How to Stop a Student Loan Wage Agreement
If your student loan is in default or approaching default, your lender may issue a notice informing you your wages will be garnished. This means the lender will take a payment off the top of each of your paychecks, and you will not have an opportunity to spend the money in another way. Wage garnishment to repay student loans is bad for your credit, lowers your income, and may even result in extreme hardship for you. If you have received notice of wage garnishment, you can take action to resolve the problem before wages are taken from you.
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Things You'll Need
- Ability to repay debt OR
- Proof garnishment is unlawful or harmful to you
Instructions
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Make certain the garnishment notice is lawfully written. For federal student loans, you must receive a notice 30 days prior to any action. This standard gives you ample time to respond, and you can dispute the action in court if you were not fully notified.
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Negotiate a repayment plan. If you have enough income to repay your student debts according to a different schedule than the original, your lender may be willing to negotiate with you directly rather than garnishing your wages. Typically, this agreement must be in writing within 30 days of the day the wage garnishment notice was sent in order to stop garnishment.
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Submit a request for a hearing in writing. If you are disputing garnishment against a federal student loan, you may use the US Department of Education's Hearing Request Form. Otherwise, model your request after this form and submit it directly to your lender. You may consider speaking to an attorney if there is any confusion on this step. Save a copy of the request for yourself, and send it certified mail so you can be certain of its receipt.
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Provide documentation showing any objection you have to the garnishment. Objections may include a dispute of the amount or penalties, and they may also involve your inability to reasonably meet your financial obligations if your wages are garnished. In this latter case, you must fill out a Claim of Exemption and Financial Declaration according to the laws of your state. This document shows your income, current financial obligations and hardships that would result if you had your wages garnished.
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Pay your attorney fees and court fees. These are your responsibility, regardless of the outcome of the trial. If you are fearful you cannot afford these fees, you may consider representing yourself in small claims court, but you will still need to provide the court fees which can be in excess of several hundred dollars.
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Tips & Warnings
Your employer cannot take action against you in response to wage garnishment. The lender only has the right to supply your employer with very basic information about garnishment, not about your circumstances. If this has been violated or your employer takes action against you as a result of the notice of garnishment, you have a right to initiate legal action.
References
Resources
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