Legal Question in Credit and Debt Law in Virginia
Wage Garnishment
In 2001, I contacted the Dept of Education and made payment arrangements to prevent wage garnishment actions. I was told I had to make at least 3 consecutive payments of at least 1% of the ballance to get my loans out of default, and halt wage garnishment proceedings. Literally 2 days after I made my third payment, I was notified about a wage garnishment that had been put into place. When I finally got hold of someone at the Dept of Ed, by their own admission, that garnishment should not have happened, yet it remained in place. I am currently in talks with Equifax Risk Managemt to try this plan again. I was wondering if I should bother, if I have any legal ground to stand on. My loans, even after my payments and the garnishemnt, are still listed as In Default.
Also, at the time, I was being investigated for a security clearance for my job (Dept of Defense contractor, I needed a Secret Level (or better) clearance. I was denied this clearance, and am currently waiting to find out why it was denied. If it was because of the wrongful wage garnishment, is there any legal action I can take?
2 Answers from Attorneys
Re: Wage Garnishment
Your query assumed that the wage garnishment was "wrongful" without stating any facts legally sufficient to support that conclusion. Unfortunately, student loans are generally beyond the scope of consumer protection laws so Equifax and people like them essentially have a license to lie, cheat, and steal. If you have a written contract, supported by new consideration (some kind of mutual promise, or promise in exchange for compensation) saying that you'll enjoy the new terms you negotiated, then you've got something. But words in the air mean nothing, and are easily denied. The bottom line is that if you owed the money and were in default, then the garnishment was probably not (legally) wrongful, even if they promised you faithfully on their mothers' graves that they wouldn't do it.
The reason you're a security risk is that people who are in debt like that are potential victims of scams and payoff schemes that can make them do things for money they wouldn't otherwise do, or be subject to extortion. One way to deal with that is to get a written agreement between you, the Dept. of Ed. (or their assignee) and your employer to the effect that you won't be in default anymore and that your employer will make regular payments out of your wages by witholding. Be sure to get a lawyer to look at the agreement before you sign it.
Btw, under Virginia law, the garnishment is only as to amounts that are currently held at the time the garnishee is served, it's not a perpetual order of witholding.
Re: Wage Garnishment
Very doubtful. And any further plan that you put
in place to pay off the balance(with or without the help of Equifax RM)will not much ameliorate the adverse notations already on your credit report.
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