How to survive the double whammy of a defaulted student loan and wage garnishment

Having your wages garnished is no laughing matter. Especially in today’s economy, even a slight dip in income can put you in a dangerous situation.

In Illinois, residents who have defaulted on their student loans are finding out just how dangerous, because they are threatened with wage garnishments and other legal actions. If you’re one of these people, you’re not alone. The number of student loans going into default has been rising in recent years in the state and across the country.

What do you need to know about the rules and procedures of Federal wage garnishment?

First, your wages could be reduced without warning. One week you get your normal paycheck, the next week your paycheck is a lot smaller. If this happens, you have the right to request a review hearing. It is vitally important that you immediately find and submit the appropriate request and review form contesting wage garnishment. You should be able to get the correct form from your employer’s Human Resources department, or online from the Federal government.

Second, how much, or what percentage, of your paycheck is the government allowed to take through wage garnishment? According to the Higher Education Act, your employer cannot withdraw any money from your paycheck if your income is less than $217.50 per week. If you make more than that, the government can take 15% of your total wages.

Think of losing 15% of your income for years to come. Most of us would only be able to scrape by year after year after year. Yes, you’d be paying off your student loans, but at what personal and financial cost?

Third, wage garnishment isn’t the only threat to your well-being. In many cases, the Federal government can also withhold all or part of your income tax refund. It can even garnish any social security benefits you might be claiming if you’re disabled, unemployed, or retired, making it almost impossible for you to provide for yourself and your family.

For most of us, this simply isn’t acceptable. Luckily, there is a way that you can completely remove wage garnishments, lower your monthly student loan payments, and even restore your credit.

How? Find a reputable loan refinancing organization that specializes in defaulted student loans. It can help you reclaim your wages and your life.