Can student loans garnish social security disability

 

can student loans garnish social security disability

Even though South Carolina does not have wage garnishment , because student loans are usually backed by the federal government, they can garnish your wages. Even if you are filing for bankruptcy or you have already filed, I highly recommend that you either stay on deferment/forbearance or you make your monthly student loan payment. In addition, there have been some recent changes to the student loan programs that you may qualify for. The worst option is doing nothing because like taxes, student loans are not going anywhere!

The leading consumer bankruptcy attorney association (“NACBA”) had an article earlier this year that states…

Florence Bus. & Tech. Center
181 East Evans St.
Florence, SC 29506
Tel: (843) 679-2001
By Appointment Only

Can student loans garnish social security disability

If creditors and debt collectors are hounding you for money, you may wonder: Can Social Security be garnished? The answer is: It depends on to whom you owe money.

Banks and other financial creditors can't touch your Social Security benefits, but when the government is collecting on a debt, those funds are fair game.

The federal government can garnish your benefits for repayment of several types of debts, including federal income taxes, federal student loans, child support and alimony, nontax debt owed to other federal agencies, defaulted federal home loans and certain civil penalties. Supplemental Security Income cannot be garnished under any circumstance.

Even though South Carolina does not have wage garnishment , because student loans are usually backed by the federal government, they can garnish your wages. Even if you are filing for bankruptcy or you have already filed, I highly recommend that you either stay on deferment/forbearance or you make your monthly student loan payment. In addition, there have been some recent changes to the student loan programs that you may qualify for. The worst option is doing nothing because like taxes, student loans are not going anywhere!

The leading consumer bankruptcy attorney association (“NACBA”) had an article earlier this year that states…

Florence Bus. & Tech. Center
181 East Evans St.
Florence, SC 29506
Tel: (843) 679-2001
By Appointment Only

The options available to stop or reduce a student loan-related wage garnishment depend on what kind of loan and where you live. The rules are different for federal student loans, such as Perkins, Stafford,  and PLUS loans, and for private student loans. 

Federal law allows the Department of Education to garnish 15% of a delinquent borrower’s after tax income for federally insured student loans ( 34 C.F.R. Part 34-Administrative Wage Garnishment ). It may do so as long as the garnishment does not bring the borrower’s weekly pay below 30 times the Federal minimum wage. Currently, you are guaranteed that $217.50 ($7.25/hour × 30 hours) per week is exempt from garnishment. (These numbers are current as of early 2014.)

If you make less than that amount each week, then your wages are exempt from garnishment altogether. Unlike other creditors, the federal government has the right to garnish wages, levy bank accounts, and seize property without first obtaining a court judgment against the debtor (31 USC Chapter 37, Subchapter II). Federal agencies may intercept your tax refund, which is called “offset” (26 U.S.C. § 6402(d) and 31 U.S.C. § 3720A). You also can have your income tax refund taken to pay down your student loan debt.

I thought I could do that indefinitely but was told it ran out after 20 years. I have been paying it for the last year but am about to retire.

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Unfortunately if your student loans are subsidized, federal loans, or government backed student loans the answer is your Social Security can be garnished. It's a little fact that trips up a lot of people.