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If I came out of bankruptcy and without notification can they continue taking my income tax for student loan offset?

Milford, OH |

My bankruptcy was discharged in Aug. 2010. I read that they have to notify you in writing that they are taking your tax return for a defaulted student loan offset.I have not gotten anything from them and when I was supposed to get my refund I didn't get it. So I called ECMC, and they said real snotty YEAH we took it and there is nothing we can do right now until you case worker calls you.

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Attorney answers 3


You have a case worker that calls you to tell you that they are going to take your tax refund? Wow!

As you know, bankruptcy does not affect your student loan obligation. I have never had any creditor other than the IRS tell my clients when they were going to seize assets. So I can't imagine that there is any law that requires the student loan to do this before they take the money. After they take it, the IRS notifies you.

Hope this perspective helps!


The best I can say is that a right of offset may exist because the student loan agency is an agency of the Federal Goverment. Normally, before someone is allowed to seize your assets, notification is required. I would pose this question to the IRS Taxpayer Advocate's
Office. Also I would also ask the Student Loan Agency to cite the rule they rely on for the authority to seize your refund. Let me know what you find out at

Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract.

Good Luck starts with a strategy and a plan.

Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701

Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns,
Homeowner Association Strategist.


The agency has a right of offset as long as you owe the debt. I suggest you adjust your withholding so that you break even instead of receive a refund each year.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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