Can filing stop Treasury Offset for student loan and TSP withdraw?

[phxtoatl]

Greetings all,

I have 2 federal debts - Back taxes and a student loan. Both of them have enlisted help from the "TOP" (federal Treasury Offset Program). I have read that Department of Education and/or the loan lender have to cease collection efforts while my Chapter 7 case is active. Does that mean that the Department of Education is required to inform the Treasury Offset Program not to intercept or sieze any portion of the funds that still due to me?

I am still waiting for a payout of back annual leave from my former federal employer.
I was also considering withdrawing the little I have in Thrift Savings Plan – I would delay bankruptcy and finish some other things first – I'll file next month if I can pull TSP funds out without getting them offset.

If either one of these can still be offset, does anyone know at what rate?
NFC people told me that the vacation leave payout is not considered wages  That would stink because I know that offsets are limited to 15% of wages but they can grab 100% of payout labeled “misc” Anyone had to deal with this?

Thanks

[AngelinaCatHub]

Greetings all,

I have 2 federal debts - Back taxes and a student loan. Both of them have enlisted help from the "TOP" (federal Treasury Offset Program). I have read that Department of Education and/or the loan lender have to cease collection efforts while my Chapter 7 case is active. Does that mean that the Department of Education is required to inform the Treasury Offset Program not to intercept or sieze any portion of the funds that still due to me?

I am still waiting for a payout of back annual leave from my former federal employer.
I was also considering withdrawing the little I have in Thrift Savings Plan – I would delay bankruptcy and finish some other things first – I'll file next month if I can pull TSP funds out without getting them offset.

If either one of these can still be offset, does anyone know at what rate?
NFC people told me that the vacation leave payout is not considered wages  That would stink because I know that offsets are limited to 15% of wages but they can grab 100% of payout labeled “misc” Anyone had to deal with this?

Thanks

OK, I don't understand all the terms used but, here is what I do know. IRS will stop all action for taxes. They are Tolled, not stopped and will continue where left off after discharge or dismissal. I shall assume the student loan situation will also be tolled. It is unwise to take out exempt money and putting it towards anything that is good money after bad. Vacation pay is pay. It is income. A vacation is a benefit given my your employer and if you have a choice of the time off or extra pay, it still boils down to income. The look back for safety is about 90 days. Could be longer and could be up to ten years or more if fraud is suspected.

Hope others chime in and correct me or back me. Either way, I hope you are helped. 'Hub

[phxtoatl]

Thanks for the fast response. I have no income for the last month and a half. If the back pay for leave is considered income by the court, that's fine. I hope it is by the TOP. I am behind on utilities and I need to pay them with that money... Sounds like 'Toll' is kind of like forbearance?.. That works for me. Do you anyone have any idea about how long the department of education would take to notify the treasury offset program to temporarily stop withholding federal payments to me?

Even if I leave the TSP where it is I need the other money ASAP. I don't want to have to make a hundred calls asking why it would take 30 days for the department of education to refund the money to me if my check comes before the 'Toll' so-to-speak.

Thanks again for the info on the TSP (Thrift Savings Plan) withdrawal. I don't want to take it but I have to eat and pay the electric... I know if I do, I'll put off BK; you really think 90 days?

Thanks again

[tcreegan]

Hi phxtoatl,

Does that mean that the Department of Education is required to inform the Treasury Offset Program not to intercept or sieze any portion of the funds that still due to me?

....given my experience with the Dept of Ed, don't bet on it. I'll wager they get around to informing TOP about the time your BK case closes...

I will give them this; they are good about not bothering you during a BK.

I know if I do, I'll put off BK; you really think 90 days? Calculate your last 6 months of income (all sources) and try to stay close to AZ median income of $3493 month. If taking a payout puts you over, wait until the 6 month avg comes back down. If this is not a problem, then you just need to worry about the TOP. But whatever you do, document where the money went. You want to spend it down b4 the BK, legit expenses...electricity, food, no problem, trip to the Bahamas not so much.

Good luck to you, I feel your pain with dealing with Dpt of Ed....

Tom in Colo