Can my wages be garnished if I make payments smaller then the loan company wants?

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Can my wages be garnished if I make payments smaller then the loan company wants?

I lost my job and was unemployed for a year. My student loan is near default. They want over $2,000 for past due payments and late fee’s. I’m now working, but cannot afford the $2,000 they want right now or the large monthly payments. If I send them smaller payments, can they still garnish my wages?

Asked on September 21, 2011 under Bankruptcy Law, Indiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unless you have a written agreement with the lender signed by yourself and a representative of it that if you agree to make monthly payments of a certain amount that there will be no wage garnishment or other forms of levy upon your assets in the event of a judgment against you, the lender (assuming it has a judgment against you) can garnish your wages.

If there is no judgment against you by the lender at this time for your student loan, then you do not presently have to worry about a wage garnishment. A judgment results when there is a lawsuit and a certain party loses and moneys are awarded.

I suspect that the lender is pushing you hard for money up front if there is no judgment against you. I recommend that you try and enter into a written agreement for an amount owed where you make monthly installments that you can afford. Make sure the agreement is signed and dated by the lender's representative if one is reached.

Good luck.


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