I got hit by a car while crossing the street in a crosswalk. I have been waiting for a settlement for over a year. When I filed my taxes the irs took my refund because a lien from 6 year old student loans totalling $14000… Will they take my insurance settlement if it ever comes???
4 Comments Already
August 27th, 2010 @10:55 pm
IRS had an offset filed and in place for them to turn over your refund to the lending agency. This has nothing to do with your insurance settlement; unless it is from the IRS?
August 27th, 2010 @11:37 pm
The IRS will not step in and take the money from the insurance company.
However, if they have a lien on your bank account, they can take the money as soon as you deposit it.
The wise thing to do would be to use the settlement to pay off or pay down the outstanding loan so you can put the debt behind you and get on with your financial life. It wont go away until you pay it, so you might as well pay it now.
August 28th, 2010 @12:33 am
the IRS doesn’t know that you are getting an insurance settlement and whoever is paying is not required to withhold taxes
Yes, any money paid will take into effect any outstanding loans