5 best ways to stop student loan wage garnishment

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Read these articles to understand this concept thoroughly,
1. “Does bankruptcy stop wage garnishment
2. “Debt validation original creditor
3. “Debt negotiation

Debt Validation

Debt validation process – Be sure to know who you owe

Due to the enormous credit crisis happening not only in the U.S. but the world as well a lot of people aren’t aware of their rights when it comes to debt valuation adjustment. With so much debt on peoples shoulders and the willingness to get their selves out of debt there are companies floating about that misrepresent themselves as debt collectors.

The consumer has a right to request legal documentation of whatever debt is owed to a creditor. Most individuals are only aware they owe so when a third party collection agency contacts debtor with a monetary figure most consumers will believe that this is what they truly owe. Not true. It is important that consumers know exactly who and more importantly exactly what they owe. As most could probably guess debtors are over paying because a third party collection agency told them they owe the principle, interests and late fees. Or, the worst case scenario of all, you are steady making payments to this collection agency and they aren’t even affiliated with the true creditor. So basically you are giving your money away.

Under the FDPCA, (Fair Debt Collection Practices Act) the collection agency contacting you must provide legal documentation of the debt as well as legal documentation that they have bought the debt from the creditor. If no information has been sent to the debtor within 30 days they’ve violated the FCRA or Fair Credit Report Act. Because of this violation the debtor is within his/her rights to sue the collection agency under this act for damages up to $1000. You may also be able to sue them in state and federal courts for the incident and damages too.

So before you agree to pay some collection agency money for a debt you would be wise to investigate and ask for specific information pertaining to your debt, how they acquired your debt and you may want to find out about their business as well. For all you know they may not even be licensed in your state to bother you about collecting debt you owe to someone else.

Debt validation letter

debt validation letterDebt validation follow up letter

debt validation follow up letter

How to deal with credit card collection agencies

Fair debt collection practices act

Playing by the rules –  Fair debt collection practices act

The Fair Debt Collection Practices Act (FDCPA) provides a guideline that must be followed by a debt collection agency attempting to collect a debt. The Fair Debt Collection Practices Act FDCPA was enacted in to law in 1978 in order to protect consumers from being subjected to deceptive and abusive practices by those attempting to collect a debt. The Statute is quite comprehensive and lists behaviors that are prohibited as well as behaviors that must be followed.

  1. Prohibited conduct includes a wide range of items. Some of the most important actions and behaviors that are not allowed under this statute include not being able to contact a consumer at all hours of the day. Debt collectors may only call consumers between 8:00 am and 9:00 pm local time.
  2. Threatening to have the debtor arrested or to initiate legal action as a scare tactic is absolutely not allowed.
  3. Profane language, misrepresentation and any attempt to embarass or disparage a person that owes money will be dealt with severely under the provisions of the FDCPA.

These are some of the things a debt collector can not do. There are many others outlined within the statute. There are also a number of things a debt collector must do in their attempt to collect.

  1. In every communication, by phone, mail or any other manner, they must identify the communication as being from a debt collector.
  2. They must inform you of the original creditor within 30 days of a written inquiry by the consumer.
  3. The consumer has the right to know all the details of the alleged debt.
  4. The debt collector must provide verification of the information being used to try to collect the debt if so requested by the consumer. Failure to provide such information means that the debt collector must stop pursuing the debt .
  5. If the debt collector decides to file a lawsuit, the lawsuit must be filed in the jurisdiction where the consumer lives or where he signed the original contract.

The Fair Debt Collection Practices Act Statute of Limitations keeps a debt collector from pursuing a debt that may have been incurred twenty years back. Consumers should know their rights by reviewing the Fair Debt Collection Practices Act. You don’t have to take any abuse.

You must read, “How to deal with credit card collection agencies” and “Debt negotiation“.

How to deal with credit card collection agencies

If you have been getting calls from credit card collection agencies, you need to know how to protect yourself from harassment. Debt collection companies have strict laws they are supposed to follow, but some collectors choose to ignore these laws. Learning about credit card collection laws can help you fight back if you are being harassed by one or more collectors.

If a credit card collection agency is calling you at work, calling you in the middle of the night or before your waking hours, brushing up on your rights will help you deal with them. While the credit card collection process allows collectors to contact you on numbers you have supplied, they must stop calling you at work if you notify them that you are not allowed to receive calls.

Any time a credit card collection agency contacts you or attempts to collect a debt you need to confirm that the debt is actually yours. A collector will always tell you that the debt they are calling about is yours and is valid. They don’t really care if the debt really belongs to you, they simply want to be paid.

When you receive any form of contact from a debt collector it is a good idea to contact them in writing and request validation, or proof of the debt. You will have to send a letter via regular mail, but they are supposed to provide you with proof of the debt or cease collection activity if they cannot. Include a request to be contacted in writing only when you send your letter, and any troubling calls should cease.

