I have been in contact with GC Services who currently are the collection agency for my defaulted SL. They have verified my employment TWICE in the last 4 months with my employer. They wanted me to pay them $113 a month by checking account. I said no way. I told them I did not have a checking account, just a savings (yeah, I lied.) I told them I do not give out that info over the phone. I decided since there is never over $30 in the account at any given time ANYWAY, why not. Well, before I could give them the debit card number, they then the put me on hold, come back on the line and told me my account was not eliglible for rehab because there is a judgement on the account and to call DEPT of ED, which I did.

I called Dept of Ed, they came up with something from July 1992 about being sued by the State of Texas for a Tx GSL. This loan and another loan were consolidated. They then told me to contact GC Servies and that I didn't want to have to go through a garnishment; which I don't. We both hung up. The next day, June 28, 2006, I get a letter in the mail from GC Services about beginning payments on the 28th of the month.

Well, of course, I put the letter aside. Now, July 29 has come and gone and I have not sent GC Servies a dime. GC Services called today to ask where my payment is. I said I would mail something in the next week. Probably shouldn't have told them that, but I did. I am still new at this site.

My thinking is, I went over my budget with them two months ago, I am a single parent and this is my only income. Very little was left over the budget; less than 200 bucks. Do I have to pay GC Services and do I have to pay the entire $113 to keep them from garnishing my wages? Will any "reasonable" amount do? I am trying to buy a house in the next couple of months.

Thanks for all who help.

Your trying to buy a house and you have a federal government judgement against you??? Have you read any of this forum??

For starters, with a defaulted student loan, you do not qualify for FHA or VA mortgages or any other state or federal assistance programs. Not disclosing a defaulted student loan on a federal mortgage application is considered fraud. The judgement against you will chase away the sub prime lenders. If you have any mortgage inquiries on your credit report already, expect the next letter from GC services to be your garnishment notice. You stated that you already went over your budget with them....sending less than the set payment will trigger AWG. That will be 15% of your disposable pay. With a judgement it could be more. Even appealling will be difficult since you have already done a budget with them. Purchasing a home will not be an acceptable expense. My suggestion is you start taking this debt very seriously. If you ever hope to get this paid off and buy a home, start looking for a part time job to work on paying this off. Making payments on a default/judgement will not get you a mortgage...this beast has to be paid off.

I don't see how any of this should even be showing on a credit report. The reporting SOL for the loan and the judgement are both over 10 years old if I am reading the OP's post correctly that judgement was obtained in 1992.

How much is the total judgement for?

How much can you afford?

Have you ever paid anything towards this? I'm surprised your tax returns from the past few years have never been taken to offset this loan. You can probably expect that to happen too.

Can you take out a personal loan to pay it off?

Lynn is correct that the CA on this can and will garnish your wages and it may end up being more than you can afford or what's being offered to you right now.

While housing is a necessity and the mortgage could possibly be lower than rent (which in some areas of the country, it still is) and has plusses since it may actually free up more money for the OP or even the option of using a refi/HELOC to pay it off in full, but it doesn't even sound like you have money for closing costs.

Lynn, can the OP do anything to negotiate a lower, more affordable payment? What, if any, options does she have to keep this out of garnishment?

OP...you only cut and pasted the previous conversation. Were you going to add something???

You know, applying for a new car loan is going to give the more power to the CA. (Mortgage forum.) They are going to examine your budget, see all your credit inquires and laugh.