A creditor is threatening to take my tax refund. What do I do?
Being hounded by collection agencies is one of the most stressful things to have to deal with when you’re already struggling with money. To make things worse, many collection agencies frequently lie or mislead borrowers about what will happen if they don’t pay their bills. One of the most awful examples of this are bill collectors who threaten to take a person’s federal income tax check.For most Americans, income tax season is the only time that “extra” money shows up. A lot of households count on this money to pay for needed repairs, school tuition, or other expanses that just don’t fit in the family budget. This is why collection agencies see tax refunds as such as good way to threaten their debtors. Losing a tax refund check can be a huge blow to a family or individual that is already struggling.The problem with this threat is that it is impossible. A tax refund check can’t be garnished by a private company. While it is possible for a bill collector to garnish your wages under limited circumstances, or for the federal government to garnish a tax refund check, it cannot be taken by anyone else.That means that when a bill collector tells you that they will take your refund check, you can tell them that you know they can’t. Don’t expect them to simply stop calling because you called their bluff, however. In fact, the phone calls will often become worse because now they know that you’re taking this debt seriously and are looking for ways to get them to stop calling.
Because of this, it’s a good idea to get proactive about these old debts. A debt consolidation loan might be just the thing that you need to pay off your old debts on your terms. With a debt consolidation loan, all of your debts are paid and replaced by a loan with a low interest rate and great payment terms. For many people, these loans give them a way to pay off their old debts and their current credit cards for less than the amount that they currently pay on their debt.