New Garnishment

[treehugger1]

The attorney upstate finally filed a writ of garnishment for wages on behalf of capi1. I did everything I could to encourage them to get the wage garnishment in place before the 15% student loan garnishment went into effect. They failed. Now, they are only allowed the additional 10% and have to renew their writs every 90 days.

Since the legal firm has some questionable background, I completed the challenge to garnishment form related to any assets, vehicles, and all other exemptions allowed under Oregon law. I'll send this to them return-receipt mail. I'll also file my response with the case file at the courthouse.

Their 10% garnishment is not going to pay off the $6K of judgment any time soon.

[catleg]

Just wondering if you have bumped up your tax withholding to reduce their take (either one, the 15% student loan or the 10% judgment). I assume they have no way to garnish your federal tax refund? As we get closer to the end of the year that would seem like a good strategy. (As I recall a w-4 form allows you to specify an extra amount to be withheld).

[treehugger1]

Catleg, Yes, Thanks. In fact, by increasing the amount taken by the feds, this increases the amount the SL's get because of the setoff. Now, the student loans do have to wait until I have paid off my IRS debt (about 12 months.) In terms of other unsecured, they get the least amount of garnished wages. I know this all sounds strange to some folks, but it still beats what my alternative would have been under BK 13.

[catleg]

Are you saying the SL's have a right of setoff against your tax refund? Yecch.

[Nicollette]

I know of a couple of people that had their tax refund taken because they defaulted on student loans.

[treehugger1]

Yes, I received documents from the guarantor showing they had applied for the setoff. As mentioned in the past, I made my choice between a BK 13 and a very informal approach to my debts. The setoffs don't bother me as they are applied to debt that cannot be forgiven (SL's) and must be repaid. SL's can also attach to social security upon retirement. I can't remember the percentage. I would say that most gurantor's of SL's are now making use of all tools available to them for recovering the debt. There could be many surprised baby boomers who will retire in the future.

It is posible that the feds will do something about SL's and BK in the future. All I really needed was for my SL's to be considered a priority unsecured debt under the BK laws. If others would write their legislators and suggest that SL's be given priority in BK, then it might happen someday in the future.