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Bill Would Allow Debt Collectors To Seize Tax Refunds

Chris Potter
/
https://www.flickr.com/photos/86530412@N02/

A bill which would allow the state to take or reduce a person’s state tax return to settle a debt is working its way through the Senate.

The measure has already been approved in the House and the Senate Civil Laws Committee heard testimony on it Monday.

Fort Wayne Representative Casey Cox authored the bill and says the measure makes it easier for debt collectors to have access to an individual’s funds.

"You can already do this right now," says Cox. "You just have to wait until that refund is deposited into a bank account. Certainly you have no idea when that's been done, but those same dollars could be garnished through a ban account levy."

Cox says debtors would be notified before any garnishment occurs.

Still up for debate are parts of the bill that refer to so-called “non-obligated” spouses, or spouses who filed jointly but aren‘t responsible for their partner’s debt.