Have Defaulted Student Loans Caused You:
Wage garnishment? High monthly payments?
Bad credit?

Have you considered using a bank loan to pay off your student loans or a federal student loan program?

Defaulted Student Loans Turn into a Nightmare

Joe was in the hospital when he received a letter informing him that the Education Credit Management Corp was giving him 30 days to repay his student loans or that they would start garnishing his wages. You see, Joe had defaulted student loans on a student loan for a degree that he had not even completed. It was a terrible timing for Joe because at the time he had been in the hospital for about 30 days.

Well, the fact is that he had never paid on his student loan, and prior to the garnishment he should have made arrangements to start paying on his loans. But he did not do it and now it was time to face the situation. You see, you might not want to pay, but you will have powerful government tools used against you if you do not make your student loan payments. Many lending institutions prefer that you miss your payments and go into default. When you default on a loan, the institution loves it because, after all, they do not lose a penny, but will make a good amount of additional money from you because they will add another 18.5% in collection fees to the account, which is pure profit for them and a nightmare for you, just like it was for Joe.

Below is what to expect if you are in a defaulted student loan.

There will be tax refund offsets on a defaulted student loan. What this means is that the IRS can and will take or intercept any income tax refund you may have coming back to you until your defaulted student loan is paid in full. This method is one of the most popular government methods to collect back on defaulted student loans and the Department of Education collects literally hundreds of millions of dollars annually this way.

Next, if not first, you will have your paycheck garnished. The government can and will take a limited portion of a students paycheck who is in a defaulted student loan predicament. The government can take up to 15% of your disposable income. But they cannot take more than the equivalent of 30 times the current federal minimum wage.

Additionally, if you are in a defaulted student loan state, your federal benefits can be taken. For example, the government can take your Social Security retirement benefits and your Social Security disability benefits for your defaulted student loan repayment. They cannot, however, take your Supplemental Security Income.

It is good to note that the government cannot take any amount that would leave you with benefits less than $9000 per year or $750 a month. And again, they cannot take more than 15% of your total benefits. But still my goodness, that is a lot of money the government is taking because of your defaulted student loan; money that belongs to you.

Finally you could get sued on a defaulted student loans. Both the government and private lenders can sue you to collect defaulted student loans. And unlike other debts, there is no time limit on suing to collect student loans. You can be sued indefinitely.

So what do you do to help yourself during this outrageous attack of your money and time? First, you should file an appeal immediately to prevent or dispute a wage garnishment. If it is done before the request for the wage garnishment is sent to your employer, it can give you an additional amount of time (up to 60 days) to work out a repayment arrangement with your lender. If it is done after the wage garnishment has started and your paychecks are being hit, it can either help reduce the amount of the garnishment based on your financial situation, and in some instances of extreme financial hardship, stop the garnishment altogether.

Your next step should be to hire a good, reputable company that will help you through the process. They will contact the lender of the loans and try to work out a repayment plan. They will look at your defaulted student loan and perhaps consolidate it into one affordable loan that you can afford to pay back monthly.