Student Loan Defaults - Lost Your Income Tax Returns?

If you've defaulted on your student loans, you can expect your income tax return loan to be denied. The federal government reserves the right to take all income tax returns, even state income tax, to pay the student loan debt. The government can do this for as many years as it takes, unless you call and communicate with them. When you make a payment arrangement with them, you must follow through with the arrangement if you want to be able to keep your income tax return loan.

There are several different possible arrangements you can make, including a variety of deferments based on economic hardship, continuing education, or other conditions, and even forbearance for a certain period of time, up to 12 months at a time to keep the payments current without actually making any payments on the loans.

If you are dealing with a corporate income tax return, student loan debt cannot be garnished from these returns because corporations are not personal entities and your personal debt is kept separate from your corporate debt. However, because you can be sued over your student loan debt and your business assets may come into play, it is best to pay your student loans as agreed to completely avoid such an issue.

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