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Can my taxes be garnished for a car loan?
I recently lost my job, and I’m nervous I won’t be able to afford my car loan payment this month. I don’t know what to expect. Will my taxes be garnished for a car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear that you lost your job. If you are nervous you won’t be able to make your
car loan
payment, you should contact the lender immediately to avoid repossession.If legal in your state, tax returns can be garnished for a car loan—but only if the vehicle has already been repossessed and sold for less than your outstanding loan balance. Your tax return (or wages) could be used to cover the deficiency between what you owe and the vehicle’s selling price.
However, because the vehicle hasn’t been repossessed, you should inform the lender of your situation before you miss a payment. More often than not, your lender will be understanding and help you find a solution, such as modifying the loan, deferring payment, or refinancing into a loan that better suits your current financial situation.
If you’re looking to save some money to make your loan more manageable, use
Jerry
to lower your car insurance bill. Jerry is an insurance
comparison app that shops for low prices with over 50 insurance companies for free. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away!View full answer
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