Someone told me that if you default on a student loan that the govt. does NOT have to take you to court to collect. That they can confiscate your bank assets, or securities or whatever in order to get their money.
this ddidn't seem right to me. Doesn't the govt still have to take you to court and prove that you are liable for that student loan. I mean, what happens if there had been any sort of mistake and they confiscated your $$ but had the name of the defaulter wrong.
I'm just wondering cause it seems civil rights are being violated left & right and I would have said 'no way' but after all these govt civil liberties abuses, I am not so sure anymore.
(I know they can garnish your wages--but I assume that that is after notification)
so.....does the gov't have to sue you in court to collect $$ from a defaulted student loan or can they just confiscate your accounts without warning?
2007-07-18 02:49:03 · 4 answers · asked by center of the universe 4 in Business & Finance ➔ Personal Finance
Please see the link below. All kinds of stories. They do take you to court first, then garnish. If the first judge is too lenient, they send out the Justice Dept. lawyers to appeal. (One case, the judge told a musician to give up his cat -- that was $20 a month).
Student Loans are immune from bankruptcy. You cannot have a 401k, or income tax refunds.
If they totally give up on collecting from you, supposedly, your loan is written off, the IRS considers that a windfall profit and THEY can come in the back door on any banking activity. Conjecture at that point that one loses all SSi retirement.
As Ralph Nader called Sallie Mae: "socialized risk, with privatized profits". Congress made Sallie Mae too strong. Sallie Mae makes astronomical profits and supports things like Republican candidates and Ann Coulter. Go figure.
2007-07-18 03:05:28 · answer #1 · answered by Anonymous · 1⤊ 0⤋
when my wife defaulted on her loans the government turned it over to a collection agency. they are allowed to bug the hell out of you being you owe the government and there is nothing you can do about it. also the government will confiscate any tax refunds you may have when you file your taxes. both state and Federal until its payed. also the interest keeps on adding up on the unpaid balance until its all payed.
2007-07-18 02:57:51 · answer #2 · answered by george 2 6 · 0⤊ 0⤋
They can and will take any income tax refunds that you may be entitled to, and they can levy your bank accounts (though they would do that as a last resort). Their preferred collection method seems to be taking the income tax refund (and they can take both federal and state).
2007-07-18 02:55:40 · answer #3 · answered by Anonymous · 0⤊ 0⤋
In this day and age, the government can do pretty much whatever it wants to. Yes, they can seize your assets for neglecting to pay
2007-07-18 02:54:18 · answer #4 · answered by maplewoodjoe 4 · 0⤊ 1⤋