Community Property

• Your husband's creditor may be able to take your income tax refund in a community property state because creditors may view his debt as your debt too. Community property states include Washington, Louisiana, Wisconsin, Arizona, California, Texas, Idaho, Nevada and New Mexico. In these states, timing is everything. As a general rule, if your husband became indebted while you two were married, then his debt, and the liability accompanying it, belongs to you too. If the debt pre-dated your marriage, you generally should not be legally responsible for the debt.
  
  

Separate Property

• If you and your husband live in a separate property state, also called a common law property state, his debts generally belong to him only. Accordingly, his creditors should be unable to take your individual tax refund to pay his debts. An exception would be if you co-signed the loan. As a co-signer, you are responsible for the loan if he defaults on it. Another exception may arise if the debt was for household purposes. If, for example, your husband took out the loan to repair your family home, then it may be possible for his creditors to classify the debt as marital, meaning it belongs to both of you.
  
  

Collection Methods

• To start going after things like your tax refund, your husband's creditor generally must first obtain a judgment stating he owes the debt. The judgment would empower the creditor to use collection methods such as garnishing wages and levying bank accounts. If your tax refund is in a joint bank account, the creditor may attempt to take it regardless of whether you're in a community property or separate property state. The creditor's success will vary based on your state's laws governing collection from joint accounts.
  
  

Bankruptcy

• Filing Chapter 7 bankruptcy is a way to relieve your husband of his debt obligation and relieve you of the fear of having your tax refund taken away. Depending on the size of your tax refund, you may be able to exempt it and then discharge your debts in bankruptcy. An exemption is a law protecting certain property from being sold for your creditors. A discharge is an order issued by the bankruptcy court declaring you no longer liable for dischargeable debts.