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Wage Garnishment - Credit Reporting question

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Duffie
New Visitor

Wage Garnishment - Credit Reporting question

HI everyone, I'm new here.

 

My husband had SEVERAL loans when he graduated years ago. He tried to get them consolidated at the beginning and for reasons we can't remember now, was told he could not consolidate the loans. (maybe some were private, perkins & also FFEL, or something like that)  Not totally sure of the history, however, the monthly amounts were too great to pay and thus, eventually the loans defaulted & he has been under wage garnishment for the past 5 years.

 

He's been at the same job for several years, and didn't mind the wage garnishment since it was paying the large debt down. On his credit, it showed the loans in collection, yet being paid on regularly. HIs credit score was 680, as all his other credit was excellent, and again, the loans were being reported as in collection, but being paid on time monthly.  Last year he tried to set up rehabilitation payments, but they wanted $900 a month for 9 months on top of the $1,500 they are already taking - just not financially feasible for us.

 

Well, he just found out that according to a credit report - the loans are delinquent since June of 2012, thus plunging his credit into the 500's.  The garnishment payments are STILL being made, and always have been without lapse (no job changes).

 

He contacted them to ask them if THEY still show the payments being made, since we know it's coming of his paychecks.  They said Yes.  He asked them why they are reporting NO payments made since June of 2012.  They have responded that they weren't required to report to the credit bureaus.

 

They WERE reporting before.....now they say they don't have to.  Does this sound right?  Can anyone advise?

 

Thank you, Duffie

Message 1 of 7
6 REPLIES 6
InvincibleSummer3
Established Contributor

Re: Wage Garnishment - Credit Reporting question

I can't comment on your garnishment question, but I will say this: there is no minumum for a rehabilitation, provided we're talking about federal loans.  Whoever said that they needed $900 extra a month is incorrect.

 

Is he just planning to let them continue garnishing until the loans are paid off? How much is the outstanding debt?

Message 2 of 7
Duffie
New Visitor

Re: Wage Garnishment - Credit Reporting question

No, he doesn't want to let them keep garnising at all.  He wants to rehabilitate - but the answer is always the same. This, seemingly to us, arbitrary figure of $900 monthly for 9 months, on top of the garnishment.  It's been 'garnished down to $41,000 (it was an expensive school).

 

They are a collection firm, I know that.

 

so there is NO minimum?  We just are lost and can't seem to get around this.  My loans were paid off 5 years ago, no issues, so never dealt with something like this.

 

If there's no minimum, we don't understand them not workig with us on this. He's tried several times over the last few years to get them to drop 'rehab' payments to a reasonable amount so we can get this done. The answer is always a firm no.

 

We're stuck. And,not sure why they are no longer submitting updates to the credit bureau at least showing that the garnishment payments are being made.

Message 3 of 7
InvincibleSummer3
Established Contributor

Re: Wage Garnishment - Credit Reporting question

Who's the collection agency, if I can ask?

 

There is no minimum, even on a large loan. Especially since the rehab would be on top of the garnishment. You have every right to rehab.

Message 4 of 7
Duffie
New Visitor

Re: Wage Garnishment - Credit Reporting question

Van Ru  (thnk that's the spelling)

Message 5 of 7
InvincibleSummer3
Established Contributor

Re: Wage Garnishment - Credit Reporting question

This might be helpful:

 

"Q: What if my lender won’t agree to a rehabilitation payment amount that I find reasonable and affordable?

A: The lender will probably say that minimum payments are required so that the lender can sell your loan at the end of the  rehabilitation period. Private collectors will almost always tell you this because they get paid a higher commission if they set up rehabilitation plans where borrowers pay certain minimum amounts. Despite what they tell you, you have the right to pay only what is reasonable and affordable. Although this is difficult, the best way to deal with this problem if it arises is to tell the lender that you are aware of your right to a reasonable and affordable payment plan and to keep pushing until they give it to you. You should be prepared to provide detailed documentation of your income and expenses. Most lenders will require you to use this form or something similar. If you still don’t get anywhere, you should try contacting the Department of Education ombudsman office or one of the guaranty agency ombudsman offices. If you still can’t get anywhere, you might consider contacting a lawyer."

 

http://www.studentloanborrowerassistance.org/default-and-delinquency/repayment-get-out-of-default/

 

I would lean on Van Ru some more.

Message 6 of 7
kjel
Established Contributor

Re: Wage Garnishment - Credit Reporting question

There is no minimum payment to rehab, the payment only has to be "reasonable". Given that your husband is already being garnished a significant amount, I would have him push back hard against Van Ru and submit any documentation he has regarding the wage garnishment. FWIW, my rehab payment was $50/month on nearly six figures of student loan debt. I'd offer up whatever you can afford, maybe $50-$100/month because they garnishment will not stop until the loans are out of default.

 

Once they are out of default and picked up by a new lender/servicer he will qualify for any number of repayment plans.

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