Delinquent borrowers of five failed thrifts will have their state tax refunds intercepted to pay off their bad loans, officials said.

Liquidators of the defunct thrifts have received permission to use the state's "Gotcha" program using tax refunds to pay bad debts to help collect unpaid loans and increase reimbursements to depositors.The tax refund cannot be intercepted unless liquidators obtain a court judgment against the borrower.

The state will bear the cost of intercepting the refunds and handing proceeds over to the liquidators, Gov. Norm Bangerter said.

"The depositors' return should not be diminished by the expenses of the `Gotcha' program," he said. "The liquidators were appointed by the state and are acting as the commissioner of financial institutions as they liquidate the thrifts. We would not charge the commissioner if he were doing the liquidation."

Private parties can use the program but must pay the expenses.

Grant Thornton was selected last year to liquidate the assets of Charter, Copper State, Interlake and Western Heritage thrift and loans.

The four institutions, along with Commerce Financial, were placed under liquidation when the state couldn't find buyers for the thrifts after taking control of the insolvent Industrial Loan Guaranty Corp., which insured thrift deposits.

Larry H. Miller, Utah car dealer and co-owner of Commerce, received approval to liquidate his thrift.

Liquidators said they haven't assessed the impact "Gotcha" would have on liquidating bad loans.

Roger Brown, managing partner of Grant Thornton's Salt Lake City office, estimated about 1,000 judgments in the state's district and circuit courts could involve the "Gotcha" program, but he said a definitive figure has not been calculated yet.

John Woods, managing the liquidation for Miller's Commerce Financial, said he hasn't arrived at a figure for the number of judgments involved or the dollars the program could retrieve for depositors, but his staff has been researching judgments against borrowers over the past four years.

Through liquidation, about 15,000 depositors of at least four of the thrifts stand to lose a substantial part of their savings.

To date, depositors of Charter have received 33 percent of their money; Copper State, 28.5 percent; Interlake, 49 percent; and Western Heritage, 29 percent. Commerce depositors have received 16 percent of their deposit value with a guaranty to have 70 percent of their money by 1992.