Student loans are consumer debts that can be collected like most other debts, but with one twist; government student loans may be collected without a judgment.

Government Student Loans

Unlike private student loans, government or guaranteed student loans may be collected from you without the government or guaranty agency having first obtained a judgment. Collectors on government student loans may (and usually) take the following actions:

  1. Garnish 15% of your wages;
  2. Garnish your federal income tax refund;
  3. Federal benefit offsets such as garnishing funds from social security (but not SSI);
  4. Credit reporting the debt;
  5. Litigation. Once the student loan debt collector obtains a judgment against you, they may garnish even more than 15% of your wages and may garnish your state income tax refund as well. Indeed once the debt collector has a judgment, it can use all the remedies listed below under private student loan enforcement to collect its judgment.

The government student loan collector may turn the debt over to a law firm to obtain a judgment against you. If and when they get that judgment, then they can take the same actions against you as any other creditor.

Private Student Loan Enforcement

Private student loans are like any other unsecured debt that you owe. Hence, before a debt collector can collect on these, it must obtain a judgment against you. Once it has a judgment, it can collect this debt from you using the following techniques:

  • Garnish your wages. In Michigan they can garnishee up to 25% of the net take-home pay;
  • Get a Writ of Seizure and seize your assets. This includes your car, oats, safe deposit boxes, contents of your home, and anything else that the debt collector can find;
  • Garnish the state tax refund
  • garnish your bank account
  • Get an order for you to appear in court to testify as to your income assets and expenses;
  • Get a receiver appointed over you to collect and liquidate your assets.

Other prospect of any these items is not palatable to anyone who opposes student loan, there are defenses and ways to manage the collection of the step from the consumer’s perspective. Please see other articles on this website

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