Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Can a collection agency garnish all of your tax refund without any notifications?

I took out some student loans a couple years ago for college and have since graduated. Shortly after I graduated, I moved, so I contacted my lender and updated my contact information. I received a couple bills with my new address, but then I defaulted in July and they never notified me. Then, I got married in December. When we filed our taxes (joint), we were supposed to get back $2,500. Today, we got a notice in the mail that my loans had been sent to a collection agency, who garnished ALL of our tax refund WITHOUT ANY NOTICE! My lender had my correct address on file, but they never even tried to contact me. Is this legal? Is there anything I can do about this? Because I don't understand how a collection agency can garnish ALL of my and DH's return without notifying us. I only worked a few months last year, so the money was mostly DH's. I just can't believe they do this with NO notification! HELP!!!

Answer Question

Asked by Anonymous at 2:11 AM on Feb. 18, 2009 in Money & Work

Answers (26)
  • Yes because student loans are backed by the government so they can do that.

    Answer by Anonymous at 2:30 AM on Feb. 18, 2009

  • yup on student loans they can.. not anything else

    Answer by miss_nevin at 2:31 AM on Feb. 18, 2009

  • I totally understand that they can garnish my tax refund... but surely there has to be a notice, right? I'm just in total shock that they did this with no warning. The collection agency lied and said they sent multiple letters to my parents because they couldn't find me- but my parents never got ANY notices saying my tax refund would be garnished. And how could they not find me to give me notice, but found me easily enough to take my return? I'm just so devastated over this and it just doesn't seem like it;s legal. If they had just let us know I had defaulted and they were going to garnish our tax refund, we would have paid it! It seems like they purposefully didn't send notices! Is there anything DH and I can do? THANK YOU for your help, ladies!

    Answer by Anonymous at 2:40 AM on Feb. 18, 2009

  • There needs to be no legal notice under these circumstances,sorry.
    Maybe next year you will get money back when you do not owe for debts.

    Answer by Anonymous at 2:43 AM on Feb. 18, 2009

  • didnt even know they sent notice i know what my babys dad filed his taxes they didnt give him a notice that they were taking it for backpay so i dont know how that works

    Answer by miss_nevin at 2:44 AM on Feb. 18, 2009

  • If you defaulted, then at some point they must have taken you to court and gotten a judgement against you. If they had you address (and they will look for you), then you would have received this court information at that time, and this indicates they have the right to take your money as garnishments. Once they have the judgement, they can get their money from your taxes without notifying you AGAIN right before they do it.

    Answer by Anonymous at 6:24 AM on Feb. 18, 2009

  • Student loans are the worst things to default on. They are backed by the government. They found you so easily with your tax return because of your SS #.

    Depending on your state when you married your debt became one. I recently had a medical bill under DH name and insurance from years ago. They refused to talk with me till right before they were going to sue me. We got it worked out but I learned that as married they can't discuss a bill with you but they can sue you for the money your spouse owes.

    Sorry maybe contact a CPA and see if you can refile as single. Maybe to late but a good CPA should be able to help you with your problem.

    Just get the student loan paid off ASAP because its the government and regular rules don't apply.

    Answer by Anonymous at 6:33 AM on Feb. 18, 2009

  • Student loans yes and they can and without giving notice. Sorry.

    Answer by Anonymous at 7:28 AM on Feb. 18, 2009

  • Look at for Injured Spouse form. You and your hubby may be able to file this and get part of it back.

    Answer by nanasworld at 7:30 AM on Feb. 18, 2009

  • This is all covered in your master promissory note - that was your notice that this could happen.

    Answer by lawmom623 at 7:54 AM on Feb. 18, 2009

Join CafeMom now to contribute your answer and become part of our community. It's free and takes just a minute.