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Out-of-Service Debt
Bankruptcy
Frequently Asked Questions

  1. You offset my Federal tax refund, and I included the debt in my bankruptcy filing. Will I be reimbursed?
  2. How do you determine the date the funds were offset?
  3. I made several payments or my Federal tax refund was withheld prior to me filing bankruptcy, will I receive a refund?
  4. If you determine I am entitled to a refund, when can I expect to receive the funds?


1. You offset my Federal tax refund, and I included the debt in my bankruptcy filing. Will I be reimbursed?

Answer:   Absolutely. In most cases we receive an individual's bankruptcy information through the respective bankruptcy court; however, on occasion the proper documentation is not received. Please contact our customer contact center immediately upon learning your federal tax refund was offset. You should receive a letter from the Department of Treasury advising you of the offset. Once we receive your bankruptcy documentation your account will be reviewed. If your federal tax refund was offset after the automatic stay, a refund will be issued. Depending on they type of bankruptcy filed, a hardcopy check will either be mailed to you directly or to your attorney.
 
2. How do you determine the date the funds were offset?

Answer:   Often, customers believe that the date the funds post to the account is the date used to determine if funds should be returned. However, the date the funds were actually withheld by the Department of Treasury via the Treasury Offset Program is the date used to determine if you are entitled to receive a refund. For example:
No Refund is due:
Date your federal refund was offset: March 23, 2003
Bankruptcy filing date: March 24, 2003
Funds post to your account: April 10, 2003

Refund due:
Date your federal refund was offset: March 23, 2003
Bankruptcy filing date: March 22, 2003
Funds post to your account: April 10, 2003

 
3. I made several payments or my Federal tax refund was withheld prior to me filing bankruptcy, will I receive a refund?

Answer:   No. Funds received prior to bankruptcy filing will not be refunded.
 
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4. If you determine I am entitled to a refund, when can I expect to receive the funds?

Answer:   It takes approximately 3 weeks from the date of the Department of Treasury's letter for the funds to post to our database. Once the funds have posted to your account a priority refund request will be submitted for processing.