Can we get our tax refund back if the USDA loan was under bankruptcy when it got offset?

Asked over 2 years ago - Ardmore, AL

My husband and I get our tax refund offset to satisfy a loan with USDA every year. This December 2011, we filed bankrupt and had our taxes done in January of 2012, not knowing that we would have to let the US Treasury know not to offset due to bankruptcy, our refund got offset. I wanna know if we can get this money back because it wasn't supposed to get offset in the first place and how do we go about doing so. I have just got the run around for about two weeks until today, the US Treasury said they entered the bankruptcy in their system and closed out our account and turned it over to the USDA.

Attorney answers (2)

  1. Robert West

    Contributor Level 20


    Lawyers agree

    Answered . You should discuss with your bankruptcy lawyer.

  2. Alan D. Walton


    Contributor Level 19

    Answered . The taking of funds to cover a listed debt after the bankruptcy is filed is a violation of the automatic stay. The procedures vary by district on how to enforce it, but a motion for contempt or an adversary proceeding should be commenced seeking damages as allowed by 11 USC 362(k).

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