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Student Loan Wage Garnishment

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  • 10-18-2010, 07:31 PM
    KMS
    Student Loan Wage Garnishment
    My question involves collection proceedings in the State of: New York

    My defaulted students loans were sold to a debt collection agency (no excuses, I take full responsibility). When the collection agency contacted me I tried to set up a payment plan of $700 per month. I was told they would only agree to that plan if I make a down payment of $15,000 (I have more than $150K in loans). They went on to say my only other options were to 1)pay $1,500 per month or 2) they will garnish my wages. I told them payments of $1,500 are not possible; even paying $700 will require sacrifices. They moved forward with the wage garnishment. The amount to be withheld is $275 bi-weekly; which is less than the amount I originally submitted. I reached out to them again to try to make arrangement for $700. They said they were willing to work with me. I submitted all of my financials and they returned with an amount of $1,200 per month – once again this is not possible. They said if I don’t pay the $1,200 they have no choice but continue with the garnishment. Needless to say I’m baffled. They saw all my info and know that $1,200 is an impossibility. They also know $700 is more than they will recover from a wage garnishment. In addition, any tax refund I may get is only a few hundred dollars and certainly not more than the $700 per month vs. $275 bi-weekly. And in any event, I’m more than willing to submit any refund to them. Of course, I don’t want the blemish of a wage garnishment so it’s to my advantage if they accept my offer; however, my understanding is that it’s to their advantage to accept my offer of what comes to more than $100 per month. Any advice about how to move forward?
  • 10-18-2010, 10:27 PM
    KeithDoxen
    Re: Student Loan Wage Garnishment
    I would call the agency again and ask to speak to a supervisor and explain to the supervisor that you are willing to pay them more than they are currently getting from the wage garnishment if they agree to stop garnishing. You are right that it would be silly for them to continue to garnish and actually get less money out of you per month than they would if they accepted your deal. Make sure that they realize that you're not going to be getting any pay increases anytime soon and as such this garnishment is a really bad deal for them. It's possible that the collectors that you've talked to have been low-level employees who are not authorized to accept any amount below a certain number. Or perhaps they're just not particularly bright. Whatever the case, talk to a supervisor. Worst case scenario, they continue to garnish, and you get to keep your extra 100 bucks a month that you were willing to pay them.
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