they said i they will report the principal bal. 6,348 and will not try to collect. I work a half a year about 3,500. i am on unemplyment , no job few hunred $$$ no home live with people. i know i need to do a CH7.Can they take my fed taxes i was hoping to get 600.00 to put on doing a BK.
The creditor cannot take your federal tax refund, but you may have to file form 982 showing that you were insolvent at the time the debt was forgiven if you want to avoid paying taxes on the forgiven debt amount.
Debt Collection Attorney
Creditors can't typically take your tax refund. But the situation you're describing sounds like a third-party debt collector maybe misinforming you about their "right" to collect/report an alleged debt. If this is the case you should discuss with a NJ consumer law/debt-defense attorney to discuss your options, as there could be violations of federal law which would entitle you to economic damages plus attorneys fees. Good luck.
File for BK before you get tax refund and exempt the tax refund out with your exemptions.
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Chapter 7 Bankruptcy Attorney
Creditors can generally not take a tax refund (except the IRS and federal student loan lenders). The lender is threatening to file a 1099C, which could decrease your refund due to an increased tax liability for forgiven debt.
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