How to Stop Garnishment of Student Loans

Avoid wage garnishment by contacting the lender on time.

After leaving college or university, some students struggle to pay back their student loan. Defaulting on your student loan can result in the lender garnishing up to 15 percent of your wages to repay the debt. Once the garnishment has begun, it is difficult, though not impossible to stop it. The best way to handle the situation is to try to stop the garnishment before it begins.

Instructions

1. Contact the lender and set up a payment plan. Do this the moment you know you need help repaying the loan. The lender usually has many options available, which may include a repayment plan appropriate for your financial situation. You might also qualify for a deferment, which permits you to stop making loan payments temporarily. If you do not qualify for a deferment, you might be eligible for a forbearance, which temporarily stops your payments or prolongs the payment period.

2. Attempt to stop a garnishment by filing a hardship claim with the court that issued the garnishment. You can take this action if the garnishment has or has not begun. If you would like to challenge the garnishment or its amount, you can request a hearing within 30 days of receiving the notice. If you request the hearing thereafter, the garnishment will proceed, but you can stop it, if the court rules in your favor. If you file a hardship claim you must complete a financial disclosure statement detailing your income and expenses.

3. Payoff the student loan in one lump-sum payment, if you have the funds. This is the quickest way to stop the garnishment.

Tips & Warnings

• If you owe the money and it is not causing you undue hardship, you can let the garnishment continue until the debt is paid off.

• Speak with a debt management lawyer about filing bankruptcy if the garnishee is unwilling to work with you. Filing bankruptcy will stop collection activities on the student loan. Still, it does not erase the actual loan.

• Get documentation once you have paid off the debt.

• If you plan to use a credit card or borrow from family and/or friends to payoff the loan in full be careful of high interest fees and further indebtedness.

References

• Student Loan Borrower Assistance: Administrative Wage Garnishments
• Student Federal Aid: Repayment Information

Resources

• Financial Disclosure Statement