Can a creditor garnish or take your tax refund? Well, yes and no. The only types of creditors that can take your tax refund before you receive it are state and federal government agencies.
State and federal government agencies can take your refund even before you receive it. Examples of when this could happen is if you owe the Franchise Tax Board, child support or if you owe the D.M.V.. Everyone else is out of luck until after you actually receive the refund.
Other creditors, such as credit cards or collections agencies, can take your tax refund after you have received it. This means that they cannot take the tax refund before you receive it, but they could levy your bank accounts and take whatever money is in those accounts. So if you have received your tax refund, and it was deposited in your bank account, it can at that point be taken by any creditor that is legally levying your bank account.
Bankruptcy, however, can stop creditors from garnishing wages, levying bank accounts and in some cases can stop creditors from taking your tax refund. You should consult with an attorney to find out whether your tax refund can be protected, and how to stop creditors from levying your bank accounts, garnishing your wages and potentially even discharging those back owed taxes!
Contact us today to discuss your case!