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Student loan Garnishment pending!

Valued Member

Student loan Garnishment pending!

My sister has a student loan garnishment of $12,000 pending.    Is there anyway place she can get a loan to pay this off?  A company that loans to people with poor credit and good income?   She has no late payments on her credit.    She is in the process of doing the Rehab thing but a garnishment is pending. Scared to death.   It hasnt' gone through because they have her maiden name and it keeps getting kicked back fromt he court.    She has credit scores of 550( I know...bad).  Income is $85,000.    She doesn't have any savings.      

The loan is from 1985!!!      Started out as $2500 and because she didn't take care of it...she's in this mess.    Letters to inform her of this pending garnishment were never gotten. She said she would have defintely gotten on top of it if she knew about it.  We think the letters must have been going to our childhood home address.   We no longer have access to that house; sold.  Or maybe they never contacted us.   This is a Federal Loan.       Any help would be appreciated.    

Message 1 of 5
4 REPLIES
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Frequent Contributor

Re: Student loan Garnishment pending!

Hi,
I just went through this with someone I know. I can only tell you what my experience was because this is new for me.
First, have her update all of her information with the collection agency. As this is a federal loan, there is no running away from it. You should also get the name and number of the person in charge of the case. For the person that I was helping, they also took days to process some of the paperwork... It wasn't until I asked them when it would be done a few days before garnishment that they expedited it. Maybe her CA can do this for the rehab process. I don't know what courts would be involved (do you mean Dept of Ed?) But it might be helpful to contact Dept of Education and see what they recommend for name changes. She's probably not the first this has happened to.

Knowing that you are having issues with the rehab, imo you need to buy time. Find out exact date the garnishment is (and when the last day you can do anything to stop it). The issues with the rehab coupled with the lack of notification (I would get from them a Faxed copy of the letter they sent out; it will have the wrong address = paper trail). In this letter, it also talks about the ability to appeal the garnishment. Let me know if you want a copy of that part. I think it's a generic form. You can appeal within 30 days to reduce or stop the garnishment. You can also appeal past 30 days and even after the garnishment if you can prove the delay was for good reason (hence there proof that you never got the letter, and the whatever paperwork you have that says they are having issues with the name). Even at $85k income, with the price of rent, the garnishment amount might also be more that she can live off of? I don't know if it will be enough. I personally would try. If she wins the appeal they will stop any garnishment and return funds taken out. Again, you are asking for more time, not to have the loan forgiven it anything.
Another thing is mine was deceptive; they imo purposely didn't say all the loans were up for rehab. If they aren't, they can rehab only those loans and go ahead with the garnishment on the rest!
Maybe she could get a loan... She had good income. She can also agree to a repayment agreement to pay what they would garnish (20% or something, I can't remember off the top of my head) and that will stop the garnishment from moving forward. This would again but more time to do rehab later.
The hardest thing to accept it the garnishment might just happen. It wouldn't make sense to, for example, get a cash advance just to pay this off. Once it starts, barring an appeal it won't stop until it gets paid off, so it's best to find some method to buy more time imo.
Hope this helps and feel free to ask questions.



Message 2 of 5
Valued Member

Re: Student loan Garnishment pending!

Thank you so much!!!!  So very very much for taking the time to answer.    I sent this info to my sister.  She has a phone interview with the Rehab people at 11:30 today.   I guess she should tell them her name change.   We were running from it thinking we could buy some time for the Rehab thing to go through.   She's so scared.  She has others loans that are in good shape and consolidated.  This one was the only one...she didn't know they had SOLD this loan and thats why it was not under the consolidation with the other loans.   Never got on piece of mail on this thing.  It's ONE loan that's up for garnishment, not the others.  She doens't even start paying the others until Feb.     They are in total order and not defaulted.

 

Thank you again.  I will keep you updated.      

Message 3 of 5
Frequent Contributor

Re: Student loan Garnishment pending!

No problem! Your sis is lucky to have you for asking. Did it get resolved with the appointment?
Yup, update name, address, phone number, everything.
There's nothing to be scared about. At worse if the garnishment, but she can't get fired for it and they can only take out that percentage. If she enters into the payment agreement for the same percentage, it will prevent the garnishment. Quickest method is e-check I think so she should make sure you'lll have the money for the payment in her account. That's very wierdhaving just ust that one loan left alome.
Good luck to you both!



Message 4 of 5
Frequent Contributor

Re: Student loan Garnishment pending!

I went throught this 4 years ago. 

 

My university was my loan servicer, and they had turned my defaulted loan over to a 3rd party collection agency.

 

I set up rehab with the collection agency, and afte making my 5th on-time rehab payment, I called them every day reminding them that they needed to stop garnishing my wages.  I was fortunate because the collection agency knew the law, and got it taken care of quickly.   

 

Remember, the law is on your side for federal loans that you're in the process of rehabbing. If you make your rehab payments on time, federal student loan servicers and the collection agencies they emply MUST comply with federal law regarding wage garnishment and credit reporting.  If they don't, make sure you document everything, and contact the CFPB and federal student loan ombudsman.  

800+ for all 3 CRAs.

Took 4 years after rehabbing a bunch of defaulted student loans, but totally worth it.
Message 5 of 5