Monday, September 13, 2010

Behind on Student Loans :: What can Happen and What are Your Rights?

Are you behind on your student loans? There are a few things you need to know that could happen in this instance.

Of the major consequences, the IRS can actually step in and use any monies you may have received in a tax return toward the payment of your student loan. They are lawfully able to do this until your loans are paid off in full.

That said, you are free to argue the IRS in their effort to remove partial portions of your tax return, but you must have good reason to earn this right. A helpful resource for obtaining information on your rights is (the official website of the National Consumer Law Center.)

Another possibility when you fall behind on your student loans is that earnings from your paychecks can be garnished. A debtor of a student loan may lawfully garnish up to 15 percent of the wages you earn.

But again, you may fight a garnishment from a debtor. In most cases, the best option for those behind on their student loans is to discuss the issue with the debtor and work out some kind of deal to either obtain an extension or at the very least get the debtor to lower the amount that they are garnishing from your wages.

For help with dealing with student loans in the midst of a personal bankruptcy, contact the offices of Tom McAvity by dialing 503.860.6868 today.

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