Get Out of Debt Guy

My Pay Was Garnished Over Old Student Loans

Posted September 30, 2014 3:46 p.m. EDT
Updated November 8, 2014 6:42 p.m. EST

WRAL Reader Question

Dear Steve,

I originally had to leave school almost 4 years ago due to my financial situation at the time, so I was moving from place to place around Birmingham for two of the four years. After that I moved back to my home town Dothan, Alabama and got a job as a plumber/electrician for the last two years and it is going great.

A few months back I had applied for a debt relief program and everything was going great, up until this point I had never received any documentation or calls from the collection agency, or had my wages garnished at any jobs, and on top of it all I sent the financial aid department at UAB several emails regarding the whole situation with zero replies.

As I was working out the debt relief program the secretary at my job filed a wage garnishment of 25% of my disposable wages every week, I cannot pay my bills, eat, keep my car up, or my doctor bills. I do not know what to do at all...

Is there any way i can have the percentage lowered or anything, I do not make enough money to live on anymore.


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Dear Nicholas,

Good old Dothan. I have fond memories from a visit there.

Well hopefully your loans are federal student loans. For those there are some great options for a guy in your spot. Those income based repayment programs can give you a payment as low as zero dollars a month. Best yet, you should be able to use a government Direct Loan to consolidate your way out of the default and wage garnishment and into the income based payment.

For complete details on how to make this happen, click here

If these are private loans you would have been sued first and then had a judgment placed against you and then the wage garnishment.

If that is what happened then you might actually want to talk to a local bankruptcy attorney who is licensed in Alabama and discuss a Chapter 13 bankruptcy. That can drop your private student loan payments to zero for the five years while in the bankruptcy. But it will not eliminate them. 

That being said, some private student loans can be eliminated in bankruptcy, read this.

Before I go, here are to tackle your issue.

Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.