Five steps to student loan wage garnishment
The best way to prevent wage garnishment and bankruptcy is to never let a loan lapse in the first place. It is best, and recommended, to contact the people that own your loan and work something out before garnishment ever starts. If your loan has gotten that far, it is important to know your rights.
Though garnishment laws are different for each state, Student loans are federally insured and do not fall under bankruptcy protection.
Keep in mind that the Department of Education is only entitled by law to garnish 15% of your net income. They can draw this amount as long as your weekly pay doesn’t fall below federal minimum wage. You cannot take home less than $217.50 per week and they are not allowed to garnish your wages below that. They do have the right to levy bank account and take your property without a judgment in court. If you are in a tough financial situation, it is in your best interest to contact the Department of Education. If child support or home payments are conflicting with you financial situation, and you are struggling to stay afloat, you might be able to prove financial hardship and be able to work out a deal to delay, or stop garnishment from happening.
- The easiest thing to stop the garnishment is to pay it off in full. If the loan has gotten to this stage, it probably is not an option however. Paying the loan in full will stop or prevent the garnishment.
- Contact the company that owns your loan and find out who filled the writ of garnishment. When Creditors own a loan or are trying to collect, it is possible to work out a payment plan or settlement before the loan goes to garnishment.
- Research a writ of garnishment. In some hardship cases, garnishments can be stopped or delayed. Find out the court that issued the garnishment and file a “claim of exemption” form.
- Request a full accounting of what you owe and whom you owe it to and get it in writing. Don’t be taken advantage of. Once you know the facts, it may be in your interest to seek legal advice.
- Allow your wages to be garnished. If it does not put you in a terrible position, and you are to pay it, one option is to allow your wages to be garnished and pay what is owed. If it gets this far, and you do nothing about it, the garnishment will continue until the amount is paid back in full. Not the most attractive of options, but it will remove the debt from your record eventually.