Thursday, June 18, 2015

How to handle student loan wage garnishment?

How to handle student loan wage garnishment?






Problem: "I have a student loan on which I have defaulted. This account is now being handled by Allied Interstate who have already called my employer several times asking about my whereabouts. I have been ignoring the messages and have been waiting for a time when I can have enough money to repay the loan. Recently I got news from my employer that my wage will be garnished. I am in a fix as to what I should do in a situation like this. I know I have been trying to run away from this but now I feel trapped. Will all my earnings go towards the repayment of the loan? How come I got to know only from my employer? Is it legal for Allied to contact my employer?

-Lisa Peterson"

Solution: Yes, it is legal for Allied Interstate to contact your employer to inform about a wage garnishment. Ideally, this situation was inevitable since you do owe the loan and have not been paying on it. However, your employer must have received a letter from the sheriff mentioning the garnishment order.

In most states, before your wage can be garnished, the creditor or the collection agency must first send you a notice for garnishment containing the following information:





• A statement authorizing garnishment
• Notice of any potential exemptions
• Steps you may take to protest the garnishment

If you have not received any such document, you may send a letter of appeal to the collection agency. This may or may not work, but you may still try. Contact Allied Interstate and talk to a representative to find out if there is a way out of this garnishment.

Find out which court you need to appeal to. Once you get that information, you must prepare to let them know why the garnishment needs to stop. You must be able to prove a financial hardship. Have your income proof, your assets and your bills handy in such a situation. Get copies of recent pay stubs, cancelled checks, bank account statements as well as utility bills for the last few months, car loan payments and any other bills if necessary.

In case garnishment does take place, a certain portion of your wages will go towards paying off the loan and not your entire salary.

It is always better to try and stop a wage garnishment rather than revert it once there is already one. Never ignore calls from your creditors or collection agency. Try and work out a payment plan rather than running away from them.

Share:


About the Author
Jason Holmes
He is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven... 


No comments:

Post a Comment