Wage Witholding?

[capricorn72]

What is the name of your state? Arizona

I am currently in default on a student loan I took out almost 3yrs ago in the amount of 8940.12. Today I recieved a letter from the loan company stating a "notice prior to wage witholding". Well, as you can imagine, this put a scare in me, and I am in the process of getting in touch with them to get on some kind of payment plan. The letter is basically saying that unless I get in touch w/them, they are going to start garnishing no less than 10% of every paycheck until the debt is paid. I understand they have a debt to collect, and I am slowly cleaning up the mess I made of my credit when I was younger, this one was just on the back burner. My question is...... can they do that, they have listed my current employer, and since I just got the letter today, I'm going to call the payroll department to find out if anything has been put into motion, I don't even know If I would be notified. Any advice would be appreciated. Thanks

 

[Skylyn]

Of course they can do that. It is called AWG (administrative Wage Garnishment). I'd adjust your withholdings on your W2 as well because they will also take any federal tax returns you may have coming...

You have 2 options:

1. A student loan consolidation will take the loan out of default, after a few timely payments, and thus, stop the AWG. This can be done quickly, however, the collection fees will remain and the default notation will still appear on your credit reports.

2. Student Loan Rehab. By requesting this, you can enter a year-long payment program that will, after completed, "rehab" your loan and will also remove most collection fees and the default notation from your credit reports. You need to demand this (if this is what you want to do). Do not make a single late payment once you start as this will stop the rehab.

Good luck!

 

[klhofbauer]

What is the name of your state? Arizona

I am currently in default on a student loan I took out almost 3yrs ago in the amount of 8940.12. Today I recieved a letter from the loan company stating a "notice prior to wage witholding". Well, as you can imagine, this put a scare in me, and I am in the process of getting in touch with them to get on some kind of payment plan. The letter is basically saying that unless I get in touch w/them, they are going to start garnishing no less than 10% of every paycheck until the debt is paid. I understand they have a debt to collect, and I am slowly cleaning up the mess I made of my credit when I was younger, this one was just on the back burner. My question is...... can they do that, they have listed my current employer, and since I just got the letter today, I'm going to call the payroll department to find out if anything has been put into motion, I don't even know If I would be notified. Any advice would be appreciated. Thanks

Hi!

I don't know if this will help you or not. Both my husband and I had to put our school loans in deferrment due to unemployment.

The company that I had my loan with suggested that I apply to the US Dept. of Education "William D Ford" repayment program. So I got myself enrolled in this. I ended up calling my husband's loan place and asked them if he could also be enrolled in that program.

It's legit, it's part of the US Gov & Dept. of Education. They have several repayment plans, you can do Income Contingent Repayment plans, get deferred, forebearance, etc.

I would suggest that you contact your current holder of the loan and tell them that you wish to get on this program ASAP - or better yet, contact the US Dept. of Ed at the contact URL below and call them asking how you can get on their repayment program; then call the current loan holder letting them know you spoke to these folks. Every person I've spoken to there has been extremely helpful, never rude or degrading or threatening. They walk you through the entire process. The only thing I don't like is that it is paperwork hell.

School loans rarely if ever go away... but at least these are manageable, the program works WITH your budget instead of against it, and the customer service are there to HELP you.

http://www.dlssonline.com/qctr/contact-us.asp