topic Garnishment In Progress in Rebuilding Your Credit

Garnishment In Progress

donkort — Fri, 25 Sep 2009 22:39:04 GMT

Hello, everyone.

I'm writing for a friend. Approximately two months ago, the government began to garnish her wages owing to a defaulted student loan.

I know this will have a MAJOR effect upon her FICO score, to the point where she probably will not be able to obtain credit unless it is from a shady entity.

Basically, I wanted to know how long it would take for the garnishment to be deleted from her credit report--is it a certain time after they first garnish her check, or is it a certain time after the final garnish?

Thank you for any responses.

Re: Garnishment In Progress

donkort — Sat, 26 Sep 2009 02:18:10 GMT

Bump

Re: Garnishment In Progress

Anonymous — Sun, 27 Sep 2009 14:28:03 GMT

Hi Don!

Does your friend have a public record associated with the defaulted student loan, or is the loan guarantor listing as a collection account? The reason that I'm differentiating between the two is that the CRTP for a public record could begin from the "date paid" (depending upon the state, "unpaid" can report indefinitely), whereas a collection account CRTP would begin from the DoFD.

Re: Garnishment In Progress

donkort — Sun, 27 Sep 2009 15:53:08 GMT

Thanks for the response.

I'll have to convince my friend to obtain a copy of her credit report, so I could get the answer to your question, which is a pertinent one. I believe she's pretty naive about credit, credit scores, etc.

Re: Garnishment In Progress

Anonymous — Sun, 27 Sep 2009 20:14:57 GMT

donkort wrote:
Approximately two months ago, the government began to garnish her wages owing to a defaulted student loan.

I know this will have a MAJOR effect upon her FICO score,

Garnishments do NOT appear on credit reports, nor do they have any effect on FICOs. However, the "action" that causes them (judgments, liens, etc) DO appear on credit reports and DOES have any effect on FICOs.

Honestly, there's no way that she could have seen a garnishment on her CRs. Garnishments are considered "administrative actions" and are solely recorded withIN the action that caused the garnishment (meaning, she would be able to see the garnishment paperwork within her case file).

to the point where she probably will not be able to obtain credit unless it is from a shady entity.

That is NOT true. How old is this debt? The original one, I mean. Typically, it takes a few years for Unky Sam to begin garnishing wages for old student debt. But once they do ~ kaPOWie.

My point being that the original debt (the defaulted loan) might well have fallen off her CRs years ago. There is no way for her to know unless she gets copies of her CRs.

But honestly, Unky Sam is usually slow-pokey about garnishing ~ I've heard of cases where someone defaulted on a loan and then FIFTY years later, gets garnished for it.

Basically, I wanted to know how long it would take for the garnishment to be deleted from her credit report--is it a certain time after they first garnish her check, or is it a certain time after the final garnish?

Thank you for any responses.

The actual debt will fall off within 7 years ~ whether it's the original defaulted loan, a judgment, or what-have-you.

However, two things for you and she to bear in mind:

1) If this garnishment arose out of a judgment, most states allow judgments to be "renewed" at the 10 year mark (if unpaid in FULL). That, theoretically, could, plunk them right back on her CRs for another 7 years.

2) Student loans, if Federal, can rise again ~ they have a longer life cycle than other debts. They go into default -> Then the lender/servicer files a claim with the guarantor (now the person have TWO ugly CR entries on their CRs ~ one for the default and one for the claim -> That often equals 14 years of reporting. :/

Can you come back with more specifics?

Re: Garnishment In Progress

donkort — Mon, 28 Sep 2009 00:27:37 GMT

Thanks for the responses.

In order to obtain more specific information, I'll have to convince her to obtain her credit reports--she's somewhat naive about credit, credit scores, etc (as am I, to a certain degree).

I believe she has had her check garnished for approximately two months.