Will consolodating my debt stop garnishing
When you rehabilitate a defaulted student loan, there’s a limit on the number of monthly payments you’ll make: 9.
You typically must make 9 monthly payments within 10 months to rehabilitate a loan.1 Meanwhile, your monthly payment can be as high as what your payment would be under the income based repayment program. Lastly, after you make your last payment, your loan will be removed from default status and your credit report will be updated to reflect that status change. Related: Consolidating a loan out of default has several benefits. While rehabilitation takes at least 9 months, consolidation will have you out of default in about 2 to 3 months.
If you’re wondering, you have a financial hardship when you’re unable to: And if those defenses aren’t enough for you, you can also raise any other defense you believe prohibits the debt from being enforced. Bankruptcy is a really powerful option you probably should use only if you have other debt you want to get rid of. When you file bankruptcy, almost all collection activities against you stop.
That means no more letters, no more harassing phone calls, nothing.
Related: How to find out whose garnishing your wages for a defaulted student loan[forthcoming] At some point, you borrowed a federal student loan.
The government, unlike lenders, can garnish your wages without taking you to court. Basically, defaulting on your federal student loans puts you in a terrible spot.
You can: But if the garnishment has already started, you have fewer options.
And most times it will take several weeks for one of those options to stop your wages from getting garnished.
Plus, there’s no guarantee you’ll get out of default. Instead of entering into a voluntary repayment agreement, you can settle the debt. (The other is the next option: consolidation.) Student loan rehabilitation is similar to entering a voluntary repayment agreement in that you’re required to make monthly payments.
From October 2015 until that December, over 6 million in wages were garnished for defaulted student loans. When it did, you either forgot about it or didn’t have the money to pay the bill your servicer kept sending you. And when it went into default, you gave the Department of Education superpowers.
That loan went into repayment some time after you left school.
Related: Information from the Default Resolution Group on requesting an administrative wage garnishment hearing You’ll need to give a reason why you’re requesting a hearing.
The most common reason given is that a student loan garnishment would cause financial hardship to you and your dependents. You may not want to file bankruptcy just to stop a garnishment.