Garnishing While Paying

Jennifer and her husband have $60,000 in student loans. Can their wages be garnished if they are paying less than the payment amount, and if so, how far behind must Jennifer and her husband be for that to happen?

QUESTION: Jennifer in Florida and her husband have $60,000 in student loans. Can their wages be garnished if they are paying less than the payment amount, and if so, how far behind must Jennifer and her husband be for that to happen?

ANSWER: We don’t know how far behind you have to get before they garnish wages because there’s no formula. They are not competent enough to follow a formula. Sometimes I find people who are two years behind before they ever wake up and do anything and other times I find they do it at six months.

They can garnish you when you’re paying payments, but 90-something percent of the time they don’t. Let’s say the payment is $100 and you’re giving them $60 or $70; very seldom are they going to mess with you. They’ve got activity on the account and all their collections software is screwed up when they are posting payments. It kind of delays any red flags to get it sent to the lawyer.

The problem with student loans is that they don’t have to send it to the lawyer to garnish it. Both them and the IRS are the only ones that don’t have to sue you to take your wages. They have too much power. Congress gave them the power because it’s federally insured. All they have to do is send your employer a letter and boom, you’re done.

I’d keep talking to them and messing with them and sending them money and working out payment plans and taking deferrals and doing everything else you can do. Keep poking around; don’t just let it lay there. You are in the most danger when you just let it lay there.

Talk to them once a day, not 10 times a day. And don’t talk to them if they are being rude or cussing. If they do that, tell them you’ll talk to them when they speak to you like an adult. Tell them you’ll work something out with them, but they can’t talk to you like that, and then hang up. If they are calling you 10 times a day, you don’t need to take that.

Their job is to make you angry; that’s how they collect. They use these low-rent collectors who are losers. They figured out that if they can get you emotional, you get stupid. Emotional usually means afraid or angry. If you get mad enough, you’ll give them your kid’s college money or your food money for the week. It’s a game to them; it’s psychological warfare.

You guys have only been working on this thing for about three months. You are going to turn the corner and get them under your foot again because they’ve been running your life for a long time mainly because you were disorganized and weren’t on top of your money. Now you are cutting stuff and getting your income up and the outgo down. You are really getting into attack mode. I predict by Christmas you’ll have them under control.

You’ve never been at this point before; you are ready now. You’ve got that tone in your voice that says you’re done and you are going to get this paid off. You are going to get rid of his car lease and get your car paid off. You guys are going to take extra jobs, and you’re not going on vacation. You aren’t going to see the inside of a restaurant unless you’re working there as an extra job. You’re on track, and you are going to get this done.