Experience with student loan wage garnishment?

[Jammed]

Anyone have experience in PA or with Discover student loans (private loan) and federal loans on how long it takes before they attach wages? Our Discover Student Loans are being sent to a collections agency and a big federal student loan is coming off deferment in a few months. Once the loans goes to a collections company how long does it take for attachment? And how much do they take for student loans - do they take what the original payment was - or do they take 15% or 25% of wages even if higher than the normal payment?

[treehugger1]

I am currently under wage garnishment for federal student loans. Interestingly enough, my student loan guarantee agency is out of PA (PHEA.) I live on the West Coast. The maximum SL garnishment is 15% of disposable income. The guarantor does not have to sue you or wait for a court/judge to issue judgment. The amount is 15% regardless of whether or not this exceeds your current payment amount.

For me, the garnishment went into effect about 400 days after I defaulted. This was after I had used up all possible deferment options. They could have started garnishment proceedings after 270 days, but for whatever reasons they did not. I had been calling the guarantor weekly, telling them I wanted them to garnish my wages. They finally "got it."

I'm not sure about how things work if you also have private student loans. I would assume that either they would get the 15% if first to garnish, or they would get the remaiing 10% after the public SL garnishment. Under federal law, the maximum garnishment from wages should be 25%, no matter who is garnishing your wages. You should also be aware that the 15% garnishment for SL's is good even in those states where garnishment is not allowed. (Fed laws trump state laws in this area.)

I have always stated that if you stop paying your debts, then you should be prepared for a 25% wage garnishment. If you can file a BK 7 and pick up your SL's within a few months, then you might want to consider the BK. You probably already know that SL's are like taxes; they do not disappear. Maybe they are worse than taxes, as SL's can not be forgiven in a BK.

[jacko]

The only consolation on Federal student loans is that they have a 25 year life. Any remaining balance is discharged. But under current statue, any remaining discharged balance is taxed. But Congress will most likely change that before the first 25th year approaches.

I am currently under wage garnishment for federal student loans. Interestingly enough, my student loan guarantee agency is out of PA (PHEA.) I live on the West Coast. The maximum SL garnishment is 15% of disposable income. The guarantor does not have to sue you or wait for a court/judge to issue judgment. The amount is 15% regardless of whether or not this exceeds your current payment amount.

For me, the garnishment went into effect about 400 days after I defaulted. This was after I had used up all possible deferment options. They could have started garnishment proceedings after 270 days, but for whatever reasons they did not. I had been calling the guarantor weekly, telling them I wanted them to garnish my wages. They finally "got it."

I'm not sure about how things work if you also have private student loans. I would assume that either they would get the 15% if first to garnish, or they would get the remaiing 10% after the public SL garnishment. Under federal law, the maximum garnishment from wages should be 25%, no matter who is garnishing your wages. You should also be aware that the 15% garnishment for SL's is good even in those states where garnishment is not allowed. (Fed laws trump state laws in this area.)

I have always stated that if you stop paying your debts, then you should be prepared for a 25% wage garnishment. If you can file a BK 7 and pick up your SL's within a few months, then you might want to consider the BK. You probably already know that SL's are like taxes; they do not disappear. Maybe they are worse than taxes, as SL's can not be forgiven in a BK.

[treehugger1]

My understanding of the 25 year deal is that you have to have been making your payments as agreed. This includes reduced hardship payments. It does not include garnishments as "payments."

[debtprison]

Definitely check out income based repayment.

http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp

[jacko]

That blows.. I am rethinking what Treehugger did. Strategically default. That can wait since I received my third forbearance due to not having employment.

Definitely check out income based repayment.

http://studentaid.ed.gov/PORTALSWebA...sh/IBRPlan.jsp

[GoingDown]

For the 25 year discharge plan, it must have been on the Income Contingent Repayment Plan for all those 25 years.

But if you are not making much money (somewhere near poverty) according to your federal tax returns, then your monthly payment under the plan will $0 per month, or close to it. And so, eventhough you are not paying them any money, the plan moves forward towards discharge at the 25 year point.

If you're a low income earner, the small monthly payments under the Income Contingent plan might be less than the 15% garnishment.

But if you're a high income earner, then the 15% garnishment will be less.

It will be taxable at that point, but if you are insolvent at that time (including the student loan balance at that time plus any other debts against your assets if you have any assets to determine your insolvency), then you would still end up paying nothing.

[debtprison]

That blows.. I am rethinking what Treehugger did. Strategically default. That can wait since I received my third forbearance due to not having employment.

IBR seems nice to me. If it were available 7 years ago I would have paid them zero and would have been 7 years into 25 years.

[fool4school]

For the private loans, you're probably screwed.

For the Federal loan, apply for a FOREBEARANCE before you default. It'll be one less headache to deal with for awhile.

[treehugger1]

In forebearance, the interest continues to accrue and this can add up quickly.

[jacko]

I'm locked in at around 3.25% interest.

In forebearance, the interest continues to accrue and this can add up quickly.

[treehugger1]

Mine are so old, they are locked in at 8.25%. LOL And, I've looked under every rock and stone. There is nothing that can be done. Many of us who went to college in the 80's through early 90's are stuck with whatever plan they had available.