Are you going to be garnished…..
Whether it was hardship or lack of concern that caused you to miss your initial payments, a student loan garnishment is a reality. Additionally, a loan garnishment can be quite detrimental to your monthly income. But how do you stop a loan garnishment once it has begun?
The difference in how you are able to stop a student loan garnishment lies in the type of loan it is. Federally backed student loan garnishments are quite different than those issued by private banks or lenders. If you do not know which category your loan falls under, be sure to look through your initial loan paperwork. (Also, some loans are issued by private banks but backed by the federal government. In this case, the student loan garnishment would be overseen by the federal government.)
Federally backed loans are generally overseen by the Department of Education. It is this department that initiates a federal student loan garnishment, whether through income taxes, your paycheck, or any Social Security benefits. While there is a limit on how much the government can garnish, this loss of income can definitely cause hardship on your family.
Generally, if you can prove to the Department of Education that this garnishment is causing any sort of negative hardship for your family, they can make different arrangements. This usually entails a monthly payment plan or some other sort of payment of the loan.
Loans that are funded through private financial lenders are a bit different when it comes to stopping a garnishment. In all cases, it takes a lawsuit and a court judgment in order to start a student loan garnishment for a privately backed loan. To stop a garnishment from a private lender, you need to talk to the lender directly. They can sometimes offer you a smaller payment plan, but if you default on that plan they can reinstate the garnishment.
Either way, a garnishment cannot be ignored. If this loss of wages is truly causing a financial hardship for your family – such as a pending home foreclosure, shut off of vital utilities, or repossession of your only vehicle – you can usually try to work out other arrangements with the lender. Short of a major hardship of this kind, you might not be able to get an adjustment on your loan garnishment. In all cases, a garnishment ends when the loan is paid completely in full. Now that you are empowered with more information, go out there and take action.
Visit www.Studentloans.gov to see if you qualify for an Income Based Repayment plan or to consolidate your loans with one lender for one monthly payment.