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Student Loan Refund Garnish


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#1 Futurelawyer17

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Posted 04 February 2013 - 12:20 PM

I am 25 years of age that attend college currently online at ***** University, and I live in Michigan. I have default judgement on a credit card debt from about 4 or 5 years back wasn't able to make payments because of low paying jobs as well college. I received a Garnishment towards my account for $1150 which is the credit card balance but the funds where taking from a week ago Student loan refund. I was wondering can student loan be garnish since its not required as income as well it falls under government benefits as well.

I have contacted the credit card creditor which is a Law firm they laugh at me for asking them about can student loan refund benefits be garnish and decline my payment installment offer as well my economic of hardship form. They advised me its nothing they can due after my bank release my funds to them in 20 days then this will be over. I advised them that these funds are for the college for a balance I have which I wont be able to enroll next semester and they just hung up on me.

I contact my bank they told me its nothing they can do since its not 3 x's behind the account number therefore its not Government protected. They advised me to contact a lawyer to dispute it but I cant afford a lawyer I am a poor college student at the moment. That can't feed my self most times.

Can someone give me some options and also am I right or wrong?

Thank you

Edited by FindLaw_AHK, 04 February 2013 - 01:56 PM.
This post has been edited to remove personal or identifying information. -Moderator


#2 pg1067

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Posted 04 February 2013 - 02:11 PM

I received a Garnishment towards my account for $1150 which is the credit card balance but the funds where taking from a week ago Student loan refund.


Your grammar is rather poor (esp. for a college student), so I want to make sure I understand what you're saying here. I assume that you took out a student loan of some sort, the amount of which was more than you needed for your tuition and other fees. As a result, the amount in excess of tuition and fees was going to be paid to you by the school (not really a "refund"). However, before that money could be paid, your creditor served a garnishment for the money. Is that correct?


I was wondering can student loan be garnish since its not required as income as well it falls under government benefits as well.


Depends on whether my interpretation of what you wrote is correct. It will also depend on whether the college you attend is a public or private institution and the particular type of student loan. If my interpretation is correct, it would not be proper to characterize the money in question as "government benefits."


I advised them that these funds are for the college for a balance I have which I wont be able to enroll next semester


In my experience, federally guaranteed student loans are distributed only at the time that tuition is due and are distributed directly to the school. If this was money that was distributed directly to you, it is unlikely that it was a federally guaranteed loan. If that's correct, than the sorts of protections that might apply to such loans are not going to help you. Again, some clarification is necessary.

In the meantime, I suggest you visit the courthouse where the judgment against you was entered and ask if there are any forms for disputing a bank garnishment. You should also run some google searches on the same subject.

#3 adjusterjack

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Posted 04 February 2013 - 03:07 PM

I interpret your post a little differently.

Wherever the money came from it's already in your personal bank account and it's your personal bank account that got garnished.

So, no, I don't see where any of that money is exempt from garnishment.

You can file a Motion to Quash the Garnishment with the court but I suspect it will be denied and the money will be turned over to the judgment creditor as soon as the 20 days are up.

If that amount doesn't clear the debt you would be wise to stop keeping your money in banks. Use money orders and check cashing places. Otherwise they'll hit your bank accounts over and over again and there won't be anything you can do about it other than filing bankruptcy which is still an option that will stop the garnishment in its tracks.

Warning: Legal issues are complicated. Explanations and comments here are simplified and might not fully explain the ramifications of your particular issue. I am not a lawyer. I do not give legal advice. I make comments based on my knowledge and experience. I guarantee nothing. If you act on my comments without the advice of an attorney, you do so at your own risk.


#4 pg1067

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Posted 04 February 2013 - 04:03 PM

I agree. If this is simply a bank garnishment, it's a pretty easy issue. If it is a matter of you not being able to feed yourself, however, you might be able to get somewhere with that (i.e., a "hardship" exemption).




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