Can tax refund be seized to satisfy ajudgement?
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Can tax refund be seized to satisfy ajudgement?
I lost a case with a credit card company that alleged that I owed them over $10,000, and now have a judgement against me. I am expecting a tax refund this year, since my husband was out of work during all of 2010. If the IRS issues a check made out to both of us, and it is deposited into our joint bank account, can the aforementioned company seize it, in whole or in part, to go toward satisfying the judgement? I have not filed for bankruptcy.
Asked on February 9, 2011 under Bankruptcy Law, Florida
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
A creditor cannot intercept a tax refund. A refund is sent to the taxpayer and, other than the federal government, a creditor cannot directly garnish such monies. However, once a tax refund is received and deposited into a bank account (including a joint account), then if a creditor has a valid judgement against a debtor, it can garnish these funds. In fact, it can garnish any other non-exempt funds has well.
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