I graduated college 10 years ago. To be honest I went to one school for a few years and got kicked out for grades. I then took a few years off but then went back to school and got my Associates Degree. Now that I am in my 30’s I finally want to get my act together by going back to school and getting a Bachelor’s Degree to better my job situation. Luckily on-line school is affordable so I am not looking to take out loans.
My problem is that my check is being garnished almost $600 a month. This has been going on for a little while and it is a good and bad thing. Good I am paying the debt I owe, bad because I can’t afford my bills at times nor can I go back to school.
I have already rehabilitated and consolidated my loans but defaulted again hence the garnishment. Since I can only rehabilitate once in my life (I rehabilitate after 2008)- What can I do to stop garnishment or at least reduce the amount taken?
Any advice would be helpful
If you only have one garnishment then the maximum amount that can be garnished is 15% of you take-home pay.
You are correct, rehabilitation is a one time opportunity. The only three choices you really have to lessen the blow are to get your loan current, appeal the garnishment amount, or consider consumer bankruptcy to clear others debts you may be paying.
When you received the intent to notice it said you had 30 business days to request a hearing. In that hearing you could have made your case why the amount of the garnishment was too high and it may have been reduced. The Department of Education says you have, “An opportunity for a hearing to present and obtain a ruling on any objection that garnishment of 15% of the borrower’s disposable pay would produce an extreme financial hardship.”
But it looks like the window for that appeal has long passed.
So it might make sense to delay school for now, accelerate your payments to dispose of the garnishment as quickly as possible to get your loans current again.
Getting current has substantial benefits to you. For example, you will no longer be reported as delinquent on your credit report, and you would be eligible to participate in programs that could lower your monthly payment like the income driven repayment programs.
All of that being said, some people have been able to accidentally get approved for a new Direct Consolidation Loan and drag their delinquent loans into the new Direct Loan, bringing them current. Read this for more details on that.