Investigate any debt a collector calls or contacts you about. The debt may not be valid, it may be out of the credit card statute of limitations, or you may be an unwitting victim of identity theft. Keeping track of what is on your credit report is important if you plan on making large purchases or buying a home.

Your credit card collection rights include the right to be contacted by mail instead of by phone. If constant credit card collection calls are a problem for you, send each collector a letter via registered mail letting them know you only want to be contacted in writing. This is a good practice even if you are not getting calls at work, because you will have a written record of the collection activity.

Annoying phone calls are just one of a host of credit card collection tactics debt collectors may try to get you to pay them. They will not care if the debt is really yours, or if the debt has passed the credit card collection statute of limitations for your state. You do not have to tolerate credit card collection harassment, you absolutely do not have to talk to collectors on the phone if you choose not to.

Get to know the credit card collection law and the consumer protections it provides. By becoming more informed about credit card debt collections you can protect yourself from unscrupulous collectors.

How to stop student loan wage garnishment” and “Fair debt collection practices act“.

How to stop student loan wage garnishment

Taking out a student loan is a common necessity for most young people going to a college or university. It is often the first time they take out a loan and are approved without having to show an ability to pay it back. Collateral is not required for these kinds of loans. The loan is backed by the government and is made in good faith as well as having a distinct ability to follow anyone for the rest of their lives and possibly garnish wages.

If loans were taken out and things did not work out as well as hoped, a possibility exists that the loans go delinquent. In this case the government backed loan holder will try to get payment by garnishing wages.

When a writ of garnishment is received, a smart thing to do is to contact the party who sent it and see if a payment plan can be worked out. This is possible although not guaranteed.

An attempt to reverse the garnishment is not common, but it is possible. Filing a “Claim of Exemption” form in the court that issued the garnishment is the step to take for this action.

The best route to take is to pay the garnishment off. Once the process is started, it must be resolved one way or another and if the money is available, simply pay it off and the garnishment will be stopped.

Another option is to allow the garnishment to run its course. It will continue until the full amount of the loan is paid off. This may be a hardship for the course of the payment process but will be complete one fine day.

When paying on any such loan or bill of any kind for that matter, always keep documentation of payments made. Make sure your records agree with the records of the party collecting the money. Ask for a payoff amount from time to time to compare records. When the bill is paid off, be sure to get a written receipt that the loan is paid in full.

Read, “If I file bankruptcy will they stop garnishing my wages” and “How to report bankruptcy fraud

How to report bankruptcy fraud

When an individual or a business goes through a bankruptcy, there is the temptation to hide assets in order to escape having to pay off creditors. This is such a concern that the Justice Department of the United States gives instructions on how to report someone who may be involved in bankruptcy fraud.

The first thing that is required is a written summary detailing the alleged event. This is to establish the time, place and exactly what happened. Written documentation is very important because it can establish the fraud in a court of law. It is much stronger than a simple accusation by one person who may have a personal grudge against someone else. A person who is owed money by a business going into bankruptcy may try to make trouble for the owners of the company by reporting that they are committing fraud.

  1. Write down is the name and address of the person or business to be reported.
  2. The name of the bankruptcy case, along with the number of the case and where it was filed. Include information to exactly identify the people or business involved so there is no doubt or confusion.
  3. Give information about the alleged fraud, when it took place and how this information was attained. Always submit supporting documents along with the report.
  4. Detail all of the assets being hidden by type and dollar value as well as the amount of unreported income and anything that was omitted or intentionally undervalued. Include your contact information including name, address, email address and telephone number. It is not a requirement to identify youself, but can be very helpful should the Justice Department decide to investigate the matter.

Making an accusation about bankruptcy fraud is a serious matter. It should only be considered if the facts are present to prove it. Being angry at someone for not paying their debts is no reason to falsely report them for this crime. The Justice Department will take your information seriously and will take the appropriate steps according to the documentation provided.

To report suspected bankruptcy fraud, please visit, “http://www.justice.gov/ust/eo/fraud/“.

Also read,
1. Avoiding Bankruptcy Fraud

What is bankruptcy fraud

What to Look for in Bankruptcy Fraud

Bankruptcy is a way for individuals and businesses to legally dispose of debt without having to pay all or only portion of that debt to the creditors because of insolvency. There are different types of bankruptcy. The type filed determines their stipulations and the conditions. Bankruptcy is an option that gives individuals and businesses an opportunity to start over financially when unforeseen circumstances develop such as extremely high and unexpected medical bills or businesses that have not been able to survive, financially, for some reason.

When filing a bankruptcy petition through the Court, the petitioner must give information in writing. This information includes many things such as a list of all of their debt and a list of all their assets. The Court goes by this information for the processing of the bankruptcy. It needs to be accurate. The petitioner needs to be honest.

Individuals and businesses need to pay close attention to whom they trust when they go to file bankruptcies. They need to have licensed professionals such as attorneys handling the process. Checking with the Better Business Bureau will help insure that the petitioners are dealing with a legitimate entity.

