Q: I am way behind on my student loan and my husband would like to file together but I’m afraid that they will take the whole tax refund. What can I do to stop that from happening?
A: Since you are behind on your student loans, you are correct that you and your husband both could be at risk for your joint income tax refund being seized to pay those student loans.
But it really depends on the type of student loans and the status of them.
Certainly, if the loans in question are federal student loans (not private loans), then the government can easily snatch your income tax refund check. And they don’t have to give you any notice about it either.
But even if it’s a private loan, a creditor can go to court and get a judgment against you and try to either garnish your wages, attach your bank account assets or even put a levy against any income tax refund check you may be expecting.
One key to all of this, though, is the status of your loans. How badly overdue are they? Are they simply 30, 60 or 90 days behind? Or are they officially already in “default” status? You are considered to have defaulted on a monthly student loan if it hasn’t been paid in 270 days.
Read this article I wrote to find out How to Fix Defaulted Student Loans.
In the meantime, your best option is to contact your student loan servicers directly and try to work out a deal with them for a repayment plan. That might stop them from trying to get your income tax refund check.
Otherwise, you can look into filing married but separate tax returns, though that typically makes your overall household pay additional taxes.