my paycheck is being garnished for defaulted student loans?

Question

so i got my defaulted loans consolidated and the old loans were paid off with the consolidation but my check is still being garnished

Answer 1

It is Simple. Don't get mad, stuff happens.

1) Contact your payroll administrator. They may not be legally allowed to stop the deductions before they get notification from the paid off loan company, but they can rush it through as soon as it arrives.

2) Your payroll administrator may have already made the change in the computer system, but the software (or the person who entered it) messed up and for some reason it won't stop taking the deduction. The payroll admin. may have been too busy to notice that the change didn't process. (We have been having a similar problem with ADP lately, we've got a twice a month deduction for 1 employee, we used to be able to click on "inactive" on the off weeks, but that doesn't work any more, we have to click on something else.) Tell them your problem when you get to work, they will have to call the payroll company to stop the sending of this week's deduction to the loan company and also to correct the problem.

3) If the loan companies have not notified your employer yet, then politely call the loan company (you catch more flies with sugar than you do with vinegar). If the normal route/menu doesn't help you, be persistent. If you have to, speak with the loan company's telephone operator, she/he can connect you with the person that has the power to correct the problem, the brains to do it right and the caring attitude to get the job done post-haste. If you sound angry then you can end up on a wild goose chase. Make sure that you have a fax number and email address that can reach your payroll administrator, just in case the loan company is willing to fax/email the notice (of course followed up with a paper original in the mail).

4) Your paid off loan company will reimburse you for all of the excess money that they have received, it may take a while OR the first check may already be in the mail.

Answer 2

I am no lawyer, but the question has to be asked, where is the garnished money going. Is it to your current student loan, if so I would not hassle with it.

If not, then ask them to stop garnishment, if they ignore you or say no, get the evidence to prove your claims, and have a lawyer make a request with the court for a summary judgment to stop the process.

In either case, you need proof that the money is being used to pay down your loans, ask for a statement on your balance from time to time to make certain the money is be properly accounted for. If they are taking money they have no right to, then there should be some federal or state law against that type of theft.

Answer 3

b/c the loan still exist. All you did was switch a loan from one heading to another. Consolidation doesn't mean erase loan.

Answer 4

The Consequences of Student Loan Default

When the loan enters the default status, several consequences are connected to it. Some of them are mentioned below:

• The loans may be turned over to a collection agency.

• The borrower will be liable for all the costs associated with collecting the loan. This may even include the court costs as well as attorney fees.

• The borrower can be sued for the entire amount of the loan.

• The wages may be garnished.

• The federal and state income tax refunds may be intercepted.

• That federal government may withhold part of the Social Security benefit payments.

• On the credit record, the defaulted loans will be mentioned, making it difficult for the borrower to get an auto loan, mortgage and even credit cards. Note that having a bad credit record can harm your ability to find a job.

• The borrower’s chance to receive federal financial aid will now be impossible to happen until he repays the loan in full or make arrangements to repay what he already owe and make at least six consecutive, on time, monthly payments.

• Federal interest benefits will be denied.

Aside from the above mentioned consequences, there is also some other less-obvious consequences that are oftentimes omitted from consideration. One of those could be the rule that the federal student loan borrowers holding defaulted student loans are no longer entitled to any deferments or forbearances. Subsequently, there are some instances when the loan default may force the individual to consider or take a semester off. This must be taken due to his or her inability to qualify for federal student aid as well as to afford the cost of higher education independently.

What’s more, there is a great possibility for those borrowers who defaulted on their student loans to lose their professional licenses. For instance, the lawyers who possess defaulted loans may be subject to have their license to practice law disavowed. The doctors and certified public accountants would also fall into this category.

Lastly, the borrowers who just ignored summons for loan repayments will become liable for all fees associated with collecting the federally financed loan. This means that the borrowers will end up repaying their outstanding debt, plus up to 25 percent in contingent fees in order to satisfy the student loan debt. Note that this rule is actually consistent with the Higher Education Act as well as on the terms of most borrowers’ promissory notes.

The Collection Procedures Involved with Defaulted Student Loans
Most of the guaranty agencies’ stringent collection procedures have successfully deterred student loan neglect. One of the supports for this claim is the steady decrease and current all-time low of student loan default rates. However, although the collections department is highly committed to assisting those who are in default and making repayment as simple as possible, the non-response in the borrowers’ side still opens up to one or more of the following collection approaches:

• Garnishment of Administrative Wage: Under the Higher Education Act of 1965, the Department of Education as well as the state guaranty agencies may require employers who employ individuals with defaulted student loans to take away 10 to 15 percent of the debtor’s disposable income per pay period. The garnishment of the administrative wage is actually a resort taken only when the debtor refuses to voluntarily repay his or her defaulted debts and may persist until the total balance of the outstanding debt is paid back.

• Treasury Offset Payments: Aside from administrative wage garnishment, the Department of Education has the right to request the Treasury Department to perform a federal offset against the federal income tax refunds as a way of collecting defaulted student loan debt. To simply put, the borrowers with loans in default status may forgo any federal tax refunds until he or she has repaid the defaulted loan.

• Legal Action: Litigation can be pursued by the Department of Education as well as state guaranty agencies as a means for collecting the defaulted loans. It means that if the debtor refuses to repay the debt voluntarily, he or she is subject to prosecution in a state or federal district court. The borrower is therefore sued for the outstanding debt as well as for the attorney and court fees. But, these methods are usually considered as last resorts, thus need prior notice of the proposed offset.

Answer 5

Get set for a very long legal battle, dear.

Answer 6

That sucks

Answer 7

thats a difficult question you've asked

Answer 8

Why on Earth did you default in the first place?
Did you not think the goverment would come after their money they loaned you? duh