How to Stop Wage Garnishment
The US government and the private sector spend billions of dollars every year in issuing student loans so that a higher number of Americans can complete their college education. Unfortunately, not all of the students they have issued loans to can repay the loan once they graduate. In order to collect on the loan, the federal government or private lenders can resort to wage garnishing. If you’re in this unfortunate situation, then there are some ways on how you can stop the government or private lender from garnishing your wages.
First, you will need to understand that student loans need to be repaid promptly. There is nothing that can protect you against actions taken to collect on this type of loan. Bankruptcy laws in the US do not cover student loans thus nothing can protect our assets should your loan go into default.
Normally, loans will only go into a default status if payment on the loan has not been received within a period of 270 days. After that period and payment has still not been received the lender can resort to actions to collect on that loan and this includes wage garnishment.
The government can garnish up to 15% of your wages. However, you can have this stopped only if your wages fall below the minimum weekly federal wage.
Another way to stop wage garnishing is to get the loan back into repayment status. The federal government has rehabilitation programs that can help in returning your loan to a repayment status. You will however need to complete 9 consecutive payment schedules without any delays in payment. Should you miss one payment or even be delayed in one payment, you will need to start over.
Once the loan is out of default, wage garnishing or any other methods used to collect on the loan can be stopped.
Wage garnishing is a very difficult situation. The very reason why many people are unable to pay for loan is simply because their weekly income is just enough for living expenses. Wage garnishing takes away a considerable amount from your wages thus you will have more difficulty in making ends meet.
Many people with student loan payments end up taking two or more jobs just to have enough living expenses and pay for the loan at the same time.
If you have been delinquent in your loan payments, it would be best to do everything you can from defaulting on the loan. The lender does not need to file a lawsuit to collect on a student loan.
It would a good idea to seek advice or assistance the moment that you start being delinquent on your loan payments. If you have a loan with a private lending institution, talk to your lender and ask for more convenient payment terms. In some cases a lender may agree to work with you, but there have been cases where lenders have been less than accommodating.
The key to stopping wage garnishment is to get the loan out of default. If a private lender refuses to work with you on this, then you can seek advice from the Consumer Financial Protection Bureau (CFPB).