In the state of MA, how much of my paycheck can be garnished if I've defaulted on more than one student loan?
Question Details: I have private education loans with 3 different loan companies, and the minimum payments consume nearly 70% of my take home salary. So obviously, I can't pay. I understand they'll ruin my credit (which is already ruined), and can take my assets (of which I have none), but is there a limit to how much they can take from my paycheck? Also, if the first creditor takes a garnishment, what happens to the other creditors? Do they just get nothing? I know I can't declare bankruptcy in this situation. Are there alternatives?
Bankruptcy Law Answers
Under federal law, the collective amount that can be garnished is 25% of net income. There are exceptions - more for child support; less for low income. My understanding is that Massachusetts follows federal law.
What you should do now is to speak to an attorney about your situation. See if you qualify for legal aid services or see if there is a law school nearby to where you live; they typically run free/low cost clinics that handle these type cases. Also, contact the local Bar Association in in your county. They may have a list of attorneys who will take your case "pro bono" (for free).
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