Bankruptcy is filed as a last resort to overcome financial burdens that are impossible to be resolved in any other manner. There are many who are willing to lie to keep what they can. Unfortunately, there are many scams out there for the honest and hard working.
According to Cornell University, bankruptcy fraud can occur when the petitioner tries to hide some of their assets or funds, submit or file their petition in many states or file false or incomplete statements. In other words, the petitioner purposely does not list certain assets that they own because they do not want to loose them to their creditors. They give them to someone for safe keeping. They might hide their unreported funds, possibly in an offshore account. If the petitioner files in more than one state, it will slow down the bankruptcy process and is usually done to hide their assets or funds. False or incomplete statements might be filed by a fake and so called financial advisor, who scams the petitioner out of monies that they have charged them for their services. This entity is called petition mills. By the time the petitioner realizes what has happened, they are in worse financial shape than before.

1. “Should I consider Pre bankruptcy credit counseling?
2. “What types of bankruptcy can an individual file?
3. “Can you file bankruptcy to stop wage garnishment?

Should I file bankruptcy now or wait

Given the currently financial climate in the U.S. today there are many people that have found themselves in a financial crisis the likes of which no one could have anticipated. Many people have been either, “laid off” or “downsized”. Now many families are faced with the questions like, “Can we afford groceries this month or should we keep the lights on?” And a large number of these people are seniors so the questions they ponder on are, “Can I get my medications this month and keep my lights on?” or “I will go ahead and get some food, keep my lights on and I will get my medicine next month.”

With the rising costs of day to day living and what income is coming in a lot of people have decided to file bankruptcy in Ohio. Although, a good number of people file bankruptcy in New Jersey as well, but the truth of the matter is that this final option is happening to people across the county. But exactly who will it work for?

Before you decide to file it’s best to speak with a bankruptcy attorney in order to way your options. Timing a bankruptcy filing wisely can have a significant impact on your future Bankruptcy will stick with your credit for 7-10 years. An attorney will also calculate your total income; match it up against your total debt. This is called a “means test”. This test is to ascertain whether or not the bankruptcy trustee of the court will even bother hearing your case to begin with. Your attorney my also suggest that you take in to consideration any future debt that you will or are about to incur. Sometimes it’s best to wait until you have exhausted all your financial and credit options and or responsibilities this way it can be included in your bankruptcy. The courts will look at your spending very carefully over a 6-10 month period to see is you are committing any fraudulent transactions. If the court feels as though you are they will not only throw your case out but they might in turn come after you for fraud.

The courts will look at 6 to 10 months of your financial statements very carefully to see if you have committed fraud in your means test. If the court feels as though you are they will not only throw your case out but they might in turn come after you for fraud.

For most people that have found themselves in these types of situations filing for bankruptcy has helped. It gave them an opportunity to get their lives back on track and learn to keep a close watch of how and what they spend. The age of living beyond your means is over. (Not that you should have been living that way in the first place.) However, for people most getting the chance to make life a bit less stressful makes of the difference in the world.

You should also read, “About chapter 7 bankruptcy exemptions” and “Does bankruptcy stop wage garnishment“.

Does bankruptcy stop wage garnishment

Wage Garnishment and Bankruptcy

In order to answer the question,” Does bankruptcy stop wage garnishment?” the simple answer is “yes.” However, it is important to note that in some instances, the stopping of the garnishment may be short-lived. Upon the filing of a bankruptcy petition, there is a provision of the bankruptcy code that goes into affect known as the “Automatic Stay.” The Automatic Stay is a court order that protects the debtor from all further collection activity, including wage garnishment.

That being said, the affect of bankruptcy on wage garnishment is truly dependant upon what the garnishment is for. While the Automatic Stay does protect the debtor initially from wage garnishment, such creditors as the Internal Revenue Service, child support recipients, and student loan creditors may file a motion with the court to have the stay lifted in order to continue with the garnishment. If and when approved, such creditors will be allowed to resume the garnishment.

IRS Wage Garnishment and Bankruptcy

While the filing of a bankruptcy petition will initially stop an IRS wage garnishment, it does not automatically mean the debt will be eliminated. The type of IRS debt, whether or not certain conditions are applicable, and the type of bankruptcy filed are determining factors. Typically, with a Chapter 7 bankruptcy, income tax debts may be discharged (eliminated). Taxes such as payroll taxes and trust fund taxes are not dischargeable in bankruptcy. However, the benefit to filing bankruptcy when large tax debts are owed is that interest and other fees will stop accruing.

It is important that debtors immediately notify their employers upon the filing of their bankruptcy petition. In addition, notification to those creditors who may be garnishing their wages should be sent right away as well. If, after the filing of a bankruptcy petition, a debtor’s wages are still garnished and said wages were properly exempted, the debtor may be entitled to a return of said monies. If the wages are not exempt, the bankruptcy trustee may file a motion to have them turned over to the estate for the benefit of all unsecured creditors.

Learn about, “Bankruptcy alternatives