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

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