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Financial Disaster Strikes as Student Loans Enter Repayment Phase: Default and Garnishment Penalties

Charleston 6/30/2015 07:13 PM GMT (TransWorldNews)

After a grace period, which generally lasts about six months after graduation, student loan borrowers begin receiving payment demands. Many student loan borrowers are simply unprepared to pay over half of their paychecks towards their heaping piles of student loan debt. Borrowers who are unable to meet the repayment demands find themselves in default and facing severe consequences. Arguably, the most painful of default consequences is garnishment. Garnishment occurs when the federal government seizes money from the borrower in default to recoup on outstanding debt. There are several different types of garnishment that can occur when a borrower falls behind on his or her student loan payments.

Wage garnishment allows the government to seize up to twenty-five percent (25%) of an individual’s paychecks. The government may initiate wage garnishment without a hearing. The government simply gets a court order that orders the borrower’s employer to withhold the amount from the borrower’s paychecks and immediately send it to the government to repay on the student loan account in default. The employer must comply with the government’s orders or the employer faces severe legal consequences, including being held in contempt of court.

Additionally, tax garnishment allows the government to withhold either a portion of or an entire tax return owed to either the default borrower or the default borrower’s spouse to collect on a default student loan account. Many borrowers took out loans with their parents or grandparents as a co-signer. If the borrower becomes in default, the government may enforce Social Security garnishment against any default borrower or the co-signer of a student loan that is in default. Social Security garnishment allows the loan servicer to seize a portion of the Social Security checks to apply towards the student loan account.

Borrowers or co-signers who are currently being garnished in any form for a default student loan account should seek help immediately. Garnishment may be stopped with the help of an attorney from Student Loan Law Group. Student Loan Law Group’s attorneys vigorously fight for borrowers’ and co-signers’ rights in court to end garnishment.

For more information, contact Student Loan Law Group today at 888-843-1706888-843-1706 Toll Free.

info@studentloanlawgroup.com
studentloanlawgroup.com/garnishment-due-to-student-loans/

 

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