It’s that time of year again, when everyone who has a tax refund coming is waiting in blissful anticipation of the money hitting their bank account. Sometimes it’s already spent: paying down debts, getting some needed dental work done, paying for a little indulgence, or knocking out some credit card debts. However, all your plans can be derailed when you get a nice little note from the Treasury Offset Program. Payback is forever, and if your name and TIN (Taxpayer Identification Number) match up to a name and number in the TOP database, you could see that refund disappear.
You Will Be Notified
This is a matter of due process, meaning that by the time that refund is attached to pay for your student loan, there are a lot of other things that have had to happen before this.
- You will have been informed about the debt, the amount owed and its origin.
- You will have received notice of the agency collecting the debt via the offset program.
- You will have had an explanation of your rights including the right to inspect and copy documents relating to your debt within 20 days from the issue date of the notice
- If you have not requested to inspect and copy the documents, you have 65 days from the issue date (not the date of receipt) to request a review.
As I have said in other articles, this is not something that just happens; there are lots of factors at work here. A debt can be sent to TOP if it is 90 days delinquent and has been determined to be valid. The information is then sent to the database, and before your payment is processed the database is searched to determine if you are delinquent. If your student loans are in the database as delinquent, all or part of your refund can then be offset and applied to the delinquent balance. The remaining money (if any) will then be remitted to the taxpayer.
This is the reason to stay on top of that student loan debt.
You can’t say that I didn’t warn you.
Now, if you are in receipt of this notice, there are ways to save your refund. One of them is to make a payment for the delinquent amount directly to the agency. How you do this is up to you. Certainly consolidation is an option, but that could end up being a lot less cost effective. Consolidation loans are not free programs where people give you money from the goodness of their hearts. Consolidation loans exist because they make money for the institution generating them. If you feel that the collection is in error, either because you are actively paying off the loan and are not delinquent, or the debt has already been paid, you need to gather your paperwork and get ready to prove it.
Finally, if you feel like all of this is putting you in way over your head, call us at Van Horn Law Group, and we’ll help you tame the beast of overdue student loans so that all your future refunds make it safely home.