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.