Had a SL from 95 that was not paid due to finacial hardship. Things got worse and had to file Bankruptcy in 98 which was dicharged in 2001. I started getting on my feet by 2003 and then was laid off. Went back to work in 2004, had a hard time getting work because I found that my school closed and went bankrupt and I was not able to obtain a copy of my diploma because all records were siezed by someone who is now listed missing by the state. So, I tried to get the loan dicharged because i could not obtain a copy of my diploma and needed it for certain jobs. The loan was not dischrged and now PHEEA/AES is trying to garnish my wages at 10% of income. 380$ per month. I offered 200 per month and they are denying this offer. If I have to pay 380 I wiil, but its like darn, I am just getting on my feet to finally have a good life, and then I get hit with this mess. My main concern is that I don't want the payment garnished. I can pay them myself but looking to understand my rights doing so. Can someone give some insight?

dls

Did you receive the 30 day garnishment notice?? Did you respond to it???

You realize that it is 10% of disposable wages, not gross wages.

The 1st letter I recieved was when i replied with my request of what i thought was feasible to pay. 200$a month. They said i did not complete it correctly by sending them everything they requested and will continue to pursue the garnishment. I called them and asked what could be done to just pay and not have to go through garnishment. They told me to wait for an affidavnt of service in which i have 15 days to appeal. I just recieved this letter today from their lawyers

I am curious as to why they are using a lawyer since they dont need a court order to garnish.

If the first letter was a 30 day garnishment letter, you must answer it properly and send in supporting documentation. Once you hit that point, they want justification for the payment plan which includes copies of bills, statements, whatever they ask.

The letter today states that they have ordered a judgement to garnish my wages and I have 15 days to appeal. How can I get theM to let me pay instead of having it go through my employment. At this point i just want to avoid my employment being alerted.

Are these private loans or federally insured (stafford) loans? Federally insured loans do not require a judgement. I am thinking that these are private loans.

How can I tell? I do know they were from or brough by mellon bank

Mellon Bank was your lender. If this was a Federal loan, PHEAA was your loan guaranty agency. Do you not have any loan docs or letters that have been sent to you?? It should tell you what types of loans they are.

AES/PHEAA is the guaranty agency.
is there anyway to stop the garnishment and make the payments direct myself?

What exactly does the letter say?? Do they already have a judgement against you?? If they already have a judgement against you and are now going to enforce it, student loan rules and regs no longer apply.

Normally student loans dont use attorneys offices to collect unless they are judgement accounts. Garnishment normally is done thru a collection agency thru the Administrative wage garnishment program. This program doesnt require court intervention.

as i look at it more, this is not a judement its an order/statement to just garnish wages from PHEAA's legal counsel. there is no court date it just says i have 15 days to appeal to the oder to garnish

is there anything i could do?

i am hearing about rehab is that an option?

This is off the DOE site...where it states ED, in your case it would be PHEAA. From what you have already written, it sounds like you did not properly appeal or send send in supporting documents. Basically at this point, from my memory of PHEAA loans and procedures, once you miss that 30 window a garnshment notice will go out to your employer. You need to follow the procedure they send you too appeal it quickly.

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 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.

Thank you very much

I guess i will get started

Am I reading correctly that "private loans" such as Law Loans are not subject to admin garnishment? Do these loans require litigation and a judgement?

Correct. These are like regular consumer debt. They are not covered under the Higher Education Act.

I remember doing some legal research on Westlaw some years back, and there was a case (Fed, I think) in which Hemar Insurance was the plaintiff and the court held that even private loans (Law Loans in the case) are considered to be "student loans". When I read that I knew that I couldn't escape any Law Loans that Hemar was involved with.

Are you now saying something different LynninMN? If so, I would LOVE to see some backup on that, as I'm positive about what I read before. But of course I would be very happy if you were indeed correct.

The Administrative Wage Garnishment program only applies to defaulted FFELP and Direct Loans. Lawloans are still student loans, however they are not covered under this particular statutue.

Was the issue in that case whether they were SLs for purposes of the AWG provisions specifically or whether they were SLs for some other purpose? For example, if a private SL is given by a non-profit entity (which is usually the case -- even if it's a for-profit lender, a non-profit arm of the company is the one actually making the private loan in most, although not all, cases), it can't be discharged in BK. You may also want to confirm that it was in federal court, or, more to the point, that this particular issue (whether or not it was considered a SL) was decided on federal and not state law, if it was a mixed jurisdiction issue (it would still be in federal court). Many states have different/stricter definitions for things like this and that may have something to do with it as well.

Okay, I just looked up any cases with Hemar as a party and I think I found the one you're talking about. It did deal with defining a Law Access loan under the BK definition of student loan and it did not address the issue (which would be separate) of whether they would be considered a "SL" for AWG purposes at all. The issue was whether these loans were considered to be "made by a non-profit organization," which would thereby exempt them from discharge under BK (they ruled that they were made by a non-profit and therefore subject to the exemption). The case is In Re Pilcher, Hemar Service Corp. of America Inc. v. Linda Lorraine Pilcher, 149 B.R. 595. It was decided by the U.S. Bankruptcy Appellate Panel of Ninth Circuit. So, you can't BK them, but they would still need to go to court to get a garnishment order. We never talked about the specific case law, but the fact that SLs were not eligible for BK was a large topic of discussion when I was in law school!!

Hope this helps! Good luck!!