From an expert in default student loan collection and I am here to shed some light on a not so favorable subject.

Today we will be talking about federal wage garnishment.

Many Americans are suffocating because of their student loan debt.
I will provide you with my insider knowledge on what you need to know about student loan wage garnishment. If your student loan fell into default you will face a wide variety of consequences.

[1] The FED will deny you additional student loan financing, meaning you won’t be able to get a loan for yourself or co-sign for someone else.

[2] you will no longer be able to defer your loan or place forbearances on your loan

[3] the FED will seize your tax return.

[4] and just as of recently they started taking state refunds as well.

[5] when you decide to retire or become injured and if your student loan is still outstanding they will take a portion of your Social Security benefits and other benefits.

[6] your credit will be destroyed and shattered.

[7] and on top of all of this they have the nerve to tack on 29.9% and fees and penalties.

[8] and if you let this linger long enough you will be sued in state or federal court and if that happens you will have to pay additional attorney fees and court costs.

[9] and it doesn’t end there the worst of it all there is no statute of limitations meaning that if you do not take care of the debt you will owe them forever.

The Results of a Default Student Loan.

The most annoying of the consequences will be the garnishment of your wages.

The garnishment of your wages could be quite devastating so we will talk about administrative wage garnishment

[AWG] what exactly is it? The DOE will deduct up to 15% of your disposable income meaning every bonus any commission [02:07] or any time you cash out on vacation pay or sick pay since the garnishment is a percentile amount they will deduct 15% of this.

The garnishment will happen every single pay period and if you do not have a method this will continue until 100% of the balance is satisfied meaning your loan will remain with the collection agency.

While this is all happening your interest percentage will remain elevated and through the garnishment you will pay collection fees in full. The sad thing is that if you paid voluntarily you would have waved these fees.

So you are probably wondering “how does my money get applied?” or “how does the garnishment work?” Just for demonstration sake let’s say your monthly income after taxes comes out to $1800.00; you will be garnished $270.00; that’s almost like a car payment without the car. And I am sorry but it gets worse. 80% of that goes towards interest only and 20% will go towards the collection fee. So that’s $216.00 being applied to the interest and $64.00 will be applied towards the collection fees; this means that you are not putting one cent towards your principle.

Before we find a solution for a default student loan we will have to assess the situation carefully.

What is your account status?

[1] Garnishment notification; [2] Pre-Garnishment status or [3] Garnishment status

[1] Garnishment notification; if your account is in this status this is right before the garnishment is finalized. You probably received the not so courteous courtesy phone call. If you account has been status in this manner my suggestion to you would be to call them and notify them of your full intentions your must clearly state “I would like to voluntarily resolve this matter”

But let me ask you something. Do you think the collection agency will sway their votes in your favor?

I didn’t think so.

So to make this formal call the DOE customer service line at 800-621-3115. And you best bet is to get this documented. Make sure you mention to them that you would like to voluntarily resolve this matter.

Once you have done this the Customer service rep will transfer you right back to the collection agency and when that happens you will have to establish a formal arrangement immediately in order to sidestep this garnishment situation.

But just as a side note the funny thing is this 800 number (DOE customer service line) is also a contracted company just like the collection agency.

We will examine the status number 2 of the of default student loan.

[2] Pre-Garnishment status; if your account is in this status you probably received a letter with an offer which will expire in 30 days. If this is the case follow the instructions carefully. If you contact them they will probably tell you that you have no options. They are feeding you a bunch of BS; if your 30 days are not expired the DOE will allow you to surrender 15% of your income voluntarily; if 15% is financially impossible you can follow the instructions on the letter and prove your financial hardship through a financial evaluation. Now if you lost your letter you can go to ed.gov and try to [5:53] look for it there or go to my website and click on the hyperlink.

[3] The third and final status would be the dreaded Garnishment status; This means that wage garnishment is locked in and they either started the deduction or your employer received the order. With this status they will tell you that there are absolutely no options which is completely false. If a garnishment [6:24] will cause a financial hardship to you or your family it is never too late to file for the hardship evaluation and even if you failed to prove your hardship there are programs designed to put a stop to the garnishment.

To learn more about wage garnishment settlements, payment negotiation and so much more, please visit Sitemap

Related:

federal student, collection agencies, student aid, Department of Education, federal student loans

 

http://studentloan2.com  is here to show you how to legally cancel your student loans.

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