How to Stop Wage Garnishment for Student Loans in Florida

If you default on your federal student loan, the U.S. Department of Education has the right to garnish as much as 15 percent of your disposable income without first obtaining a court order. The wage garnishment remains in place until the entire debt is paid, and it can make it really difficult for you to pay your other expenses. Fortunately, there are multiple ways you can stop a wage garnishment in Florida. The most common of these are listed below.

Proper Procedure was Not Followed

Lenders must follow a certain procedure when they are obtaining a wage garnishment order. They must tell you of the garnishment at least 30 days before it takes effect, and they must send the notice to the right address. If you change your address and do not tell the lender, you are responsible for any delays in receiving notice of the wage garnishment. If the lender did not follow the proper procedure, it can serve as a defense to the wage garnishment and stop it from occurring.

The Loan is Not Yours

Proving that the loan is not yours is a common defense in many debt collection lawsuits, and it can be used when trying to stop wage garnishment for student loans, too. To dispute the debt, you must request a hearing once you receive the wage garnishment notice. If you can prove that someone stole your identity and that you did not benefit from the loan, you can stop the wage garnishment.

Negotiate the Terms of Repayment

It is often possible to negotiate the amount of debt you repay, and that holds true with student loans, too. If you reach an agreement with the U.S. Department of Education, you must send the first payment within 30 days of receiving the garnishment notice. After doing that, the agreement is in effect and the wage garnishment is stopped.

You were Terminated from Your Job

Being fired from your job will not stop a wage garnishment, but it will suspend it. After you get a new job, the wage garnishment will be suspended for the first 12 months of employment. This may give you time to repay some of the loans and stop a wage garnishment from going into effect after 12 months.

Working for Minimum Wage

Under federal law, wage garnishments can only equal 15 percent of your disposable income, and you must still have a minimum of 30 times the federal minimum wage once the garnishment has occurred. Borrowers that make minimum wage often will not have this amount remaining after a garnishment. Depending on the income of the borrower, the wage garnishment may be stopped or reduced.

Become Self-Employed

People that are self-employed do not have wages that can be garnished. This typically applies to general contractors, freelancers, plumbers, handymen, truck drivers, and commissioned real estate agents. If you own a business and the company pays you wages, a wage garnishment may still apply. However, it is sometimes possible to reduce your wages to the federal minimum wage, which may stop or reduce the wage garnishment.

File Bankruptcy

Unfortunately, it is nearly impossible to discharge student loans in bankruptcy. Still, if the U.S. Department of Education is trying to garnish your wages and you file bankruptcy, it will suspend the garnishment order until your bankruptcy case is finalized. Again, this could provide you with some time to repay a portion of the loan and perhaps stop the garnishment in the future.

Discharge the Debt

Although it is difficult to discharge student loans in bankruptcy, it is sometimes possible. If you can prove that repaying the loan would cause an undue hardship, you may be able to discharge your debt. The court will apply a test to your case to determine if repayment would create an undue hardship. You may also be eligible to have certain federal loans, such as Perkins Loans and Federal Direct Loans, discharged if you borrowed the funds to attend a school that closed.

If you suffered from a total and permanent disability for at least 60 months, and the condition is expected to last for at least another 60 months, you may also be eligible for a disability discharge. Discharging debt is not easy and different types of discharges have different requirements you must meet. A debt defense lawyer can advise on the different types of discharges you may qualify for.

Rehabilitate the Loan

If you make nine out of ten consecutive, voluntary, affordable and reasonable monthly loan payments, you can rehabilitate the debt. It will no longer be in default, and that can stop the wage garnishment. Rehabilitation is also possible if you consolidate the loans and agree to repay the consolidation loan through a repayment plan that is income-driven. These payment amounts are usually less than the amount of the wage garnishment.

Refinance the Debt

Sometimes you can refinance a federal student loan into a private loan. Essentially, the new loan pays the old loan, and that will stop the wage garnishment. Refinancing a student loan will mean you lose certain federal benefits, such as loan forgiveness and deferment options. Many people who default on their student loans also are not eligible for refinancing.

Repay the Loan in Full

People default on their student loans because they fall into financial difficulty. As a result, repaying the loan in full may not be possible. However, if you have family members who can help you pay off the loan, or you suddenly receive a windfall, such as an inheritance, repaying the loan in full will stop a wage garnishment.

Call Our Debt Defense Lawyer in Florida Today

If you have received a wage garnishment notice after defaulting on student loans, it is important you speak to a Florida debt defense lawyer. At Loan Lawyers, we can advise on how to stop wage garnishment, negotiate a debt settlement, and give you the best chance of a positive outcome. Call us today at (954) 523-4357 or contact us online to schedule a free consultation.