topic Re: Garnishment question in Rebuilding Your Credit

Garnishment question

llecs — Wed, 23 Sep 2009 14:31:54 GMT

I've got a question for you guys. I'm an employer and received a phone call from "651-221-0566" listed as "EDU CREDIT MGMT" on the caller ID here at the office. The person on the other end initially was nice and said he needed to verify employment for an employee of ours. It seemed fishy and without allowing him to disclose the employee's name I told him we had a strict privacy policy.

Anyway, his tone turned a little more harsh when he said that he's enforcing a garnishment against our employee on a federally backed student loan. I then said that we comply with all court-provided garnishment orders. He interjected saying that a garnishment order was not necessary on a federal student loan. I retorted that he does need an order and that we won't garnish any wages until the order was provided. He then put me on hold without saying anything and I hung up.

Googling the number produced a student loan-type company called ECMC. They do have a CA division which is likely the source of this call. Question: can a student loan company garnish wages without a court order? I didn't see how it was possible seeing that I won't take any money out of any employee's paycheck without that order.

Re: Garnishment question

Anonymous — Wed, 23 Sep 2009 14:37:40 GMT

No, they can not. A judgment has to be won then a garnishment order. Does not matter whether it is federal or not.

The only thing they can do is notify the Department of Education who in turn will notify the IRS and they can offset your Federal Income Tax.

Re: Garnishment question

llecs — Wed, 23 Sep 2009 14:43:55 GMT

Thanks guiness56. I thought as such and figured that it was an underhanded tactic by the CA. Though the federal issue had me second-guessing. I guess in the CA's eyes, the 4th amendment doesn't matter. I guess he expected me to take the money out and mail it.

ETA...I hope he calls back.

Message Edited by llecs on 09-23-2009 10:43 AM

Re: Garnishment question

Anonymous — Wed, 23 Sep 2009 14:44:44 GMT

The government rarely will file a lawsuit because they have different avenues to use. But they can do it.

Re: Garnishment question

Anonymous — Wed, 23 Sep 2009 15:08:53 GMT

I would REALLY check on this - I defaulted on Federal Student Loans about 13 years ago - and they successfully garnished my wages (I work at one of the largest universities in the nation). They had all the documentation that they needed in order to do so, and they continuted the garnishment until every last penny was paid...

***********************************************************************
800FICOwannabe

07/01/09 - FICO scores: EQ - 696, TU - 622 (Asset Acceptance reinserted as a new collection)
06/01/09 - FICO scores: EQ - 637, TU - 641
05/04/09 - FICO scores: EQ - 660, TU - 647
04/21/09 - FICO scores: EQ - 711, TU - 642
09/09/08 - Mortgage Enhanced: EQ - 607, EX - 556, TU - 534

Re: Garnishment question

llecs — Wed, 23 Sep 2009 15:12:39 GMT

800FICOwannabe wrote:
I would REALLY check on this - I defaulted on Federal Student Loans about 13 years ago - and they successfully garnished my wages (I work at one of the largest universities in the nation). They had all the documentation that they needed in order to do so, and they continuted the garnishment until every last penny was paid...

What type of documentation was needed in your example? It would have to be a court-issued order, right? In other words, I can't call the employer and say "cut so-and-so's paycheck and give me part of it", right?

Re: Garnishment question

Anonymous — Wed, 23 Sep 2009 15:14:49 GMT

This was so long ago, I have access to it any longer, but I do specifically remember that my employer had received a court order to garnish my wages (I only owed about 3K) and they did so. When I mentioned that I worked for a large university, I was implying that they wouldn't take this action without all of the required documentation.

Re: Garnishment question

Anonymous — Wed, 23 Sep 2009 15:16:07 GMT

I meant to say that I "don't" have access to it any longer!

Re: Garnishment question

llecs — Wed, 23 Sep 2009 15:17:43 GMT

800FICOwannabe wrote:
This was so long ago, I have access to it any longer, but I do specifically remember that my employer had received a court order to garnish my wages (I only owed about 3K) and they did so. When I mentioned that I worked for a large university, I was implying that they wouldn't take this action without all of the required documentation.

But that's a court order. In my case, the CA that called is saying that a court order wasn't necessary, that they have a right to take anyone's wages at any time.

Re: Garnishment question

angie204 — Wed, 23 Sep 2009 16:01:35 GMT

Can't you just tell the guy, "please send all correspondence regarding this matter to the following address..." then wait?

We don't pay any garnishments without documentation.

