Re: Garnishment

Posted by Boadicea (66.149.179.202) on June 21, 2004 at 18:37:03:

In Reply to: Garnishment posted by Wo-dell on June 21, 2004 at 18:14:24:

They can and they will garnish your pay if you don't do something soon. But don't pay the CA one red cent! You would do better to work directly with the Dept of Ed to resolve this.

Normally, it would be better to try to rehabilitate the loan over the course of a year, but you don't have that much time. In rehabilitation, you have to arrange reasonable payments with the CA for one year, after which your loan would come out of default and your credit report would be cleared. But you can't expect the CA to determine what is "reasonable" for you.

If, however, you can handle a full payment for three months (based on the income-contingent plan) to the Dept of Ed, you can stop the CA in their tracks and bring your loan out of default immediately. After the three months, you can change your repayment plan to lower the monthly payment (provided the income-contingent isn't already the lowest monthly payment).

http://loanconsolidation.ed.gov/hfaq.shtml#default

Your credit report will continue to take the hit, but you've probably already learned to live with that.

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