If you are in financial hardship and you owe on a student loan, can they take all of your income tax check refund?

I have a student loan that is in default but I can not pay due to financial hardship. I am a single mom with no support from kids father. Can the student loan people take all of my income tax refund? I thought if you were in financial hardship they could not. They are also trying to garnish my wages but I can not afford this. I need to support my children. I have 4 children and one is disabled. Any information would be great. Thank you

Davie, FL -

Attorney Answers (1)

Donald Erich Lowrey

Donald Erich Lowrey

Tax Lawyer - Las Vegas, NV
Answered

I am sorry that you find youself in this situation. You have not said whether your student loan was obtained privately or through a federally insured program. If the later, the debt is collected by the Federal Government. Unfortunately, congress has made the IRS a collector for various kinds of federal payments and levies through the Department of Treasury Finacial Management Program (FMS). The IRS does not have any discrection with regard to student loan debts reported through FMS.

What you will want to do is to obtain a hardship deferral, and have the deferal reported so as to remove or modify your account from FMS. An example, is an Economic Hardship Deferment Request submitted to the Federal Family Education Loan Program.

There may be some good news for you. The same FMS debt collection system works for you to collect back child support obligations. You should follow up with your local Family Court/DA office to make sure that unpaid child report is being reported to FMS. By doing so, you can put the IRS to work for you. Your ex-husband's tax refunds will be taken to pay his FMS debt and should eventually be paid to you.

Good luck.

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