Wage garnishment is often the last resort for creditors and collectors who are looking to collect on delinquent debt. This process is triggered when your employer is legally required to deduct up to 25% of your earnings to pay off your debt. When it comes to student loans, this usually happens after you default on your payments.
The best way to avoid wage garnishment is to make you don't default on your student loan debt in the first place. But when you're already in the process, there are five ways to stop it—without necessarily paying someone to help you. Here's what you need to know.
1. Find out how to appeal
When you receive notice from the Department of Education (DOE) that they plan to garnish your wages, first verify that the information is correct and that you've received a legit notice. The notice should explain when garnishment will begin and how you can appeal the garnishment.
If you can afford it, you might want consider getting help from an attorney who specializes in student loan debt. While you don't necessarily need an attorney, a lawyer can help you better navigate your options.
2. Object to wage garnishment through a hearing
You have the right to request a hearing from the Department of Education (via this online form) if your debt consists of student loans. This delays wage garnishment and may even stop it if:
- You have not defaulted on your loans and there was a mistake.
- Garnishment would leave you with extreme financial hardship.
- If you were laid off after being in a position for less than a year.
- You recently filed for bankruptcy.
3. Consolidate your loans ASAP
If you received notification of garnishment but it has not yet begun, you may be able to stop it by consolidating your loans into a Direct Loan.
The consolidation process essentially combines all your federal loans into a single loan, which usually comes with a lower monthly payment. You’ll need to enroll your new consolidated loan in an income-driven repayment plan. Moving through this process creates a new loan that is in good standing.
Tip: The fastest way to to accomplish this is to call your loan servicer and ask them to calculate your new monthly payments. Many lenders can even consolidate your loans right over the phone.
See also: Who Has My Student Loan? How to Find Your Federal Loan Servicer
4. Use a loan rehabilitation program
Another possibility: loan rehabilitation. A loan rehabilitation program is an agreement with your loan holder that you will make on-time monthly payments for 10 months. This will stop wage garnishment after you make five successful payments. Your loan holder determines the amount of your monthly payments based on your income.
One important (and unfortunate) thing to note is that this means you will make two payments each month: one to wage garnishment and one to the rehabilitation program. However, it might not be as bad as it sounds. Your monthly payment under a loan rehabilitation can be as low as $5 depending on your income.
5. Start a repayment program
When you receive notice that your wages are being garnished, another option you have is to work directly with your lender or the collection agency to get on a repayment program and begin digging yourself out of debt.
This option assumes you have enough money to pay your loans each month, but if you don't, you might also be able to work with your lender to lower your monthly payment so that it's easier for you to pay.
See also: How to Contact Your Loan Servicer
The best things about these options is they are free. While some companies claim to be able to help you stop wage garnishment for a fee, you don't need to pay for help. Remember, oftentimes, asking for a fee in exchange for student loan help is a scam.