What to Do About School Loan Garnishment?

Garnishment of your wages for nonpayment of student loans is more difficult to deal with than many other wage garnishments, since you can't bankrupt government-backed student loans the way you can credit card debt. Nevertheless, most people can quickly and easily stop the garnishment and set up affordable payment arrangements after a nine-month loan rehabilitation program. It is to your advantage to work with the creditor and arrange payment as soon as possible; waiting results in higher payments during the rehabilitation period and more of your wages being garnished, as well as income tax being seized.

Instructions

Interrupt the Garnishment

1

Gather all documentation relevant to your student loan and ability to pay, as well as contact info for your student loan administrator and the collection agency. This includes your last three years of tax returns, your last month's pay stub, and a detail of your monthly necessary bills. Especially note bills you would be unable to pay due to garnishment.

2

Contact the collection agency named on the garnishment forms and tell them you want to formally dispute the garnishment. Get a dispute or mediation office contact name and address from the customer service representative you speak to, and note the representative's name, as well as the date and time you called.

3

Contact the dispute or mediation office and explain your situation. Find out exactly what you need to send them in writing to get the garnishment stopped; this should be the data you gathered about your financial situation in Step 1. Send them this information in writing via postal mail, and send a copy via email as well if they provide you with an email address. Keep file copies of everything.

Rehabilitate Your Loan

4

Contact the person the collection agency sent you to for loan rehabilitation. Make arrangements to pay the loan. You must pay nine sequential nondiscounted loan payments on time in order to rehabilitate your loan. The amount of these payments will be equal to what you'd pay if you were making regular full loan payments on your loan. The amount named as a payment is non-negotiable.

5

Stick to your repayment schedule scrupulously, sending payments on time; early payments will not be counted, and late payments will cause your rehabilitation to start over. Stay in contact with the garnishment office as well, ensuring they receive all the paperwork necessary to remove the garnishment with proof of your good-faith repayments.

6

Call the student loan office about a week after you have made your ninth payment to arrange an affordable payment plan; the loan rehabilitation office will have all the contact information you need. If you are paying multiple student loans off, ask whether it would also be in your benefit to consolidate all your loans.

7

Maintain the payment plan you set up, keeping the student loan office current when you have any changes in your situation, in order to avoid falling back into default and garnishment.