Full Version: Garnishment Questions
My employer received a garnishment notice in the mail today. It says second notice and employer says they never got a first notice. The amount is $5,000 higher than I thought. Am I still within the time limit to appeal? Would an appeal help me? Other than disputing the amount I really don't have any grounds. I want to pay and get this loan rehabbed but on reading the bulletin board it looks like I can't rehab as long as it's in garnishment. Employer is being kind and understanding. I'm mortified that it came to this but had an awful couple of years w/illnesses, out of work for 4 months last year (got fired by a looney tunes new boss after 15 years excellent work hx), etc. I haven't been a good payer for years and want to change that. NELA holds the loan. Advice?
QUOTE(katydid @ Jul 11 2007, 10:01 PM) 
My employer received a garnishment notice in the mail today. It says second notice and employer says they never got a first notice. The amount is $5,000 higher than I thought. Am I still within the time limit to appeal? Would an appeal help me? Other than disputing the amount I really don't have any grounds.
NELA when I collected for them, charged 24% in collection fees. Plus keep in mind accrued and capitalized interest. Since your employer has already been sent the garnishment notice, you have long since missed the 30 window to appeal. If you have specific grounds to appeal like hardship you can appeal....however NELA was always really hard nosed about late appeals.
I want to pay and get this loan rehabbed but on reading the bulletin board it looks like I can't rehab as long as it's in garnishment.
Yes you can rehab...you can't consolidate. However the payments have to be over and above the garnishment.
Employer is being kind and understanding. I'm mortified that it came to this but had an awful couple of years w/illnesses, out of work for 4 months last year (got fired by a looney tunes new boss after 15 years excellent work hx), etc. I haven't been a good payer for years and want to change that. NELA holds the loan. Advice?
You might have a loophole here to appeal. One of the grounds for appealing is that you have to be employed for 12 months after an involuntary seperation from a previous job.
NELA when I collected for them, charged 24% in collection fees. Plus keep in mind accrued and capitalized interest. Since your employer has already been sent the garnishment notice, you have long since missed the 30 window to appeal. If you have specific grounds to appeal like hardship you can appeal....however NELA was always really hard nosed about late appeals.
I want to pay and get this loan rehabbed but on reading the bulletin board it looks like I can't rehab as long as it's in garnishment.
Yes you can rehab...you can't consolidate. However the payments have to be over and above the garnishment.
Employer is being kind and understanding. I'm mortified that it came to this but had an awful couple of years w/illnesses, out of work for 4 months last year (got fired by a looney tunes new boss after 15 years excellent work hx), etc. I haven't been a good payer for years and want to change that. NELA holds the loan. Advice?
You might have a loophole here to appeal. One of the grounds for appealing is that you have to be employed for 12 months after an involuntary seperation from a previous job.
QUOTE(katydid @ Jul 11 2007, 10:01 PM)
My employer received a garnishment notice in the mail today. It says second notice and employer says they never got a first notice. The amount is $5,000 higher than I thought. Am I still within the time limit to appeal? Would an appeal help me? Other than disputing the amount I really don't have any grounds. I want to pay and get this loan rehabbed but on reading the bulletin board it looks like I can't rehab as long as it's in garnishment. Employer is being kind and understanding. I'm mortified that it came to this but had an awful couple of years w/illnesses, out of work for 4 months last year (got fired by a looney tunes new boss after 15 years excellent work hx), etc. I haven't been a good payer for years and want to change that. NELA holds the loan. Advice?
I would at least submit the paperwork to appeal. I was being garnished (not be NELA) and was able to get it lifted and rehab the loans instead.
Good luck.
