Falling behind on a private student loan can lead to collection calls, a lawsuit, and potentially wage garnishment. However, a private lender generally cannot begin garnishing your wages simply because you missed payments. The creditor typically must take legal steps before it can obtain the authority to garnish your paycheck. Can Private Student Loans Garnish Wages? Yes, a private student lender may be able to garnish your wages, but it generally must first obtain a court judgment against you. Unlike certain federal student loan collection procedures, private lenders typically cannot garnish wages administratively without going through the court process. A lender may file a lawsuit to collect the unpaid balance. If the lender obtains a judgment and satisfies the requirements for wage garnishment under applicable state law, it may then be able to seek an order requiring your employer to withhold part of your wages. How Does Private Student Loan Wage Garnishment Work? Private student loan wage garnishment generally begins after the borrower defaults and the lender pursues legal collection. The process may involve several steps: Default: The borrower fails to make required loan payments. Collection Efforts: The lender or collection agency attempts to recover the unpaid balance. Lawsuit: The […]
