Garnished wages, do I have options??

[PrincessPolly]

I have been working so hard to get out of debt and kept tucking my student loan in the back of my mind. I guess I did it because I did not know where to begin or where to call to start making payments. Yesterday I received a call from a place called CCA and the lady said that I had to come up with $2740. in the next few days and a $385.a month payment for 12 months if I had to pay that much I would go into huge debt because I wouldn’t be able to pay any other bills let alone keep a roof over my head. I kindly explained to the woman that I know I messed up big time but can we work something out because I used up my savings when I lost my job and I live paycheck to paycheck so I cant come up with the $2740. She told me no if I cant pay $2740. in the next two days then they will garnish my wages. Very nicely I asked her if I could call her when I got home because her voice was so loud that everyone in my office was hearing what was going on. She said she works until 5 so I have to call before that. I explained I get out at 5 so she is calling me this coming Monday night when she works late, hmmm that is past the two days I had to come up with $2700. I want someone to tell me my options. I don’t want my waged garnished but I literally don’t have the $2740. She told me to borrow but I don’t have anyone to borrow from, she told me to use my 401k but I don’t have a 401k. I literally don’t have a way to come up with the money. Does anyone know if these companies can work with me or if their hands are tied and they have to collect that amount? I know I have to take this serious and really do want to start paying back my loan and I know they can garnish my wages but is her claim of me paying $2040. or garnished wages as my only options a scare tactic or do you think those could be my only options at this point? PLEASE someone help me. I want to know if I have options and if so what also how I go about things. I am really stupid to all of this and want to make things better but first I need help understanding.

[LittleB]

Google 'wage garnishments'...you'll find a lot of information.

 

It is my understanding that wages cannot be garnished without a court order. They have to sue you for the amount due and 'win' (default judgment/judgment).

 

If I'm wrong, someone please chime in.

 

The threat of wage garnishments is used more as a SCARE tactic to get you to pay.

 

I am assuming CCA is a collection agency? Who do you ACTUALLY owe the money to (the original creditor)?Maybe try contacting them and working something out.

 

Good luck.

[LynnInMN]

Google 'wage garnishments'...you'll find a lot of information.

 

It is my understanding that wages cannot be garnished without a court order. They have to sue you for the amount due and 'win' (default judgment/judgment).

 

If I'm wrong, someone please chime in.

 

<{POST_SNAPBACK}>

 

Student loans can garnish wages without a court order under what is called Administrative Wage Garnishment. It is authorized by Congress. However it wont start in two days if you cant come up with the entire balance. Is this your first contact with this collection agency?? Have you received any mail from them? The rules we had to work under dictated that we could not even send out an AWG notice until at least 30 days from the first contact. Below I have included the links from the US Dept of Eds rules and regs on AWG. You will be given an opportunity to appeal an proposed garnishment on the grounds that it will cause undue hardship. Before you talk to the agency on monday, sit down and work out a financial statement. Figure out how much realistically how much you can afford to pay them. You are eligible for rehabilitation which would be about a $50 payment a month for 12 months with your balance size. Question that. Shout if you need more help!!

 

http://www.ed.gov/offices/OSFAP/DCS/awg.html

 

Administrative Wage Garnishment

 

Under the Higher Education Act, the Department and guaranty agencies may require employers who employ individuals who have defaulted on the repayment of a student loan to deduct 10% of the borrower's disposable pay per pay period toward repayment of the debt. Also, the Debt Collection Improvement Act of 1996 permits the Department to garnish up to 15% of disposable pay. Garnishment may continue until the entire balance of the outstanding loan is paid. You should note that wage garnishment is used only for borrowers who refuse to voluntarily repay their defaulted loan and is not used with those borrowers who continue to make regular and timely monthly payments.

 

Borrowers

 

Administrative Wage Garnishment (AWG), like Treasury Offset (TOP), Federal Salary Offset, and litigation, is a tool of last resort used by the U.S. Department of Education (ED) to recover defaulted student loans. Thirty days prior to the issuance of the Order of Withholding, a notice is sent to the borrower advising of ED?s intent to garnish wages, and of their rights and appeal procedures.

 

The Borrower's Rights and Responsibilities

 

The borrower has the right to:

 

Be sent a notice 30 days prior to ED ordering wage garnishment that explains ED's intention to garnish, the nature and amount of the debt, an opportunity to inspect and copy records relating to the debt, object to garnishment to collect the debt, and avoid garnishment by voluntary repayment;

An opportunity to enter into a written agreement under terms agreeable to ED to establish a voluntary repayment agreement;

An opportunity for a hearing to present and obtain a ruling on any objection by the borrower to the existence, amount, or enforceability of the debt;

An opportunity for a hearing to present and obtain a ruling on any objection that garnishment of 10% of the borrower's disposable pay would produce an extreme financial hardship;

An opportunity for a hearing to present and obtain a ruling on any objection that garnishment cannot be used at this time because the borrower is now employed within a 12-month period after having been involuntarily separated from employment;

Having garnishment action withheld by filing a timely request for a hearing, until the hearing is completed and a decision issued;

Not to be discharged from employment, refused employment, or subject to disciplinary action due to the garnishment, and to seek redress in federal or state court if such action occurs; and

Not to have any information provided to the employer but what is necessary for the employer to comply with the withholding order.

