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Problem: I am a resident of a non-community property state. My wife is going through massive financial problems. In fact, she has not made any payments for the last 180 days. One of her credit card accounts has been assigned to a Greystone Alliance collection agency. I have told my wife to deal with the collection agency several times. However, my wife was so busy with her studies that she didn’t get time to deal with the collection agency. The Greystone Alliance collection agency filed a lawsuit against my wife and obtained judgment. My wife is a student. She is currently unemployed. She doesn’t have any income also. Usually, both of us file income tax returns as married filing jointly. We mention in the income tax return that one spouse is not employed. The tax filing season is approaching. I’m little bit scared. As it had already been mentioned, the Greystone Alliance collection agency has obtained a judgment against my wife. Can this judgment create a negative impact on my tax refund? Solution: You’re afraid that the Greystone Alliance collection agency will garnish your tax refund. Don’t worry. The collection agency won’t be able to touch your tax refund. Perhaps you’re not aware that only federal and state agencies are permitted to garnish tax refunds. If you have a joint checking account with your wife and the tax refund will be deposited into it, then there may be a problem. You said that your wife is not working, which means that she has no income. In such a situation, the collection agency may try to use the judgment to withdraw money from the joint checking account. You may lose your tax refund in that case. Moreover, the judgment may also be utilized to impose a lien on a property with your spouse’s name on it. I know that your wife is unemployed right now. Still, I would advise her to tackle the credit card debt. I assume she would want to work after finishing her studies. There are several employers who may check her credit report before giving a job. Your wife’s poor credit score may prevent her from getting a lucrative job. Your wife can earn some dollars while studying. She can do a part-time job to make money. This would help her gather work experience, which will be extremely beneficial for her. In case, she has no time to do a part-time work, then you can try to curtail expenses and pay off the debt. You’re quite sure of getting a tax refund. You can at least use the money to repay your wife’s credit card debt. I’m quite sure that judgment has been reported on her credit report. This may make it very difficult for her to get a job in future. She will suffer in the long run. Finally, it is not only the employers who will check her credit report. The insurance companies will also check her credit report to determine the premium rate. This implies that your wife has to pay a greater amount for the premium rates. So, my suggestion would be to repay the debt as soon as possible.
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