Many desperate debt collectors threaten debtors with immediate wage or bank account garnishment as a tactic to intimidate them into payment.  However, it is important to know that debt collectors who threaten to garnish a consumer’s wages, without being entitled to do so are in violation of the Fair Debt Collection Practices Act (FDCPA).  Until a creditor has obtained a judgment against a debtor, the collection agency should not be making threats of garnishment.

In regards to loans issued by or guaranteed by a federal agency, the owner of the educational loan can proceed through an administrative system. The Department of Education obtains Administrative Wage Garnishments (AWG) as a last resort tool.

The Department of Education must send the borrower a notice thirty days prior to ordering wage garnishment. The notice must explain the Department of Education’s intention to garnish; the nature and amount of the debt; that the borrower has the opportunity to inspect and copy records relating to the debt; that the borrower may object to the garnishment to collect the debt; and describe garnishment by voluntary repayment.  The notice must also inform the borrower that the borrower may request a hearing to present evidence and request a ruling on any objection by the borrower to the existence, amount, or enforceability of the debt.

Borrowers who receive a notice of the Department of Education’s intent to garnish wages, still have the opportunity to enter into a written repayment agreement with the Department.

Consumers also have the opportunity to have a hearing to present that garnishment of their disposable income would produce and extreme financial hardship.

The consumer has the right to have the garnishment action withheld by filing a timely request for a hearing, until the hearing is completed and a decision issued.

Employers are prohibited from discharging debtors, refusing to employ them, or subjecting them to disciplinary action due to the garnishment.  Debtors also have the right to ask the Department of Education to provide the employer no more information than is necessary for the employer to comply with the withholding order.

If a debt collection agency is harassing you in an attempt to collect a student loan, you are welcome to contact California Consumer Protection Attorney, Todd M. Friedman at (877) 449-8898 for a free consultation.