Ways & How

how to stop garnishment of wages for student loans

how to stop garnishment of wages for student loans

When a student loan becomes delinquent, the Department of Education, or the agency that was responsible for administering the loan garnishes 15 per cent off the net income of the student as allowed by federal law. This is applicable as long as the garnishment does not reduce the student’s disposable earnings to less than 30 times the minimum hourly wage per week. How to stop garnishment of wages for student loans is sometimes needed when the borrower’s financial situation has been jeopardized. Changes in life after graduation can sometimes drain you financially. An exemption may be filed if you can prove that you are only receiving less than the amount of the exemption. Be aware that the federal government has the privilege to invoke an administrative wage garnishment. This means it can levy bank accounts, sequester properties, and automatically garnish wages without a judgment from the court. Make sure that you are protected by reviewing the following measures to see what’s available to you:

  1. Take the initiative to talk to the lender, whether it is the Department of Education or not, and bring with you the proof that you are having a financial crisis.

    is may be a Notice of Foreclosure for your home or decreased work hours or a job loss due to downsizing. Most lenders will be open to work out a payment plan for you. There are also alternative payment options like working with them for certain hours per day to repay the garnishment.

  2. Reversing the wage garnishment is not common, but you can opt for this if you are really desperate. You have to deal with the court that is responsible for issuing the garnishment. This is where you must file your claim for an exemption. Also, review the Income-Based Repayment Plan and the Income Contingent Repayment Plan to see if either of these solutions is right for you.

  3. If you have the means, settle the garnishment fully. You can then renegotiate your defaulted loans to start to make payments to finish off your student loan. Check with the Department of Education for their current loan rehabilitation programs.

  4. Leave it as it is if you can’t decide what to do with the garnishment added to your student loan. The deduction in your wages will continue until the remaining balance is totally repaid. Understand, however, that if you have obtained the loan from a private lender, there must already be a lawsuit and judgment from the court before the lender can charge you with the garnishment for your delinquent student loan.

Alternative options need to be researched fully when you are really determined to stop the garnishment actions of your creditor because most lending institutions are very strict when implementing their rules and regulations as far as delinquent penalties are concerned. Filing for bankruptcy Chapter 7 is also not an easy way out because it cannot discharge student loans. Even if you are officially bankrupt, you are still not protected from your creditors. However, a Chapter 13 bankruptcy can make you relax a bit. Once approved, the court will supervise your repayment plan. Your monthly payments will be managed through the court thus making you safe from any forms of harassment by your lenders. How to stop garnishment of wages for student loans is not that easy, but in some cases it must be done. When it is done in good faith, your ability to turn things around financially will be enhanced because your concentration will be focused on how to augment your income rather than how to avoid irritating creditors.


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