Can You Fight a Student Loan-Related Wage Garnishment?
How can you challenge a wage garnishment in Massachusetts? The first step is to contact a Massachusetts wage garnishment attorney as soon as you learn a creditor intends to garnish your wages.
When an employer withholds a percentage of your earnings to pay one of your creditors, it’s called a wage garnishment. A creditor may also garnish your bonuses and overtime pay, and employers may charge a “service fee” each time a part of your earnings are withheld.
Your right to contest or stop a student loan wage garnishment depends on the type of loan, its status, and state and federal law. You must be advised and represented by a Massachusetts wage garnishment lawyer who has extensive experience representing clients with student loan debt.
How Extensive is Student Loan Debt?
According to the Federal Reserve, student loan debt in the U.S. now exceeds $1.77 trillion. In the last decade, student loan debt balances have increased 66 percent. The average federal student loan debt is $37,853 per borrower. About 42 million people in the U.S. have student loan debt.
However, student loan borrowers have legal rights and protections. If you can get in front of the problem with the assistance of a Massachusetts wage garnishment attorney, you may be able to prevent a student loan-related wage garnishment.
What is “Administrative” Wage Garnishment?
When the U.S. Department of Education pursues a federal student loan borrower, it may impose what is called an administrative wage garnishment. If you default on a federal student loan, the Department of Education may “administratively” garnish up to fifteen percent of your pay.
Under federal law, garnishment for a federal student loan is “administrative” because it does not require a court order or judge’s approval. A borrower must already be in default for a federal student loan before an administrative wage garnishment is imposed.
A wage garnishment for a federal student loan default is seldom immediate, but if you do not resolve the matter in a reasonable time, an administrative wage garnishment is almost inevitable.
How Does Administrative Wage Garnishment Work?
The only requirement for the lender to impose an administrative wage garnishment is to send a thirty-day notice to the borrower’s last known address. That notice also informs borrowers about their other payment options and their right to contest the wage garnishment.
Agreeing to an affordable repayment plan may not only stop a wage garnishment; it may also help a borrower get out of default entirely. Such an agreement is called loan rehabilitation. Other grounds for avoiding a wage garnishment are bankruptcy, disability, and financial hardship.
However, you will need to call an attorney at once and take action before your thirty-day notice period expires. Stopping administrative wage garnishment after it begins is more difficult and costly than resolving the matter before the garnishment is imposed.
How Are Wages Garnished for Private Student Loans?
A wage garnishment for a private student loan works differently. Private student lenders cannot impose administrative wage garnishments. Instead, once the loan is in default, they must bring a lawsuit and obtain a judgment against the borrower.
After the lender obtains a judgment, if the borrower fails to resolve the loan, the lender could seek to impose a wage garnishment. In Massachusetts, lenders who obtain a judgment must bring a second lawsuit to garnish a borrower’s wages.
Massachusetts offers borrowers in these cases some basic protections. A creditor cannot garnish more than a certain percentage of your wages. Under state law, the maximum amount that a creditor may garnish is the lesser of:
- fifteen percent of your weekly gross wages or
- fifty times the federal or state minimum wage
How Can You Challenge a Wage Garnishment?
If you are notified that a private lender is suing you, contact a Massachusetts wage garnishment lawyer immediately. Consulting a lawyer as soon as you are informed of a debt collection lawsuit is the best way to learn about your rights and options for challenging the lawsuit.
If the creditor wins a wage garnishment order or if the Department of Education imposes an administrative wage garnishment, there are several steps you can take. As soon as you receive the garnishment notice, have your attorney request a hearing.
At that hearing, you and your attorney can offer evidence in support of any objections to the debt, amount, or enforceability, or you can plead disability or financial hardship. If another creditor is already garnishing your wages, it could soften the impact of a new wage garnishment.
Additionally, certain income may be exempt from any wage garnishment: alimony and child support, retirement and disability income, and Social Security payments.
Should You File for Bankruptcy?
If your challenges to the wage garnishment fail, and you have no other options, you may consider filing for bankruptcy. Bankruptcy has some quite negative consequences for your credit, and you will still have to pay your student loan debt, but bankruptcy stops wage garnishment.
Bankruptcy is a last resort option for anyone who is overwhelmed by debt, so discuss bankruptcy and its consequences with a wage garnishment attorney at Benner Law before you make a final decision about a bankruptcy filing.
Benner Law Can Help You Find a Debt Relief Solution
If you are struggling with debt or a creditor is garnishing your wages, take the matter at once to a Massachusetts debt relief attorney at Benner Law. Since 2002, attorney Tom Benner has been assisting individuals and families in Massachusetts who have difficulty paying their debts.
Benner Law advises and represents clients in New Bedford, Plymouth, Hyannis, Taunton, Braintree, and throughout Massachusetts. We help clients deal with wage garnishments, repossessions, foreclosures, and creditor harassment. If bankruptcy is your only practical alternative, the debt relief team at Benner Law will guide you step-by-step through the process.
If bankruptcy is not your only option, Benner Law will find the debt relief solution that’s right for you. To learn more about our legal services or to schedule a free, no-obligation case evaluation, call the offices of Benner Law promptly at 774-228-7338.
