I have a garnishment for a student loan. The garnishment order is for $37,179.79. The amount deducted since the garnishment began in 2011 is $23,385.97, leaving a balance of $13,793.82 (from payroll dept). I received a letter from the US. Dept. of Ed that they are going to enforce the debt (which they already have by the garnishment.)
So I called them and asked about the letter, and advised them that they had already been receiving payments for the past 7 years. They transferred me to a collection agency, who told me the balance owed is $29,992 due to daily interest being applied. The original debt was $25,000.
My question is this: how much do I legally owe? The amount of the garnishment minus the deducted payments? Or can they continue applying daily interest on top of what they have garnished me for?
I believed that a garnishment order had to be for the total amount owed, and that once satisfied the debt would be paid off.
You are not dealing with any ordinary creditor here; you are dealing with the Federal Government, which will continue to hound you for the valid debt that you owe until they are satisfied that the entire debt plus all the fees and interest have been paid in full.
Having given you the bad news, here is some good news: Based upon these facts and the fact that you have faithfully been repaying the student loan, if you hire a competent lawyer who knows how to ask the government for some amount of loan forgiveness, there is a better than even chance they will consider knocking off some of the late fees and interest charged during the seven year collection period.
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