May the government seize a tax refund to offset a debt discharged by operation of law?

Question

My spouse had student loans stemming from her prior marriage, which due to factors beyond her control she was not able to repay.
These were incurred in the late 1980's. In 2005, she and I filed a
Chapter 7 petition to discharge these debts, since we met the criteria established under In re Pena, decided in 1997. The Department of Education did not appear at the hearing, and they made no objection to the discharge of the debt. Now, two years after the petition was granted, the DOE claims that the debt was not subject to discharge, and in addition even though under law only half the refund should be seizable, DOE claims that they are entitled to the whole amount.
First, can the government collect a debt that has been wiped out by operation of law? Can the government disregard those laws that it finds inconvenient? Second, a spouse is not supposed to be liable for the educational debts of the other spouse. So why are they entitled to the whole refund?

Answer 1

This debt is past the statute of limitations for collecting a debt unless they have been refreshing the debt before the statute of limitations have run out.

Second if the debt was listed in the Chapter 7 action, it should be discharged. If you failed to mention it as one of your debts, perhaps the government can manipulate you by continuously refreshing the debt past the statute of limitations.

Please be advised that I am certainly no lawyer, just someone who wishes to help. Check the two things that I have listed above and see if it helps. God Bless, Martha S.

Answer 2

no longer genuine, i be conscious of i'm previous due, yet perhaps some else is going via this. #a million) do no longer report #2) request an extension, fairly basic on the internet internet site #3) consolidate your loans and confirm you call consistently to be certain whilst they are going to checklist the consolidation to the dep. of Ed. touch the IRS and locate out your stability. whether that's $0 yet they nonetheless say you have an offset, you would be able to run right into a controversy the place they are going to deliver the money to the dep. of Ed. and then refund it decrease back to you. as quickly as your own loan is consolidated you now no longer owe any money to Dept of Ed so that they won't be able to take your refund. submitting an extension provides till Oct to get all of this dealt with. do no longer pay attention to unfavorable Nancies and don't supply up. I did it via April 15 and that i began Jan 15.

Answer 3

You mentioned that the courts have discarded this student loan, thereby, releasing you of its debt. If all of this really happened then where is the documentation of the decision made. With this all of your woe and worries could easily fade away.

On the tax offset, although the IRS has held its entirety, you can request them to figure your tax refund and receive that portion which you are legally entitled to. But, your wife share would go to the DOE for the student loan that you mention, unless you can provide the decision stating she was relieved of this loan personally.

Answer 4

What a story!! She gets a free education; thanks to not repaying her loans, we, the taxpayers have paid for it. There is NO reason for her to NOT pay back what she loaned.

Yes, the government can take not only your tax refund but can attache your bank accounts, too.

It is true that you, the spouse, are not legally responsible for debts she incurred before you were married. However, as long as you and she hold funds jointly, you are going to get stuck too. The only way they can attacher her funds is by attaching the accounts with her name on them. Your best bet is to have separate accounts.

As to the disposition of the loans, the government can, at their discretion, honor the bankruptcy. The decision is made based on circumstances of the loan only. If she were severely handicapped and unable to work, they might recognize it - just a for instance. But if she is able bodied and able to work, she owes us money.

Answer 5

I don't believe a federal student loan can be forgiven in Chapter 7 bankruptcy. And any income you have, including a tax refund, can be forfeited against a debt if an order is made to do this.

Answer 6

It is my understanding Federal Student Loans are not dischargeable under any circumstances. Death, taxes, and the government will hunt you forever to get their student loan money back - including hyjack your tax refund.
She took out the loans, she got an education (if not, her problem no body elses) so she owes the government the money,

Answer 7

Sounds like business as usual, government re-writing law at their pleasure (at the expense of the citizen).... sure they are in error (legally) but because of their claim they have "created" a burden of proof that you must now discharge. This happened with regularity in the old USSR and satellites... all it take is money, and they shut up. "Freedom" is not "Free".