If Im in default on my mortgage, and Im owed money from the IRS like a tax refund, will I get my money or will the bank get that money ?
Answered on: 12/27/10, 9:55 am by Cameron Kelly
Simply being in default isn't enough for you bank to seize most funds. One exception might be if you have a bank account at the same bank that you have the mortgage at. Sometimes banks will "cross-collateralize" these accounts, and take money directly out of the account to pay the mortgage. However, the bank doesn't normally have the ability to take you refund just because you are in default.
If however, you have been sued, and the bank has received a judgment, there are garnishment proceedings that could result in the bank getting the IRS funds. Normally you would know if the bank had a judgment, or if they are garnishing, because they have to serve paperwork on you saying. It pays to make sure you are opening any official looking mail or deliveries, and if you aren't understanding it, get legal help.
If you have any questions, please feel free to contact me at Cameron Kelly Law.
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