Categories: Student Loans

How to Stop Student Loan Wage Garnishments: 3 Steps to Take Now

Nothing brings home the burden of student loans like getting a letter telling you that your wages are being garnished. Your definition of disposable income and the court’s definition might be at severe odds. However, you did not get here overnight. Your loans have to be in default – that is over 270 to 330 days delinquent – in order to have your wages garnished. When your loan enters default, that means you get the bill for that particular loan plus interest to be paid in full, including interest, collection charges, and so on, right that very minute. This is a tactic of last resort for creditors like the Department of Education and private lenders.

There are steps you can take if you need to know how to stop student loan wage garnishments – none of them are steps you are going to like, but I can guarantee you are going to dislike having a defaulted student loan on your credit for the next seven years a whole lot more. If you have a Perkins loan, that loan is on your report until you pay it off. Unemployed? Tough, they can freeze your bank accounts. And you might have to kiss those credit cards goodbye when the default hits your credit report.

If you are facing student loan wage garnishment, you need to try these three things:

  1. Request a hearing to challenge the garnishment. You can challenge a garnishment if you were fired from your last job and have been employed at a new job for less than a year. However, you can also challenge on the grounds that you have repaid the loan or currently paying under a payment agreement, that your school failed to refund you monies owed (such as if you dropped a course), or was closed or issued false certification. If you have filed for bankruptcy, or are permanently and completely disabled, you can also stop that garnishment.
  2. Rehabilitate, consolidate or refinance, or negotiate. All of these options are credible depending on whether you have federal student loans or private loans and all of them have pros and cons.
  3. Get current and start looking for loan forgiveness programs, determine eligibility for forbearance or deferments, or hunt for a job that will help you pay your loans as part of a benefits package.

If you’re starting down the road to default, you owe it to yourself not to make the trip. You might tell yourself that you can make up a skipped payment, but these things have a way of snowballing. If you are having a problem making your monthly commitments and are juggling your obligations, you need help and advice so you don’t end up in default. Call our office, set up a free consultation, and let’s sit down with your paperwork and figure out a way forward. If caught early enough, we can resolve the problem and you can have a really good outcome without working three jobs and couch surfing in the meantime.

Published by
Chad Van Horn

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