If you can’t afford your student loans and stop paying them, your loan will go into default.  Once that happens, your creditor will sue you and most likely will win a judgement against you that will allow them to garnish your wages.  There is a way to stop student loan wage garnishment before it happens through a loan rehabilitation. I will explain using a real client of mine.

Stop Student Loan Wage Garnishment

I have a client whose federal student loans were in default.  The loan was reassigned to the Department of Education (DOE), who used Performant Recovery to collect the debt owed on the loan. When he contacted me, my client was facing a potential wage garnishment for student loans if he could not come up with a plan to start repaying this debt.  Based on his income, we were able to get him qualified for a loan rehabilitation. 

A loan rehabilitation is a way for the DOE to get loans back into repayment and is an alternative to seeking wage garnishment. They use a formula based on your income and expenses to determine the amount of your monthly payment.  This calculation is based on the 15% Income Based Repayment Plan (IBR) formula. The DOE’s incentive is that they want your nonperforming loan to turn into a performing one. 

Under a loan rehabilitation, my client pays only 9 monthly payments of $5.00 per month. Upon completion of those payments, his loan will be sold to another lender for further repayment on the balance due.  Since the loan was sent back to the DOE from the previous lender, it will need to go out to another lender for repayment once the loan has been successfully rehabilitated.

More important, the bad marks on my client’s credit will be removed. He will also be eligible for forbearances, deferments, and income-based repayment plans. Not a bad deal for $45 in total payments for the next 9 months.


How To Stop Student Loan Garnishment

They key to stopping student loan wage garnishment is timing.  Your lender understands that your wages are needed for the basic necessities of life and will work with you, but you must take action within the time frame permitted by law. To learn more about wage garnishment in San Diego visit our blog post, How To Fight Wage Garnishment In San Diego.

If you want to learn more about how to stop your student loan wage garnishment, contact me for a FREE consultation by using our online contact form or call me at 858-217-5051. 


Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego, CA. For more information, please contact Daniel Gamez at 858-217-5051, daniel@gamezlawfirm.com or use our online contact form. Stay updated with the latest debt relief tips by following on Facebook and Twitter!