[Tuffnutz]

My question involves collection proceedings in the State of: New Jersey.

My situation: I owe $35K in Stafford loans, both unsubsidized and subsidized.
I have received correspondence that they will initiate a civil suit against me if I don't pay full amount in 10 days. In the letter, they make it clear that one of the possible outcomes if a court order is entered against me is wage garnishment.

My question is: How can an administrative garnishment be imposed on me if I'm self-employed? What do they do in the case of someone whose income derives from being a contract vendor? (i'm classified as one, for the state of NJ).

I understand that my social security checks can be garnished, once I start to collect, but besides that, what can they effectively do, being that I have no regular wages, no salary, and no employer? (The NJ Dept. of Treasury cuts my checks - I'm a vendor for the state and I provide a service). My work is very up and down - in regard to frequency of work available and amount I'm paid in each check.

Since I'm self-employed, I estimate my fed income taxes quarterly, and I'm fairly able to predict how much I will owe in taxes for the year and so I never overpay and/or receive any tax refunds, so there is nothing to garnish there either.

I'm low-income, and barely can pay the rent, cover my expenses, and put food on the table. BTW, I've been self-employed for about 10 years now, long before I ever got behind and defaulted on my loans.

It looks like besides Social Sec. benefits when I retire, they can't touch me.

Or can they? But how?

Much appreciate any info and help. Thank you in advance.

[LawResearcherMissy]

Or can they?

They can.

But how?

Bank account levy.

[Tuffnutz]

They can.



Bank account levy.

Hi, Thank you for your quick and helpful reply.

Yes, I googled around a bit on the web after posting last night and saw that indeed, they can touch me with a levy.

While I'm not one to intentionally shirk responsibilities when it comes to monies owed, lenders, etc., for the sake of argument, the bank levy problem can be avoided by using check cashing establishments.

And I think for bills and check writing workarounds can be had for these as well.

However, I recognize that this is hardly a way to live. And the government has infinite time (until one's death) to renew its efforts to collect the debt.

As for my situation in particular, I think I may be "collection proof". If I'm understanding it right, if I own no real estate or personal property beyond what I use for my livliood (car, computer, supplies), and I have under a certain amount of cash or income, there is nothing they can do. But if my economic situation improves, then these things can be levied or liened.

[SChinFChin]

I owned a business, I had a women who worked there part time making $60.00/day, 3 days a week. She can't be garnished, because under Federal law, salaries under 30 times Federal minimum wage cannot be garnished.

She has $200,000 in total judgements. Now, if she deposits those $60/day checks into a checking account, the cash can then be seized, so she doesn't.

She cashes her paychecks, at my business, and the checking account is in her husband name only, puts it in there sometimes. She ran up $200,000 in credit card debt under her name only, so assets under her husbands name was never touched.

All creditors can do is send me an information subpeona annually asking about her pay, and copies of her last three pay stubs. She does not own her own home, so there's no home to attach.

Here in NY State, they can take jewelry except your wedding ring, TV sets if you have more than one. Since her husband apparently purchased everything, from what I'm told, they cannot touch personal items either.

She had since retired, and from what I hear, social security checks cannot be garnished, so from what I can see, she's judgement proof.

I got a guy working at the center where I work, has his paycheck garnished, but when he puts his paycheck in the bank, the cash is seized, so he cashes his check at the check cashing place down the street now.

Looks like you'll have to be using check cashing services from here on in. I got one down the street from my office, they appear to be very busy all the time, long lines, so your situation may not be that uncommon.

[mmmagique]

If you are getting paid from a business and they offer direct deposit, you can have it dd'ed onto a greendot card or something similar.

Just a thought.

[Tuffnutz]

Thanks mmmagique and SChinFChin for your info. Greatly appreciated.

Looks like check-cashing establishments from here on out, if I cant work out a deal.

What are greendot cards?

[SChinFChin]

Thanks mmmagique and SChinFChin for your info. Greatly appreciated.

Looks like check-cashing establishments from here on out, if I cant work out a deal.

What are greendot cards?

I was thinking the same.

Direct deposits are done via "ACH" transactions, requiring a "Bank Code", and a "Bank Account" number. When I was an IT guy doing "EDI" transactions, I did the programming for direct deposit transfer of money to and from banks.

I do payrolls now, set up "direct deposit", but have not heard of transferring to any "greendot" card. is it a USA product??