Can a lender take your tax refund until the debt you owe is settled?
Being in debt creates a lot of problems. Everyday your debt gets a little higher due to interest owed. But in the world of taxes a lender cannot seize your tax refund in order to settle a debt you owe to a creditor, unless they do something first. The only way a creditor can take your tax refund is if they file and get a judgement from a judge that explicitly states they have the right to do so. For a judgement to be approved, the taxpayer must not have any other debts that could be causing problems for the individual. Ideally, only the IRS has the power to seize someone's tax refund, but can only do so for three specific reasons: if someone has overdue back taxes, if they have child support bills needed to be paid, and/or the individual has student loan debt that has yet to be settled. Those are the only legal occurrences in which your tax refund can be seized upon without a judgement. And remember that in order for a judgement to fall through, the individual must not have any of the three previously listed debts to his/her name.