The plague of student loan debt looms over the heads of millions of people across the country every day. Mounting student loan debt prevents people from buying homes, having families—and in some cases—obtaining the basic necessities. Many devote a hefty amount on their paycheck to meet the bare minimum monthly payment, only to scrape by for years until their debt is paid. If you’re swimming in student loan debt and you’re having trouble making ends meet, you’re not alone. Becoming financially independent after college is difficult at best for many, and the rising cost of education makes it much worse.
Unfortunately, student loan debt isn’t going to let up any time soon. Over 44 million American suffer from student loan debt, and more people are crumbling under the pressure to pay it off. But when people stop their monthly loan payments, they only put themselves in dire straits with banks, creditors and the law. If you have student loan debt, you can’t avoid paying it forever. Student loan debt now exceeds credit and auto loan debt, and this problem doesn’t seem to be letting up any time soon. The government and private lenders have the authority to issue a wage garnishment that will go on your record and hinder your livelihood.
What is Student Loan Wage Garnishment?
A wage garnishment is an official notice sent to your employer on behalf of your lender or the IRS. The notice informs your employer that they are obliged to siphon some of your income toward the debt that you owe. If you just received a notice from your lender or the government warning you of a wage garnishment, you need to act fast. A lender or IRS wage garnishment is a serious matter that puts your financial future at risk. The institution must always give you thirty days to respond before officially seizing your funds, but if you fail to respond the government or private lender can issue a strict hold on your income and assets to pay off your debt.
Wage garnishments don’t come from out of the blue. If you just received notice in the mail explaining a wage garnishment, then you have already defaulted on your student loans. Lenders will contact you through email and paper mail urging you to make payments. For federal loans, you are considered to be in default if you’ve failed to make a payment for at least 270 days. Default for your specific loan may be different depending on the lender, so you should do your research before you respond. Find your loan’s default rules by reading the promissory note that you signed when you took out the loan.
Even parents of students can get in trouble. If you, your parent, or any other authority cosigns for a loan, that person is also responsible for repayment. When you receive a wage garnishment as a cosigner, it’s important to speak to your child and make sure the statement is correct.
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Halt Your Student Loan Garnishment Today
Community Tax has proven expertise working with our clients to help resolve their wage garnishment issues. We know that student loan debt is a crushing burden and we want to give our clients the confidence and reassurance that they can pay off their student loan debt with a practical strategy that works. We examine our client’s issues on a case-by-case basis to give them a perfectly tailored plan that suits their budget.
As tax experts, our biggest advice is that you act as soon as possible. The sooner you respond to your notice of intent to garnish, the quicker we can resolve your debt, minimize penalties, and maintain a clean record. When presented with a wage garnishment, many people feel too intimidated by the big lenders to be proactive. Doing so won’t make the problem go away–it exacerbates the problem and adds anxiety and stress. Ignoring debt issues triggers problems in relationships, physical illness, emotional fatigue, depression and even professional strain. Without a solid finance plan, many people sink deeper into their debt by not responding or they bend to the will of the lender without knowing their options. People who fail to respond and meet payments face dire consequences that can have an impact on their financial future for years to come.
It may seem intimidating at first, but institutions are willing to help you make your payments to the best of your abilities. Whether you’re satisfying a loan from a private lender or you’re negotiating with the IRS, staying in contact with your institution will keep you informed of your best options. Hire a professional from Community Tax, and we’ll help you navigate the process to resolve your garnishment and get you back on the right financial track.
Our team of IRS lawyers has decades of combined experience in the field of student debt consolidation. After consulting with you, they will quickly assess your situation and determine the best method of action. We help you from the very beginning by discusses your status and answering any questions you may have about your garnishment. Lenders typically make their terms clear, but the financial jargon can make understanding it difficult. We are more than happy to help break down the concepts and demystify financial terms that can bog down our clients. Leave it to us and we’ll sort through all of the information and streamline the process with no hassle to you.
The tax attorneys and CPAs at Community Tax are here to provide only relevant information to you to reassure you that you are in good hands. We are here to aid you with tax relief help and answer any questions you may have. Our goal is to not only represent your case and provide a plan of action, but also to educate you and give you the tools so that you may avoid more financial burden in the future. We encourage you to remain compliant with the institution you owe payment to until they approve our proposal. Additionally, working with Community Tax professionals to resolve your tax problems can provide you with the assurance that all the necessary steps are being taken to fix your case correctly. Our Community Tax CPAs, tax attorneys, and enrolled agents are eager to work one-on-one with their clients to ensure that their case is simplified. Our qualified team of tax and finance professionals will work diligently to find you a plan that works
Our IRS Lawyers are Ready to Help
At Community Tax, we don’t believe that our clients should have to pay through the nose to get the services they need. Our licensed team of tax attorneys, CPAs and enrolled agents are here to help you within your budget. We’re proud to differentiate ourselves from other companies with a comprehensive payment package. Other companies charge outrageous fees and steep hourly rates for their services, and this can cost a client thousands of dollars in just a short period of time. This can deter many people from hiring a finance professional to begin with and worsen their chances of digging their way out of debt.
We recognize that tacking on fees and charging high hourly rates is unrealistic for most people’s budgets. That’s why at Community Tax we charge one flat fee for our initial services. Our team will come together and analyze your situation from every perspective to come up with the best resolution that gets you out of your wage garnishment fast. We are dedicated to providing effective and affordable service that doesn’t break the bank. That means you won’t need to keep track of your hourly pay or be surprised by hidden fees.
Community Tax is your stop for professional tax and garnishment help. Our diverse group of public accountants, enrolled agents and tax attorneys will work closely with you and tailor a payment or resolution plan according to what you need.
