Legal Question in Credit and Debt Law in Pennsylvania

I live in PA, I am married, my husband and I just bought our first home last year, we just bought 2 cars that has both our names on the title and we still owe 4 years on the loan. I don't have a bank account-I use my husbands. I owe 192,000 in student loans. I pay 65 to AES each month and 240 for federal loans serviced by Sallie mae. My private loans are at $1,500 a month which I can't afford so I stopped paying. Pa law does not allow wage garnishment and our deed to the house states that we own the house as tenants in the entirety. It is a 30 year mortgage. What legally can happen to me? Will I be sued and how will Sallie Mae try to get money from me? Should I try bankruptcy or just do nothing. Of course I want to pay it but I don't think "good faith payments" exist anymore and won't help me any? Sallie Mae so far has been unwilling to work with me on a payment that I can afford.

Asked on 7/31/13, 11:01 am

1 Answer from Attorneys

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Yes, PA does not allow wage garnishment but student loans are not ordinary debts. If they are public (through the US DoE) then they can garnish your wages without even going through a lawsuit. They can garnish up to 10% to 15% of your pay. Private student loans are also subject to garnishment.

42 Pa.C.S.A. 8127 Personal earnings exempt from process

(a) General rule and exceptions.--The wages, salaries and commissions of individuals shall while in the hands of the employer be exempt from any attachment, execution or other process except upon an action or proceeding:

* * *

(4) Under the act of August 7, 1963 (P.L. 549, No. 290), [FN2] referred to as the Pennsylvania Higher Education Assistance Agency Act.

If you have this much student loan debt you need to see a bankruptcy attorney. While student loan debts generally are not dischargeable, there is a hardship exception. Some or all of your student loans may qualify.

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7/31/13, 10:07 pm

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