CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Bankruptcy and Your Tax Return

How Does Bankruptcy Affect Tax Return.How Bankruptcy Can Affect a Tax Return

Receiving an income tax return can feel great and help you get caught up on debts you’ve fallen behind on. Despite having the option of “breaking even” and not paying as much in payroll taxes throughout the year, some people enjoy receiving a refund check.

Unfortunately, the joy of anticipating a refund can turn to horror quickly if a debt collector attaches your refund and you get less than what you anticipated. Tax refunds can be garnished by private creditors, the IRS, and other government entities.

What do you need to know about the attachment of your tax refund?

IRS Gets First Dibs

The IRS issues your tax refund and it’s easy for them to keep hold of it or alter it if you owe them money. Any time you have unpaid federal taxes due, your current refund will be put toward that balance. The good news is this rarely comes as a surprise when filing your return.

Other Government Entities

The next in line to attach your tax refund is the Treasury Offset Program. This is the government program that collects outstanding balances owed to state and federal governments, as well as courts, regulatory agencies, and other government entities. This includes any money you owe in past-due child support, delinquent or defaulted student loans, fines, and penalties.

Additionally, if you’ve received an overpayment of any benefits the balance will be taken from your tax refund. For instance, if you were overpaid unemployment, Social Security, or SNAP benefits, your return can be attached.

Again, this should come as no surprise if it affects your tax refund. Debtors must be notified and provided with due process before their tax refund can be attached.

To learn more about the Treasury Offset Program, check out this information from the US Department of Treasury.

Both federal and state governments have the ability to attach your refund. This means if you have unpaid state taxes, property taxes, or fines, your state’s government can take what they are owed out of your tax refund.

Bright Side of a Garnished Tax Refund

Though it might not seem like it when you’re expecting a sizable chunk of change from the IRS, having your refund attached or garnished can be a good thing. For many people, their annual refund is a few thousand dollars, which can put a significant dent in a debt you owe. Even if the refund isn’t enough to pay it off, it can keep it under control and make it possible to pay it off in the near future.

There’s little you can do to prevent an attachment of your refund, but dealing with the situation can serve as a wakeup call. If you’ve been putting off facing your debt, now is a great time to find out what you can do to improve your situation.

Maybe you were anticipating a refund check and had planned to put it toward credit card debt. Maybe you wanted to use it to catch up on past-due mortgage payments or deal with an expense that was unexpected. Finding out you aren’t receiving what you thought you were owed can feel like a kick in the stomach, but maybe it’s just what you need to pursue an avenue that is truly going to help you with your debt.

If you’d like to know more about the actions debt collectors can take to get payment from you or you want to know what you can do to improve your financial situation, we can help. Contact the Law Office of Robert M. Geller at (813) 254-5696 to schedule a free consultation to discuss your situation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Can Leading a Frugal Lifestyle Prevent a Second Bankruptcy?

Changing your approach to spending is a necessity after bankruptcy. You’ll turn over some control of your finances to the...
Read More

Are Medical Issues Forcing You Into Bankruptcy?

Many Americans wind up in debt because of medical bills. One of the most common reasons for filing bankruptcy in...
Read More

Law Offices of Robert M. Geller, P.A. Congratulates Danielle Austin For Receiving the Patriot Award from the United States Department of Defense

Award Recognizes Support of Guard and Reserve Members Who Work for the Organization Tampa, Florida, June 29, 2021 – The...
Read More

Is Your 401k or Other Retirement Savings at Risk in Bankruptcy’s Liquidation of Assets?

If you’ve spent years saving for retirement, putting that money at risk when you file for bankruptcy is likely one...
Read More

Tips to Help You Protect Your Assets When You File for Bankruptcy

One of the most intimidating aspects of filing for bankruptcy is protecting your assets. Worrying about whether bankruptcy puts their...
Read More

How Does Bankruptcy Affect Vehicle Ownership? What Assets Can You Keep through the Bankruptcy Process and Does It Affect Your Car?

Many people struggling financially avoid filing for bankruptcy because of concerns about losing important assets like their vehicles. The good...
Read More

Is There a Legal Way to Hide Assets When You File for Bankruptcy?

Filing for bankruptcy can be an overwhelming experience. The relief you receive when you file helps you feel better about...
Read More

Do Bankruptcy Trustees Take Your Savings? What is Considered an Asset in Bankruptcy and How Does It Affect the Money You’ve Saved?

Bankruptcy trustees gain access to a variety of your assets when you file. But what is considered an asset in...
Read More

Can Filing for Bankruptcy Help You Protect Your House?

fiHow filing for bankruptcy affects your home is one of the greatest concerns people have when they consult with bankruptcy...
Read More

Should I Refinance a Student Loan I Can’t Discharge in Bankruptcy?

Student loan debt is overwhelming many people. Could refinancing be the answer to help you avoid bankruptcy if your student...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo RG Seal

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions