Can the govt. garnish wages on a federal loan foreclosure?
Question:
I'm concerned for them that if they ever default on go into foreclosure that the government could garnish their wages until they paid the difference between what they owe and what the government can sell the house for.
Is this a possibility?
Answer:
Well, you might want to look at the actual law that they feds explain on the link provided and see if it applies to your situation
Department of Labor on Wage Garnishment
http://www.dol.gov/esa/regs/compliance/w...
Best of luck to you
it sure is. Not only that, the government could seize bank accounts, and withhold tax refunds.
Yes. I do believe the government can attach wages for defaulting on loans that are financed through the government.
All though they rarely do it as long as you maintain a deffer red or forbearance status with the lender, they are with inn their right to do so and do garnish in many cases. This is on behalf of the tax payers. The government makes grantees to the lenders so they will loan out the money regardless of credit history or age to students struggling to pay their way through college. If it is not paid back, the government is responsible. In fact, student loans, child support and court judgments are usually the only reason your wages can be garnished, but yes they CAN and WILL do it if they have to. But, I can tell you now that I have student loans far beyond my ability to pay the payments and they have been out there for nearly 10 years. But, I keep them in deferred status, I don't hide from them and I keep the lender informed. They are also accruing interest so I'm sure it will be a mortgage payment by the time I can start paying. Once they have finished school, they should consolidate their student loans with someone like Sallie Mae for example and at the lowest rate possible. Then until they are working and can afford the payments, ask the lender about deferment. If possible, they will grant it. Just remember, that doesn't stop the interest from accruing. It just allows you to wait to start paying.
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