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Old 01-30-12, 03:59 PM   #1
RubenX 
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Tax refunds & student loand

I have my students loans paid, thanks God! But this question is for a friend...

I know that if you have a defaulted student loan, they will take your tax refund. but we have 2 questions:

1) If they take the refund, they take the whole thing or just a percentage?

2) If he files jointly with his wife, will they take it anyway?

About number 2, i remember when I took student loans and I was married, my wife had to sign. In that case, a wife can't complain if they file jointly and their combined refund gets the ax. But my friend married this woman years after he finish college. So I'm guessing, the bank has no right to mess with her refund... kind of a long shot but it's worth asking.
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Old 01-30-12, 05:31 PM   #2
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Is your next ex-wife willing to sign for your student loans?
If so,lets go for Doctor Ruben,physcologist of the Miami jet set
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Old 01-30-12, 06:10 PM   #3
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Is your next ex-wife willing to sign for your student loans?
If so,lets go for Doctor Ruben,physcologist of the Miami jet set
LOL, no, I'm already out of those evil loans and there's no interest in getting on them ever again. This is for somebody who has a quite big student loan debt (around 40k). He married last year and is trying to decide if he should file separately or not. His wages where being garnished but he lost his job... now got new job and is not being garnished *yet*.

My personal opinion is he should file jointly because of the tax benefits... and if the refund gets garnished, then let it be... it has to be paid sooner or later... the sooner the better (less interests that way). But if the return does get garnished, he's gonna have an additional debt to his current wife, situation he would rather avoid.
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Old 01-30-12, 10:30 PM   #4
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So I'm guessing, the bank has no right to mess with her refund... kind of a long shot but it's worth asking.
Pretty sure the bank has nothing to do with taking the refund. Uncle Sam grabs it before sending it off to the bank.
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Old 01-30-12, 11:07 PM   #5
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Okay, this is from experience.

1. If the refund is more than the amount owed on the defaulted loan, then they will only take enough to cover that debt. But if the debt is greater, then the whole enchilada is intercepted.

2. If filing joint- unless collection efforts have started against her because of co-signed debt, then she *might* still be able to get some of the refund. However, even if she isn't associated with the debt at all, you would be wise to fill out an additional form where she claims to be the "Injured Spouse". When my wife got behind on child support, they intercepted the entire refund and I had to go and file for Injured Spouse.

When filing jointly, an Injured Spouse claim forces the IRS to break it down to individual incomes/obligations. And that process can take a while- one year didn't get the refund back until the Fall. After 2 years of that madness, we just started filing separately. Slight hit on the refund, but get it back a lot quicker.
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Old 01-31-12, 02:25 AM   #6
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Man, I feel bad for no1mad, he's always getting screwed somehow. Taxes, Student Loans, Child Support, Custody Issues, peeping toms, you name it...
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Old 01-31-12, 11:19 AM   #7
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no1mad has it right, though; the IRS will take up to the amount owed on a defaulted loan from a tax refund - the "injured spouse" form protects the spouse's calculated "share" of a tax refund, whether it's being grabbed because of loan default, child support, unearned VA benefits, or unemployment overpayment.

...some people think this is an actual repayment plan!
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Old 01-31-12, 01:12 PM   #8
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I'd say he should just file separately and start paying off the loan out of his new paychecks before they get garnished too.
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Old 01-31-12, 01:25 PM   #9
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I'd say he should just file separately and start paying off the loan out of his new paychecks before they get garnished too.
Talked with my friend today, that's what he's gonna do.
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Old 01-31-12, 04:44 PM   #10
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LOL, no, I'm already out of those evil loans and there's no interest in getting on them ever again. This is for somebody who has a quite big student loan debt (around 40k). He married last year and is trying to decide if he should file separately or not. His wages where being garnished but he lost his job... now got new job and is not being garnished *yet*.

My personal opinion is he should file jointly because of the tax benefits... and if the refund gets garnished, then let it be... it has to be paid sooner or later... the sooner the better (less interests that way). But if the return does get garnished, he's gonna have an additional debt to his current wife, situation he would rather avoid.
You're marrying upscale (new and improved wife)over the last one so lets improve the Rubester,right?This is a whole new chapter of Rubenstory(tm)"The Rubester Seeks a Bride". America is in deep debt,are you something special hombre to remain debt free?It's the duty of every citizen to educate to the highest level and throw cost to the wind.
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Old 01-31-12, 04:47 PM   #11
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Just remember gang,no one ever got in trouble by keeping their pants on
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Old 01-31-12, 04:50 PM   #12
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Just remember gang,no one ever got in trouble by keeping their pants on
Unless their pants were on fire.
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