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Will a Head of Household Exemption (filing the Florida Affidavit) protect me from garnishment on a federal student loan judgemen

Orlando, FL |

I have a federal judgment against me for 'educational debt' in the amount of 115,000 usd. It was originally an ROTC Scholarship which they demanded recoupment on, it went into default, and then they got a judgment on it around 2004. It is now being pursued by a law firm in Miami (working for the DOJ / Southern District Federal Court) to collect this. I make $62K per year (have tax returns to prove it), and have a wife (does not work, makes no income) and a five year old son. I have NO real property. I rent. No stocks. Nothing. I live paycheck to paycheck. If they file a writ of garnishment against me (with my employer), and I file Florida Head of Household, will it protect me from this type of creditor/debt (stop them from garnishing). Need a clear cut answer. Opinions seem to differ.

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Attorney answers 4

Posted

Hire an attorney on this one. Opinions differ because there is no clear cut answer on student loans. It varies from fact to fact.

Asker

Posted

Thank you Radha! I have a retained an attorney, he is very nice and (I think) good, but there is SOOOOO much differing opinion on this topic, that I was trying to float this question to the legal community, particularly here in Florida, where Head of Household seems to afford so much protection.

Posted

You have a couple options on this one, and each of them is going to generally involve an attorney's help. At the least, an attorney can help you navigate the complexities of student loans as they are some of the most collectible forms of debt. Depending on whether you qualify for bankruptcy, that could also be a viable option. Not to discharge the student loan debt, but at least to hold them off and allow you to pay them some amount during the bankruptcy which chips away at the balance but doesn't garnish your paycheck.

Posted

The exemptions may be able to protect you from a certain amount of garnishment but possibly not the garnishment completely (i.e. reduce the amount being garnished). However, you may get a better result with representation. You could also consult with a bankruptcy attorney in your area. Although student loans are not dischargeable (in most circumstances, including most likely your case), you may be able to delay them or even get on a payment plan (in a 13). I would try meeting with an attorney to discuss your situation. You can try your local legal aid society, or the orange county bar association for a referral. You can also try the "find an attorney" feature on this site. Good Luck!

The asking of and answering general questions does not establish an attorney-client relationship. Please consult with an actual attorney in your local area before deciding on a course of action.

Posted

You indicate "opinions seem to differ." They should as you have not provided sufficient facts. Was this a Federal Loan or a debt that arose as a result of the ROTC scholarship being withdrawn? Who is it owed to, a school, university. the Fed. Dept. of Education or perhaps a state agency or private lender? The answers to these questions will govern whether the state or federal exemptions (or amount limitations apply). You should also be aware that defaulted federal loans can result in wage garnishments without legal process but you are entitled to a hearing on a number of issues if that happens. I would suggest you contact someone that is knowledgeable in the area of student loans and debt. This may or may not be someone with bankruptcy experience. Good luck.

Asker

Posted

It was a recouped AFRTOC scholarship. Yes. First, recoupement attempted by the DFAS (Defense Finance Accounting Service), then passed to the DOJ to assign it to the Treasury for Offset Witholding on my tax refunds (which have been taken for repayment for the past 11 years), then finally passed on to a collections firm working with the DOJ on this. They reduced it to a judgment in 2004, so now they are (or they seem to be) moving it under the 'umbrella' of fed regulations put forward by the DCIA (Debt Collection Improvement Act 1996) to collect on it and/or possibly garnish on it using dept of treasury administrative garnishment,... BUT, originally they had send letters threatening garnishment up to 25%, which is a garnishment limit I have only seen in the federal regulation found in the CCPA. I have an attorney retained trying to sort it all out, but yes. it is quite messy, because the origin of the debt seems to have given the DOJ/Treasury some thought about just which 'umbrella' of statutes to use to govern its collection execution, and it's hard to come to settlement or payment agreements without making sure that the other side commits to a set of rules first, which is what we are trying to do right now.

Gregg J Ormond

Gregg J Ormond

Posted

It is not a situation I have dealt with before (nor do I imagine many have). I gather you already know that your best bet is arguing that the debt does not fit any of the federal options, then you can claim the state head of household. Next would be the administrative garnishment route where it is capped at 15% but you could ague for less in an administrative hearing based on special circumstances including the unemployed spouse and minor child.

Asker

Posted

Just as an aside, but related to this question, I had asked about the relationship of CCPA to state laws over here on this thread on avvo... http://www.avvo.com/legal-answers/does-consumer-credit-protection-act-wording---15-u-1462525.html Screenshot of the DOJ.GOV's own website (specifically http://www.dol.gov/compliance/guide/garnish.htm ) discussing Title III, Consumer Credit Protection Act (CCPA) - http://mailsecure.us/2013-10-23_15h57_02.png Screenshot of the actual wording of Title III / 307 http://mailsecure.us/2013-10-23_15h52_20.png We're just trying to get a handle on what is possible legally, if in fact CCPA is the 'umbrella' of regulations/statutes being used to govern this reduced federal judgment debt (which is now, apparently, being considered simply a non-tax federal debt, rather than a defaulted student loan - since it was a weird ROTC scholarship financial vehicle before it went into default) And in turn,... if CCPA (since the wording seems to mandate the observance of state garnishment law) can then be used to enforce a Florida Head of Household Exemption Waiver (which I 100% meet the requirements for, the only problem being that it is a state law on garnishment, not federal - so normally a federal statute would just prevail over it - except CCPA seems to indicate differently...) That's the real origin of THIS question here. thnx for all responses, I appreciate everyone's opinion on this matter.

Asker

Posted

Thnx Gregg! I really appreciate your input. My attorney said something similar to what you just commented. We are both looking at these responses though, just food for thought,... in as much as this is a strange (unusual) case.

Gregg J Ormond

Gregg J Ormond

Posted

Federal courts generally apply state garnishment laws for the state in which the court is sitting. To my knowlegge there is no federal garnishment procedure other than an administrative one. So the argument that the state garnishment exemptions should apply coupled with the CCPA's express wording that it does not replace state garnishment law could be a winning argument. Good luck and I would like to hear sometime how it turns out.