Can they keep my taxes because of my medical debt?

by Ashlee
(Rialto Ca. US)

I have medical bills and it went to collections so I want to know when i do my taxes can they keep my taxes or not give them to me?

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Dec 09, 2011
Can they keep my taxes because of my medical debt?

No Ashlee, the collection agency cannot keep your tax refund. However, if it sues you for the money you owe and wins a judgment against you, the agency could get the right to take money out of your bank account and so it could end up with your tax refund that way. Also, the agency could get the court's permission to collect on the judgment by garnishing your wages, putting a lien on an asset you own, or even by taking an asset from you.

Have you spoken with the agency about the possibility of your paying what you owe over time by setting up an affordable payment plan? Do not agree to payments you cannot afford and if you and the agency reach an agreement, don't pay any money until you have the terms of the agreement in writing.

Another option may be to try to settle the debt, which involves paying off the debt for less than what you owe on it, but you will have to make the payment in a lump sum. Again however, do not fund a settlement until you have everything in writing. To learn more about how settlement works, listen to our debt settlement podcast.

Filing for bankruptcy may be another option you should consider. In fact unpaid medical bills are one of the leading causes of consumer bankruptcy in this country.

Go here to find out about all of your options when you cannot pay your medical debt and to schedule a free consult with a bankruptcy attorney if you decide that you would like to explore that particular option, medical debt collection

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