Re: Garnishment question

johnsj21 — Wed, 23 Sep 2009 18:16:54 GMT

DH had a SL through Great Lakes Highter Education Corp and when he filed BK 13 back in 10/2005 his loan was transferred to ECMC. Now that his BK is discharged we have to pay the remainder of what was owed to ECMC. Sounds like I better pay that $114.80 that DH owes them for the remainder of loan...just got the bill last week.

Yes..they must have a court order.

Re: Garnishment question

llecs — Wed, 23 Sep 2009 20:22:34 GMT

angie204 wrote:
Can't you just tell the guy, "please send all correspondence regarding this matter to the following address..." then wait?

We don't pay any garnishments without documentation.

I considered telling him that to pass the buck, but the last thing I want them to do is call over and over saying that we sent a demand letter for you to forward the wages of so and so, and "why haven't you done that?". I'd rather stop it now, so I told them we wouldn't do anything without a court order, and that's when he got flustered and put me on hold...

Re: Garnishment question

Anonymous — Thu, 24 Sep 2009 06:44:22 GMT

@Anonymous wrote:
I would REALLY check on this - I defaulted on Federal Student Loans about 13 years ago - and they successfully garnished my wages (I work at one of the largest universities in the nation). They had all the documentation that they needed in order to do so, and they continuted the garnishment until every last penny was paid...

***********************************************************************
800FICOwannabe

07/01/09 - FICO scores: EQ - 696, TU - 622 (Asset Acceptance reinserted as a new collection)
06/01/09 - FICO scores: EQ - 637, TU - 641
05/04/09 - FICO scores: EQ - 660, TU - 647
04/21/09 - FICO scores: EQ - 711, TU - 642
09/09/08 - Mortgage Enhanced: EQ - 607, EX - 556, TU - 534

Yes, they can garnish your wages and will. But, they need a court order to do so.

Re: Garnishment question

llecs — Mon, 12 Oct 2009 17:53:16 GMT

Well...they called back today. "Greg" was adamant again that a court order wasn't needed. He caught me off guard. Funny....he asked for my address by which to send a wage demand letter. He then said if I didn't forward the wages, then he can sue my business.

I might as well **bleep** this in the bud and start recording everything.

BTW, the company is Educational Credit Management.

Funny...n i p is censored.

Message Edited by llecs on 10-12-2009 01:53 PM

Re: Garnishment question

Anonymous — Mon, 12 Oct 2009 23:28:23 GMT

You're a good boss to make them document.

But I think that defaults on federal student loans can be garnished without the judgment--there's been some discussion of this over on the student loan board. I assumed that without a judgment, the only way would be that the borrower consented to this when they signed the promissory note.

Without any personal knowledge, not wanting to push my luck with the feds, I am very curious how this plays out. I hope you'll update us as their documentation comes in . . .

Re: Garnishment question

LIGHTNIN — Tue, 13 Oct 2009 00:22:44 GMT

The Higher Education Act, (P.L 102-164; 20 U.S.C. § 1095a) authorizes ED as well as student loan quaranty agencies to collect defaulted Federally-financed student loans by means of an administrative order to the employer, and without the need for a court order. This order requires the employer to withhold and pay over to ED or the guarantor up to 15% of the debtor's disposable pay. This Federal law supersedes any state law governing wage garnishment.

i found this at http://www.ed.gov/offices/OSFAP/DCS/awg.employers.guide.html

They have a whole section on Administrative Wage Garnishment - A Guide For Employers

Hope this helps

Re: Garnishment question

llecs — Tue, 13 Oct 2009 00:32:26 GMT

*grabs an iced cold energy drink*

Thanks....got some reading to do.

Re: Garnishment question

Underh20 — Tue, 13 Oct 2009 05:55:46 GMT

@LIGHTNIN wrote:
The Higher Education Act, (P.L 102-164; 20 U.S.C. § 1095a) authorizes ED as well as student loan quaranty agencies to collect defaulted Federally-financed student loans by means of an administrative order to the employer, and without the need for a court order. This order requires the employer to withhold and pay over to ED or the guarantor up to 15% of the debtor's disposable pay. This Federal law supersedes any state law governing wage garnishment.

i found this at http://www.ed.gov/offices/OSFAP/DCS/awg.employers.guide.html

They have a whole section on Administrative Wage Garnishment - A Guide For Employers

Hope this helps

True.

There are a variety of different student loan types and each one has different criteria for enforcement. It pays to check carefully.

Your traditional federally backed student loan can use collection methods similar to those used to collect child support -- garnishment of wages by administrative process subject to due process (alas, after the fact) for the garnishee.