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Federal Student Loan Collections

April 22, 2015

Federal student loans provide the government and their servicing agencies special tools to collect on defaulted student loans.   If you default on your Federal student loan, you can be subject to aggressive collection methods, including tax refund interception and wage garnishment. 

 

Prevent the government from taking more than their lawful share by enforcing your exemption rights and defenses to the underlying loan.  Contact a student loan attorney at JRQ & Associates to find out if you have grounds to contest a tax refund interception or wage garnishment.  Let an experienced student loan attorney do the negotiating for you and prevent your income and assets from being seized by the government.

 

Tax Refund Interception

 

  • Your tax refund can be intercepted and seized by the government for repayment on a defaulted Federal student loan

  • If you take the appropriate steps, you will be given the chance to enter into a repayment agreement and prevent the interception

  • The government must send notice of the interception, which can be delayed by filing a request for review within 65 days of the notice

  • Common grounds for contesting the interception include:

    • Debt has already been paid

    • Loan was forged

    • School did not issue a refund

    • School closed while pursuing degree

    • Loan has been discharged in bankruptcy (read more here)

 

Wage & Benefit Garnishment

 

  • Unlike private lenders, the Federal government can garnish up to 15% of your disposable pay without obtaining a court judgment. (Click here for more on court ordered judgments)

  • You will always have the option of contesting the garnishment by requesting a hearing or by sending in a written objection

  • You should request a hearing within 30 days to prevent the garnishment from automatically occurring, however, you can still request a hearing after this 30 day period

  • Common grounds for contesting a garnishment include:

    • All or part of your earnings are exempt under Federal or state law

    • Debt has already been paid

    • You are currently paying under a repayment agreement

    • Loan has been discharged in bankruptcy (read more here)

  • Some Federal benefits, such as supplemental Social Security, are exempt from garnishment

  • An attorney will be able to tell you what supporting documentation you will need and will also be able to negotiate with the collection agency directly

 

For tax interception and wage garnishment, the government must first send you notice of the collection action and provide you the ability to request a hearing and contest the action.  If you have already received one of these notices, contact a student loan attorney at JRQ & Associates immediately to find out if you have grounds to fight the withholding. Stop wage garnishment and protect your wages against unlawful interception and manage your student loan debt with the help of a student loan attorney at JRQ & Associates.

 

 

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