How We Stop Garnishments for Student Loans
Garnishments can be settled in a variety of ways. Our tax lawyers have experience settling a wide variety of tax and student loan related issues. We know that there are ways you can pay your loan in a reasonable manner without breaking the bank. Below are just a few ways we can make that happen.
Win a Hearing
If you have a discrepancy with your garnishment or you believe you’ve been garnished unfairly, we can schedule a hearing to make your case. At Community Tax, our team of dedicated tax lawyers have the ability to represent you on your behalf in the court of law. If your case is a success, we can help reconcile your debt or even obtain student loan debt forgiveness.
Consolidate your Student Loans
Loan consolidation is the most common solution to relieving student debt. Consolidation occurs when all individual student loans are combined into one loan from a single lender, which is then used to pay off the debt of all your loans. Should the lenders agree to student loan consolidation, you have the opportunity to propose alternative payment plans that make paying the debt more manageable. Consolidation loans are typically available for most federal loans such as Stafford, PLUS, SLS, FISL, NSL, HEAL, Health Professional Student Loans, Guaranteed Student Loans and Direct Loans. In some circumstances, some lenders may offer private consolidation loans if you used private education loans.
If you have multiple loans they may have different interest rates. If your loans are consolidated, than the new interest rate is a weighted average that is in between the two. This doesn’t mean you always get the lowest interest rate, but it does mean that it will be lower than your highest interest rate. You can always count on the interest rate to remain fix over the lifetime of your loan. There’s also no cost to consolidate your loan, which is a huge relief for those living paycheck to paycheck.
Parents and students alike are allowed to consolidate their education loans, but they must do so separately. Students are able to consolidate their loans only during the grace period before mandatory payment of after the loans enter repayment. If you’re in default but you enter an approved repayment agreement, you may also consolidate your loans.
Consolidation loans are ideal if you need to reduce the amount of your monthly payment. This is because consolidated loans permit an extended payment term beyond the 10-year repayment plan that is the standard of federal loans. Depending on the amount you owe you can extend the payment period to anytime between 12 to 30 years. This is convenient for some borrowers, but be aware that extending the repayment term of a loan increases its amount due to the interest it accrues over time.
You don’t need to pick a different payment plan. In fact, adhering to the 10 year plan is best if you can afford it. Avoid paying more through accrued interest by reducing your repayment timeline.
Federal loan consolidation is often the best and easiest to achieve option for debt sufferers. Let our professionals at Community Tax find a consolidation repayment plan that helps you manage your debt without jeopardizing your livelihood.
Note that loan consolidation is only an option if you’re not in an active dispute regarding your repayment. Once you resolve the dispute, you can consolidate your loan.
Looking to consolidate your student loans?
Our experts at Community Tax can help determine the best plan for you.
Student Loan Rehabilitation
Loan rehabilitation is a one-time opportunity for a student or parent to clear the default on their defaulted federal education loan. Should you default again after getting cleared the first time, you won’t be able to rehabilitate the loan again.
Getting your loan rehabilitated is an essential step to clearing yourself of a loan garnishment. Once you’ve managed to make 3 consecutive on-time full monthly payments on your defaulted loan, it will be consolidated. To clear your credit history of a defaulted loan, you need to make 9 out of 10 consecutive on-time payments in full.
To rehabilitate your student loan, you may have to add collection costs up to 18.5 percent of the unpaid principal balance including accrued interest to the remaining balance of the loan.
Create a Repayment Agreement
The repayment agreement allows you to pay back your loan in a manner that works best for your financial circumstances. There are seven popular repayment plans that you can settle for to pay back your loans:
Standard Repayment Plan
As its name suggests, this is the standard plan that you start payment on if you don’t consolidate or find another payment method. This plan applies to all direct subsidized and unsubsidized loans, Stafford loans and all consolidation loans. Payments are always a fixed amount up to ten 10 years, or 30 if your loan is consolidated. All borrowers are eligible for this plan.
Graduated Repayment Plan
This payment too includes all direct subsidized and unsubsidized loans, Stafford loans, PLUS loans and consolidated loans. However, with this plan you start payment at a lower amount and it slowly increases over time. The graduated rate usually increases about every 2 years, and payment lasts up to 10 years (or 30 if you consolidated your loans). All borrowers are eligible for this plan as well.
Extended Repayment Plan
All of the loans included in the Standard and Graduated Repayment plans are also eligible for the Extended Repayment Plan. Payments in this plan may be either fixed or graduated, and payment lasts up to 25 years. Both Direct Loan and FFEL borrowers must have over $30,000 in loans to qualify for this plan.
Revised Pay as You Earn (REPAYE)
If you use this method, your monthly payments will be 10 percent of your discretionary income. Your payment amount due each month is recalculated each year based on your new income and family size. All outstanding debt after 20 or 25 years is forgiven with this plan. Any direct loan borrower may issue this plan, but you may have to pay income tax on the funds.
Income-Based Repayment Plan (IBR)
The benefits of this plan are similar to that of the REPAYE, but with some exceptions. In order to qualify for the IBR Plan, you must have high debt relative to your income, and you must pay within 10 years without extension. This loan is in some ways forgiving, but you’ll pay more over time than the Standard Plan.
Income Contingent Repayment plan (ICR)
This plan allows you to pay the lesser amount of 20 percent of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years. Any outstanding balance is forgiven after 20 years.
Income-Sensitive Repayment Plan
The Income-Sensitive Repayment Plan is flexible to your annual income and extends your timeline of repayment up to 15 years. Lenders may have different formulas that determine your monthly payment.
Hire a wage garnishment lawyer from Community Tax when you’re in danger of getting your income cut to send to your lender. We will help you scrub the garnishment from your credit record and negotiate a payment plan that best serves you.