To avoid garnishment of 10% of disposable pay, the borrower must:

 

Negotiate repayment terms acceptable to ED or the Private Collection Agency (PCA) and ensure that ED receives the first payment by the response deadline date on the garnishment notice, which is 30 days from the date the garnishment notice was sent;

Make a hearing request in writing postmarked no later than the deadline on the garnishment notice;

If requesting copies of documents, make a request for a hearing, because requesting document(s) does not delay a garnishment order;

Provide proof to support any objection made to the existence, amount, or enforceability of the debt, or a claim of legal exclusion or financial hardship;

Pay any expenses he or she incurs to obtain legal representation and to attend an in-person hearing; (All in-person hearings are held at one of the three regional offices: Atlanta, Chicago, or San Francisco. The borrower is responsible for the cost of attending and those of any witnesses to attend on their behalf.) and,

Initiate any legal action against his or her employer if the employer discharges, refuses to hire, or takes disciplinary action against the borrower based on the garnishment action.

From 488A of the Higher Education Act of 1965, as amended, 20 U.S.C. Section 1095a.

 

The AWG Hearing Process

 

ED uses garnishment to collect after attempts to obtain voluntary payments have failed. After numerous attempts to convince the borrower to repay his or her defaulted student loan(s) held by ED, an ED employee or representative [Private Collection Agency: (PCA)], after verifying the borrower?s address and place of employment, sends a series of notices/letters that warn the borrower to enter repayment or ED will use garnishment to recover that debt.

 

ED starts the garnishment process itself by sending the borrower a Notice of Intent to Garnish (SO2 Letter), which gives the borrower 30 days to file a request for review of objection(s) to the garnishment action and states his rights under the process. If the borrower?s request is filed timely (within 30 days of the date of SO2 Letter), ED suspends further action until ED has considered and ruled on all objection(s). However, if the request is filed untimely, ED does not suspend action while ED considers the objections, and proceeds to issue a garnishment order to the employer. However, if ED has not issued a decision regarding the objections within 60 days of the hearing request, ED will notify the employer to suspend garnishment until ED has issued a decision ruling that garnishment should be pursued to enforce the debt. If ED determines that the objections raised in the request for review are not proven, ED then notifies the employer to resume withholding pursuant to the garnishment order.

 

The debtor may object to garnishment on a number of grounds:

 

The debtor may object that the debt does not exist, or is not owed in the amount claimed by the government.

The debtor may object that applicable law bars the government from enforcing the debt as claimed, or prevents the government from enforcing the debt by garnishment action at the present time.

The debtor may object that garnishment in the amount or rate stated in the Notice of Intent to Garnish would create an undue financial hardship for the borrower and his or her family.

ED uses contractors to assist in the garnishment process. Contractors may, for example, assist by gathering documents and information needed to evaluate the debtor?s claims, and may negotiate repayment agreements on behalf of ED. Only the ED hearing official has authority to determine the validity of the debtor?s objections to garnishment, and only ED issues the final decision on the merits of those objections.

 

Borrowers may object to the proposed garnishment action on grounds such as the following:

 

A) Validity of the claim as stated in the notice:

 

a) The loan was previously paid or settled in full

The loan is currently in repayment or the debtor has entered into and complied with the terms of a repayment agreement

c) The amount claimed to be owed on the loan is incorrect because some payments have not been credited

d) The loan was discharged in bankruptcy

e) The loan is unenforceable due to

f) The loan may be subject to discharge in whole or in part due to:

 

Closure of the School attended by the borrower with the loan proceeds

Ability to Benefit falsely certified by the school that approved the loan.

Unauthorized Signature or Forgery of the borrower?s name on the promissory note or disbursement checks.

Public Service Cancellation (Perkins loans only)

Unpaid Refunds owed by the school attended by the borrower with the loan proceeds.

Death or permanent and total disability of the borrower.

Financial Hardship: garnishment of ten (10%) percent of disposable income will an undue financial hardship on the borrower or family.

 

C) Current enforceability of the claim is barred by law:

 

The debt cannot be enforced at this time because the borrower has filed for relief in bankruptcy and the automatic stay is still in effect.

The borrower has been reemployed within the past 12 months after being involuntarily terminated from the previous job.

The borrower is responsible for providing documentation or evidence to substantiate any objection(s) raised in defense to the enforcement of the debt.