When you are in default on your student debt for three to six months, you can expect to deal with some financial difficulties such as student loan garnishment.
This is a process where the lender can contact your employer and legally deduct 15% of your monthly wage.
This could be a real trouble, especially when you depend on your paycheck.
Learn how to get out of student loan garnishment with the following effective strategies.
(Note: Defaulted loans can lead to lower credit scores, pestering collections, and a worried mind. Avoid default and learn how to turn a “Default” status into a “Current” status in under 90 days by using our Road Map to Getting Student Loans Out of Default. Click here to learn more and get the free map – before your next payment date!)
How to Prevent Student Loan Garnishment
1. Sign up for an Income-Driven Repayment Plan
Income-Driven Repayment Plan is a smart way to avoid your wages from being garnished.
Based on your income, you can request a more affordable repayment amount but remember, it will also cause your repayment term to be extended.
This could result in paying more than what you owe because of the interests that will accrue.
2. Enroll in an Auto Pay Service
Not all people who have defaulted student loans intend to stop making payments.
Some were just having troubles managing them, especially if they have multiple students loans which can make it easy to miss their due dates.
In this case, you can choose to set up monthly reminders or better yet, enroll in automatic payments to make it easier to track your payments.
3. Negotiate with Your Lender
One important thing you can do when you receive a notice of garnishment is to communicate with your lender immediately.
This will allow you to ask for a payment plan to stop your wages from being garnished.
Similarly, you can file an objection to the student loan garnishment due to a financial hardship.
For this, you are required to submit documentation to support your claim within 30 days.
4. Ask for Forbearance or Deferment
When having a financial difficulty and paying your student loan becomes impossible, it is a great option to ask your lender for a forbearance or deferment.
In a stage of forbearance, you have the option to pause paying your loan for up to three years.
During this time, interest still accrues and if your loans are unsubsidized, you will shoulder any interests accrued during the time of deferment.
However, if your loan is subsidized, any interests accrued during this stage will be paid by the government.
5. Loan Rehabilitation Program
Under a loan rehabilitation program, you are required to make nine qualifying payments within ten months.
After five successful payments, your student loan wage garnishment may be stopped.
But, you have to continue making payments under your rehabilitation program.
Note, however, that under this program, you are paying two payments, one for your student loan wage garnishment and the other for your loan rehabilitation payments.
6. Consolidate your Loans
Another way to stop your wages from being garnished is to consolidate your loans.
This option does not help reduce the amount you owe, but can save you from sanctions on your defaulted payments.
Additionally, it helps you easily manage multiple student loans by paying only one monthly payment.
7. Pay the Loan in Full
While this may sound difficult, paying off your student loan in full is one of the best ways to avoid student loan garnishment.
It doesn’t hurt to ask for support from those willing to help.
Watch this video by Bank of America for an effective way to repay and avoid getting default on your student loans:
https://www.youtube.com/watch?v=VXcKNGTVts0
Student loan garnishment is only one among the many serious troubles you may encounter when you are in default on your student loans.
It could also affect your credit which will hurt your ability to receive loans for big purchases in the future.
Thus, to avoid these problems, you need to be responsible for monitoring and managing your student loans.
(Note: Are your student loans giving you a default headache? Avoid default and learn how to turn a “Default” status into a “Current” status in under 90 days by using our Road Map to Getting Student Loans Out of Default. Click here to learn more and get the free map – before your next payment date!)
Do you have any experience on student loan garnishment? Share them with us in the comments section below!
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