The Truth about Student Loan Wage Garnishment

student loan default wage garnishment

Not keeping up with your student loan payments and going into default can have serious consequences, including student loan wage garnishment. Nobody wants their hard-earned wages taken from them, but it can — and does — happen to people every day.

It’s important to recognize that student loan default wage garnishment is usually the last resort for lenders. Typically, student loan wage garnishment is a creditor’s last choice option and they will work to avoid it at all costs. They will let you know when your payments are past due and give you plenty of warnings before your loans end up in default – so if you are in default, you likely know about it already.

However, if you do miss multiple payments, you can expect creditors to take aggressive action to get their money back – even if it means the drastic measure of garnishing your wages.

Let’s start with the basics to help you understand a little more about the ins and outs of defaulting on student loans and the student loan default wage garnishment process.

What is Student Loan Wage Garnishment?

Student loan wage garnishment is generally a last step creditors take to attempt to get their money back. Wage garnishment is the process in which the creditor or loan provider (in many student loan cases, the federal government) owed a debt gets paid a portion of an employee’s income directly from their employer in order to pay off their delinquent balances. Garnishments can apply to many different types of debt, including delinquent student loans. If you are wondering about the impact of filing bankruptcy on student loans, please see this post. 

In the past, there have been limited solutions to this issue. However, there’s a new and exciting approach for those struggling with student loan debt, which may be available if you qualify. The new program can apply to most student loans, even if you are already in default.

If you do qualify, this program is different from any other available – read on to find out how.

First…Watch this Video about the Challenge of Student Loans in America

Types of Loans & the Impact on Student Loan Wage Garnishment

When it comes to student loans, there are generally two types: federal government student loans and those from private lenders.

The student loan process is complex and can be confusing for most borrowers. Believe it or not, it is sometimes difficult to determine whether your student loan is federal or private. Part of the reason for this confusion is that it is not at all uncommon for the same lenders to be involved in handling both types of loans.

Federal Student Loans: Federal student loans, which include Stafford and Perkins loans, are guaranteed by the federal government which means it can be a little easier for them to garnish your wages when you’re in default. In the case your student loans are through the federal government, you should know that the government does not need permission, such as a court order or judgment in order to garnish your wages.

The Consumer Credit Protection Act (CCPA) establishes federal garnishment laws, however, state garnishment laws also apply and can significantly vary.

Private Lender Student Loans: Unlike federal student loans, private student lenders are legally required to have a court order to garnish wages. That means that, in cases of private student lenders seeking student loan default wage garnishment, creditors must first sue the delinquent party and take them to court in order to obtain a judgment to in order to garnish your bank account or wages.

Note in the previous paragraph on federal student loans, the federal government is not required to follow the same process in order to garnish wages for defaulting on federal student loans.

In the case of student loans through private lenders, the law requires that the lender exercise “due diligence” in their attempts to collect payment from a delinquent party before filing for a wage garnishment. That means that, before even getting to the step of wage garnishment, you will be made aware of the delinquent status as you’ll receive numerous bills, phone calls and, perhaps even being contacted by a collection agency before receiving a garnishment notice.

If you do receive a garnishment notice and you don’t object to the notice, it will be forwarded to your employer, who is required by law to comply and garnish your wages.

What if I’m Already in Default of My Student Loans?

Student loan default wage garnishment is not a situation that anyone wants to be in. It can be frustrating and, often, daunting as there hasn’t been an option like filing for bankruptcy to avoid student loan wage garnishment for those in default of student loan payments. That is, there hasn’t been an option – until now.

What’s the Solution to Student Loan Debt?

Attorney (and former Judge) Jed Shaw of Shaw Defense created a popular alternative to filing bankruptcy years ago, and has since helped people all across America with his unique approach.

But, how does that apply to student loan wage garnishment? With his extensive legal knowledge and experience, Shaw has developed a method to apply the same process to dealing with student loan debt.

It’s important you know that what we’re referring to is not student loan consolidation, not a refinance, not debt settlement and definitely not a so-called forgiveness program.

This may include both your private and federally subsidized student loans – but you must qualify for the option to be available to you.

Do Your Student Loans Qualify? Contact Shaw Defense

Call to schedule a free consultation with Shaw Defense to see if you qualify today. If we determine you qualify, the good news is that we can help stop wage garnishment on your defaulted student loans!

Contact us today to see if we can help you resolve your student loan situation.

Call 888-982-8609

 

 

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