Two defaulted federal loans purchased by ECMC, though they have now been shifting it back and forth between Allied, etc. They garnished a total of $4000 from my wages over the years, allegedly applying it to my loans, showing what percentage was being applied to fees and interest, and showing my total amount owed dropping slowly but steadily. Several years ago, without warning, declared that the $4000 had been “fees,” and reset the total amount owed to the original, pre-garnishing amount. In short they pocketed 100% of every penny garnished. I can understand pocketing an egregious percentage…but not 100%. There is no way I can possibly enter into a repayment agreement with a company like this. I would have absolutely no confidence they would keep their word and do anything but pocket whatever I voluntarily agree to pay.
How do I, at the very least, avoid wage garnishment?
Since these are federal student loans the loans are in collections and not purchased by an outside company.
There are two steps you can take, but I’ll let Chad Van Horn, an attorney in Florida, explain it. Chad said, “I’m sorry that you are going through this. Unfortunately I hear this story far to often. To be clear, ECMC and Allied are debt collectors licensed by the government. The garnishment of 15% is pursuant is allowed unless it causes “undue hardship” or you are successful in rehabbing the loan. What I would recommend is taking both paths, rehab and undue hardship. Unfortunately for the rehabilitation agreement you are going to have to work with ECMC. They are required to allow you this option and you will have to make a good faith payment (as low as $5) per month for 5 months and then the garnishment is released. For more immediate help you should request an undue hardship hearing. This must be made in writing and the garnishment will continue until a decision is made. This generally takes 4-6 weeks.”
And Chad offered exactly what I would have said. They key here is you’ve got to jump on both of these options as quickly as possible.