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Here’s What Needs To Happen Before A Federal Student Loan Wage Garnishment Can Take Effect

Your wages can be garnished for failure to pay your federal student loans, but that doesn’t mean you have no rights.

You probably know someone’s got to take you to court before they can garnish your wages. You may or may not know that when it comes to federal student loans in default, the government has the right to start a garnishment without a lawsuit.

In fact, if you’ve been contacted by a debt collector about a defaulted federal student loan they may have said that they can start the process without any legal action whatsoever. That’s not only incorrect, but it may be a violation of the Fair Debt Collection Practices Act.

As with anything else, there’s a process that must be followed.  If the pieces aren’t put together, there can be no garnishment.

Federal Student Loan Wage Garnishment Notice

Under the The Debt Collection Improvement Act of 1996, the U.S. Department of Education must mail you written notice at least 30 days before it begins to garnish your wages. You’ve got to be told about the nature and amount of the debt, as well as the fact that the agency intends to initiate garnishment.

In addition, the notice must states that you have the right to:

  • inspect and copy records;
  • enter into a repayment agreement; and
  • request a hearing about the existence, amount, or current enforceability of the debt, the rate of withholding, and whether you have been continuously employed less than twelve months after an involuntary separation from employment.

What To Do If You Receive A Garnishment Notice

If you request a hearing on or before the thirtieth day following notice of garnishment, the garnishment
cannot not proceed until after the hearing. You can still ask for a hearing once it begins, but that won’t stop the wheels from turning.

Want a hearing but don’t have the ability to get to the student lender’s office? No problem. The “Request for Hearing” form allows you to choose between a written record, in-person hearing, or telephone hearing.

Protecting Yourself Is Crucial

For lots of my student loan clients, the garnishment is financially devastating. Every dollar of their income is accounted for, and the loss of any money can mean the difference between food on their table and going hungry. That’s why it’s important to protect your rights.

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By |July 3rd, 2012|

About the Author:

I’ve been a consumer protection lawyer since 1995, working to help people end their bill problems. I’m a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.

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