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Will a Bankruptcy Filing Stop My SSI Wage Garnishment for Student Loans?

Question:

Dear Steve,

SSI BENEFITS ARE BEING GARNISHED FOR 30 YEAR STUDENT LOANS BY COLLECTION AGENCY THAT I CAN’T GET TO ANSWER THE PHONE OR RETURN A CALL –15%. THINKING ABOUT FILING CHAPTER 7 BK FOR HARDSHIP AS I’M RETIRED AND THIS IS HARDSHIP ON ME?

WILL A BK STOP THIS OUTRIGHT?

Omar

Answer:

Dear Omar,

So it sounds like this issue has been brewing for some time. A wage garnishment does not happen overnight. You can stop the wage garnishment by following these directions.

Alternatively, you can go for a student loan rehabilitation which can stop the garnishment and bring the loan current so you can get on an income-driven repayment plan with minimal payments.

While you might be able to eventually have your loans eliminated in a Chapter 7 bankruptcy you would have to file an additional Adversary Proceeding, which can be very expensive. Even then, there is no guarantee the loans will be discharged.

Sincerely,


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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