April 13, 2022
Chapter 7 Bankruptcy Lawyer
Many people who have gone through or graduated any sort of education beyond government mandated schooling has more than likely had to take out some form of a loan to pay for it. A chapter 7 Bankruptcy lawyer may be able to help you with wage garnishment matters.
Wage garnishment is when an individual has defaulted, or not made payments, the holder or the loan will garnish an employee’s wages directly out of their paycheck. Bankruptcy lawyer Carolyn Secor, P.A. can explain that this means they will take a percentage, usually about 15%, to help pay off his or her defaulted loan. This means that the lender will communicate to the employer and let them know that they will be directly withdrawing a portion of the employee’s wages.
With some federal student loans as PLUS or Stafford loans, the lender does not need to possess a legal judgement against the loaner to garnish his or her wages. For other lenders, they will need to initiate legal action in order to start the progress. However, on the bright side, wage garnishment is considered a last resort action, and can be avoided. Before the lender submits or starts the process of intent to garnish, the company will send out many forms of notification, through both electronic and physical mail, likely over a period of months, before initiating the process.
There are some ways to prevent your wages being garnished, even after receiving notice of intent:
- Discuss acceptable repayment terms with the Department of Education (DoE). In addition, the person should also pay the DoE for the first installment within 30 days of the notice was sent to the individual.
- Request a hearing in writing. Must also be postmarked within the 30 days of the notice being sent. If the individual is trying to request copies of documents, he or she must request a hearing as well, as it will not delay the order of garnishment.
- Provide any proof to challenge or invalidate the order. This could include an incorrect amount, legitimacy of the debt, claiming responsibility, status of financial hardship, or even the existence of the debt itself.
- Initiate any and all legal action against an individual’s employer if there is any disciplinary retaliation against the individual based on the upcoming garnishment notice.
Furthermore, if you are already having to pay or are repaying due to student loans, there are still a few ways to help escape default status and end the wage garnishment:
- Consolidating loans. This is one of the quickest ways to get out of default, although it has a high risk as well. When you consolidate a loan, you essentially take out one large, single loan to pay off all of the defaulted loans. In doing so, your status is no longer in default, as it is a new loan. Using this option can make it easier to escape default status, however, depending on the consolidation loan itself, it may be more expensive in the long run due to the interest rate and if you are able to pay off that loan effectively.
- Rehabilitating loans. This process will have you commit to making a minimum of nine out of ten monthly payments. Afterwards, you will speak with a loan servicer to decide on a payment plan from there.
- Paying off the debt – completely. While this sounds impossible, it is one of the safest and possibly one of the quickest ways to get out of default.
If you have any questions regarding student loan wage garnishment and how it may be affecting you, contact an attorney to discuss information as well as any possible next steps. A chapter 7 bankruptcy lawyer may be able to help you with your wage garnishment matters.