Here is the link from Ed's AWG site Q&A's
http://www.ed.gov/offices/OSFAP/DCS/awg.html
This is the link for employer questions (very useful information, even for a borrower)
http://www.ed.gov/offices/OSFAP/DCS/awg.employers.guide.html
It is great if your employer wants to help you but please don't forget if they go into Noncompliant Employer Status (which they soon will if they don't start witholding from your paycheck) They can be held liable for your loans and Dept of Ed can sue them for what you owe. If they're a good employer you certainly don't want them to end up in that position. After the 2nd notice is sent they have precious little time to get the Garnishment started. There isn't much you can do now except file an Untimely hearing. From what I've read it appears you'll want to file for a reduced amount. Ed will want proof of all of your necessary bills (rent, insurance, utilities etc). During the time your Hearing is being reviewed you will still be garnished since this is untimely. If you were terminated from your last job and have been at the new employer less than 12 months you can also appeal. (see links for more specific info).
A word of warning: Simply quitting and moving on to another employer is a bad idea because come next year IRS will update to Ed again and they'll have your new employer.
http://www.ed.gov/offices/OSFAP/DCS/awg.html
This is the link for employer questions (very useful information, even for a borrower)
http://www.ed.gov/offices/OSFAP/DCS/awg.employers.guide.html
It is great if your employer wants to help you but please don't forget if they go into Noncompliant Employer Status (which they soon will if they don't start witholding from your paycheck) They can be held liable for your loans and Dept of Ed can sue them for what you owe. If they're a good employer you certainly don't want them to end up in that position. After the 2nd notice is sent they have precious little time to get the Garnishment started. There isn't much you can do now except file an Untimely hearing. From what I've read it appears you'll want to file for a reduced amount. Ed will want proof of all of your necessary bills (rent, insurance, utilities etc). During the time your Hearing is being reviewed you will still be garnished since this is untimely. If you were terminated from your last job and have been at the new employer less than 12 months you can also appeal. (see links for more specific info).
A word of warning: Simply quitting and moving on to another employer is a bad idea because come next year IRS will update to Ed again and they'll have your new employer.
Hey everyone, thanks for your advice. I don't want my employer to get into any kind of difficulty about this at all. Do you have any idea of how much I will have to pay over and above the garnishment and for how long in order to rehab the loan? With the garnishment I will be on the knife edge of being able to meet my monthly bills - doable but painful. Luckily, I have no other debt other than mortgage and I have long experience with being low maintenance. Any indication of what it will take to get it rehabbed? I just passed the twelve month mark on my new job so it looks like that will not help me in an appeal - have I understood that correctly?
Thanks again all. It really helps to have the facts so I can figure out how to fix this.
Thanks again all. It really helps to have the facts so I can figure out how to fix this.
Garnishment is 15% of your disposable pay..
How much do you owe now??
How much do you owe now??
QUOTE(LynnInMN @ Jul 12 2007, 08:54 PM)
Garnishment is 15% of your disposable pay..
How much do you owe now??
How much do you owe now??
I owe slightly over $23,000. I know that garnishment is 15% of disposable pay but my question is how much would I have to pay above that to rehab? Would I be better off credit-wise to try to refinance my home to pay this off or to rehab it if I can? The problem is I'm very cash poor. I have some equity in my home, probably enough to pay this off but I don't know if that is the right approach esp. since my credit is in pretty poor shape right now so it feels questionable whether I could refinance. My choice during the recent "troubles" was to hang on like grim death to the house and let the student loan go into default.
An easy way to find out your garnishment amount is take your check after taxes and multiply it by .85, this will give you what will remain of your check after the amount is witheld. I understand being cash poor. A good general rehab payment would be 1% of your Principle+Interest (they don't use Collection Fees to determine your payment amount). Let's assume your Fees are about 24% of $23,000 ...then your payment would be around $175/mo. on top of Garnishment. Realize this is only a guesstimate and you would need to speak with the agency to find out exactly what your payments would be.
As to whether you should refinance your home, I would personally be nervous using all my equity up. It's better for your credit to rehabilitate your loans anyway if you can swing it.
As to whether you should refinance your home, I would personally be nervous using all my equity up. It's better for your credit to rehabilitate your loans anyway if you can swing it.
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