The student loan lending industry is certainly flawed, but things are going from bad to worse. With an estimated 35% of borrowers in default over their loans, the federal government is easing the regulation of some debt collection practices.
Paychecks For Payment
While wage garnishment has always been one of the approved debt collection practices lenders carry in their arsenal, it certainly wasn’t the first tool used to collect. However, it seems that more lenders are switching to this line of defense far faster than in days past. Since September 30, 2013 wage garnishments went up 45% from the ten years prior. Hundreds of thousands of defaulted borrowers have been subject to their loan servicer garnishing 15% of their monthly paycheck. Considering the fact the borrower couldn’t afford to make their payments with an entire paycheck, where does garnishing 15% leave them in terms of other living expenses like a mortgage or rent payment?
Stopping The Order
Wage garnishment can be one of those tricky debt collection actions to resolve. Since the garnishment is a court order, debtors must either go to court to request the order be terminated or seek legal counsel to fight back. While student loan debts are not, typically, eligible for a debt discharge in through bankruptcy you can still halt a garnishment order and work out a solution for your loan payments. There are several student loan debt solutions that can lower payments, reduce interest rates, and even forgive a portion of the debt.