Federal student loans are NOT included in any bankruptcy, regardless of what your atty told you. You need to make minimum payments that unfortunatley are 'minimum' according to the CA, but can be prohibitive to you. Bottom line is either enter into repayment terms, or they WILL garnish-they did to me.
Alot of people think that unless they go to court, they can't garnish, but the fed student loan program is exempt. After a certain point they can and will garnish...even if they were sending all notices etc. to an address that is wrong, like they did me.
If you let the garnishment happen, here is what you can expect:
15% garnishment per pay check
-garnishment will continue until it is paid or you have entered into a payment plan and have made 3 monthes payments on time. And no, you can't pay 3 monthes in one lump sum, it has to be 1 time per month within X amount of days from the due date. So regardless of payment plan, you will be garnished for 3 monthes.
-Payment plan is usually $150.00+ per month on top of the garnishment!!
-They are very slow at removing the garnishment, don't expect it to come off right at the 3 month mark-you will make many, many calls to ensure they lift it. I ended up getting the National Student Loan Program rep conference called in to get it lifted. THEY WILL NOT LIFT IT UNLESS THEY ARE FORCED.
It was a nightmare-you absolutely do not want to go there....thankfully, I had the finances to deal with it, many people do not.
If I were you, I would do whatever you can to avoid this.
