Legal Question in Credit and Debt Law in North Carolina

Garnishment depends upon the law of the state where a judgment is entered. If they sue in NC and get a judgment here, at the present time we do not have wage garnishment. Your social security benefits cannot be garnished. However, if you keep enough money in the bank there is a possibility that your bank funds may not be completely exempt. In addition, there are limits on the amount of other property you may own which is exempt (protected from creditors). If you contact me directly I will refer you to someone in Raleigh who can give you advice about private student loans.

I agree with Ms. Coleman. If the loan was taken out in NC, then the lender has 3 years in which to sue you (the 3 years runs from the date of your last payment or when the latest deferment runs out and the first payment would be due). If a judgment is entered, there is no wage garnishment in NC for private student loan debt. Nor can Social Security benefits be garnished. To collect on a judgment, a creditor must serve you with documents called notice of rights to have exemptions designated and motion to claim exempt property. You can protect bank accounts from levy by exempting them on the form. (use the wild card exemption for that; there is no specific place on the form for that). Do not, however, commingle Social Security with non-Social Security money belonging to yourself or another person. Banks will only protect up 50 60' days worth of Social Security money. That is why you would want to make sure your bank account is exempted if a judgment is entered.. .

Note that the rules are different for a federal student loan. In that case, there is no statute of limitations and your wages or Social Security benefits can be garnished and the government does not need to get a judgment. They have an administrative proceeding. Although Social Security benefits are usually exempt from garnishment, they can be garnished for monies owed to either Social Security or another federal agency or department, like US Department of Education. Also,

student loans, whether they be private or public, are not generally dischargeable in bankruptcy unless you meet the hardship test.