Vance P. Truman, Attorney at Law
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Wage garnishment for student loans in Ohio: What you need to know

The human relations director at your work brings you a sealed envelope.

It's not a pink slip, but it also isn't good news: Your wages are being garnished because you stopped making the student loan payment you couldn't afford.

So what does this all mean? Well, your weekly paychecks will be smaller as the lender – usually the federal government -- tries to recoup your outstanding student loan, a little at a time. The garnishment can be 15 percent of your paycheck.

If you have a federal student loan and stop making payments, they just don't go away. Instead, the interest piles up without the balance shrinking. And if you haven't paid for 270 days – nine months – your loan will be considered to be in default. That will affect your credit score – the major credit bureaus will hear about it -- and also lead to the garnishment.

If your loan falls into default, the whole remaining balance, plus interest, becomes payable at once. You also could pay huge collection fees.

Wage garnishment is avoidable, though. Creditors will let you know your accounts are about to head to default, giving you a chance to do something about the situation.

And what can you do to stop the garnishment?

  • Set up automatic payments or electronic reminders to help you make on-time payments on your student loans.
  • Change your payments to an income-driven repayment plan. This will help if your salary hasn't caught up to your loan amount. The repayment amount can be changed to something that better fits your budget.
  • If you've had a medical emergency, lost your job or are facing a financial crisis, you can ask to postpone payments.

And if your wages already are being garnished for your student loans?

  • Consolidate your loans
  • Work with your loan servicer to rehabilitate your loan; the servicer will explain how to do so.
  • Ask a loved one for a loan to pay off the debt.

When you're facing a financial crisis, there is a lot to figure out, and it can seem overwhelming. An Ohio lawyer who works with bankruptcy and other financial issues, such as wage garnishment, can explain your options to you.

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