News & Announcements
While news regarding student loan debt is a daily occurrence lately, there are still many things we do not know about how debt is affecting borrowers. There are many who believe that the same amount of student loan debt will impact different types of borrowers in drastically different ways. The individual circumstances of each borrower will dictate how much the student loan debt imposes a financial hardship. Thus, in order to fix the debt problem, we must focus on lending practices and recognizing high-risk borrowers. However, if you are already struggling to repay your loans, the legal team at Leiderman Shelomith Alexander + Somodevilla, PLLC, can help you create a strategy to deal with all types and sizes of student loan debt, based upon your unique circumstances.
Although the federal government has numerous collection tools that can be implemented without obtaining a court order, lawsuits against student loan borrowers still occur. Of course, lawsuits are the primary tool that private lenders use to collect defaulted loans. It is common for both the government and private lenders to retain debt collection agents to pressure borrowers into paying.
With student loan debt being a primary concern for a record number of graduates, the debt settlement industry is seeing a green light for making more money. If you are seeing offers such as “all of your student loan debt can be eliminated or forgiven,” it is likely a scam.
There are several serious consequences that can occur when you default on your federal student loan. One tool commonly used by the Department of Education (or a guaranty agency) to collect past due amounts is an administrative wage garnishment, which allows the government to garnish your paycheck without obtaining a court order first!
If you are expecting a tax refund and you are in default on your student loans, the government will likely intercept the amount owed to you and apply it to your debt. The government has the ability to offset defaulted federal student loans against federal income tax refunds without first obtaining a court order.