Many Americans rely on their tax refund to catch up financially. If you’ve been counting on receiving a sizable refund, the thought that it could be garnished is undoubtedly frustrating. Fortunately, there are only a few scenarios in which tax refunds are subject to wage garnishment. 

When Your Federal Refund Can Be Garnished

Although the IRS is not a debt collector, there are situations in which they will garnish a tax refund. Garnishment of your federal refund can ensue if you fall behind on previous tax payments, federal student loans, unpaid child support, or any debt owed to the government. Additionally, although your refund cannot be garnished for private debts, creditors may be able to gain access to the funds once they are deposited into your bank account. Finally, creditors may be entitled to your federal refund if you filed for Chapter 13 and there was an addendum stating as much in the settlement. 

When Your State Refund Can Be Garnished 

Residents of Ohio may see their state refund garnished if they fall behind on certain kinds of debts, such as missed payments for state or federal tax obligations, debts owed to the attorney general, unpaid spousal or child support, and missed payments to the Bureau of Workers’ Compensation or the Department of Jobs and Family Services. If your state refund will not be enough to cover any such obligations, the corresponding agency will attempt to garnish your federal refund, as well. 

If you are struggling to make ends meet and worried about garnishment, declaring bankruptcy could be the answer. To determine if your debts are dischargeable, turn to Harry B. Zornow in Hamilton, OH. For more than 30 years, he has been helping clients regain their financial footing. Since he assists with both Chapter 7 and 13 bankruptcies, he can ultimately help you secure the debt relief you need. To request an initial consultation, call (513) 737-9770 or complete the form on his website.