Legal Question in Credit and Debt Law in Pennsylvania

Loan Default and Wage Garnishment

I have a student loan that is in legal collection. I have been making payments to the company for over a year now and it would take 7-8 years of these payments to pay off the loan. I live in PA and they have threatened to garnish my wages if I don't either pay off the loan or continue to make payments but larger amounts. I cannot pay off the loan and am unable to make larger payments. How can I proceed? They have said that they would garnish my check and get 25%of the check. Is this right in PA and if so how do I keep this from happening?


Asked on 8/01/07, 11:35 am

1 Answer from Attorneys
John Gibson John W. Gibson, Esquire

Re: Loan Default and Wage Garnishment

This is a hot issue right now. Unfortunately, it is a difficult one. I'm not sure of what is going on with the student loans but I have been told there are a lot of discrepancies and a lot of overreaching at the national level. They can garnish wages in Pennsylvania for student loans and the effective interest rate of the student loans collected at the national level is at loan shark rates because they are adding collection cost back to principal. I'm not sure if there is anything to do about this because it is my understanding that this may be allowed by the U.S. Code. It is really a bad situation if my information is correct and it may be that the best way out is to borrow the money from another source and pay them off to get out from under it.

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Answered on 8/06/07, 9:26 am


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