR and you get picked back up with the new lender ( redefault ) the new lender will turn right around and charge your balance 25-30 years worth of intrest

 

Total crock of BS. If you redefault, you are charged collection fees of up to 24% but they to not just add on interest until it has accrued.

and then the dept of ed turns around and adds on 25 % of the balance of collection fees! For example , lets say you go through a BSR and you redefault and your loan size is 50k , you get tacked on 25 years worth of intrest up front making your new balance 100k , then the dept of ed charges you 25% collection fees making your new redefaulted loan 125K !!!!! And folks , the loan is not bankruptable and will follow you for the rest of your life. So seriously think about your options...

 

More total BS. Someone needs to go back to collector training. Balance sensitive rehab is simply utilizing "reasonable and affordable" payments under the Higher Education Act. Both regular and income sensitive rehabs must go ICR/IBR and both can extend payment plans to 25 years. Interest accrues over time and cannot be just tacked on.