Private student loans have to go to court to garnish wages. Many defenses such as the statute of limitations can be raised to defeat their lawsuits.  But federal student loans have the right to start a garnishment without a going through the first step of filing a lawsuit and have statutes that avoid many defenses like the statute or limitations. The federal student lender still has to go through certain steps.   Some of the private collection agencies that attempt to collect for the federal lenders may misrepresent that they can garnish wages or attach property without due process whatsoever. That’s false and it’s a basis to sue them back for a violation of the Fair Debt Collection Practices Act. There is a process that must be followed in order to garnish your wages for a federal student loan.

Stop Federal Student Loan Wage Garnishments

Private lenders have to sue first to garnish wages and private lenders can be sued back for several reasons.   But even the Federal loans have limits.  Since 1996 the Debt Collection Improvement Act states the Department must mail a notice 30 days before garnishing wages.  The notice must include the nature, amount, and the intent to garnish wages.  This doesn’t guarantee you receive notice but they have to send it.

You have the right to:

  • inspect and copy their records;
  • make a repayment agreement instead; or
  • request a hearing about the existence, amount, or enforceability of the debt, rate of withholding, and whether employed less than twelve full months after losing a job.
  • The hearings may be telephonic or in person.

Any of these delay the process while you check out other options.  For instance you can perhaps file a Chapter 13 with just a minor 100 a month payment rather than lose 25% of your income.  Garnishment cannot not proceed until after the hearing if you request a hearing before the 13th day of getting notice. A Student loan garnishment is serious in one of my cases taxes took 25% of her income, state student loans another 20 federal another 20 for a total of 65% being taken.  After insurance almost nothing was left.  A simple 100 a month Chapter 13 cured the problem after 10 years she will simply apply for the Federal disability discharge of her debt.

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