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I am going through student loan hell. Trying to consolidate loans and running into walls (repeatedly). I am getting overwhelmed.

Can a debt collector garnish my wage without a judgment?

I am trying to consolidate a loan that has defaulted. It defaulted while in consolidation proceedings. The debt is now owned by PHEAA, a collection agency. Now I'm trying to roll PHEA into the consolidation. PHEAA says they are going to deny my consolidation and issue a wage garnishment. I've checked my credit report and there is no judgement against me.

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    I don't think PHEAA is a collections agency - they are the Pennsylvania Higher Education Assistance Agency; they are likely the original issuers of your loans. (At least they were for me in the early 90s which is why I recognized the acronym.) – Aaron D. Marasco Feb 28 '12 at 1:51
  • ACS originated the loan. PHEA (AES) are the guarantee agency and also acting as collections. – Geo Feb 28 '12 at 1:55
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    PHEAA is also a loan servicer. – duffbeer703 Feb 28 '12 at 2:12
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    I know nothing about the circumstances here, but government loan issuers sometimes have special powers debt collector wouldn't. It may not be safe to assume they can't garnish your wages, especially if they have said they can. – DJClayworth Feb 28 '12 at 4:25
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Debt collectors in general cannot garnish wages without a judgement in court. Student loans (the federally insured ones) are different, however. They (and the IRS) can garnish wages without a judgement. They can also grab your tax return.

However, with student loans you do have a concept of hardship deferral, which can help keep them off your back.

  • A link to a reference saying this would help get an upvote from me. – DJClayworth Feb 28 '12 at 14:15
  • @DJClayworth the rules vary by loan program. There is no single link and the number of links that would be required to be comprehensive would be crazy. There are several other government entities that can get some forms of garnishment with out a judgement. I do think they will have to get a judge to order the garnishment though. – user4127 Feb 28 '12 at 17:11
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No, a collector can only nag till you give up and pay. Some collectors will harass and threaten you which is illegal. The collectors will go to lengths and lie big time telling you they will breach into your house, seize your assets and your XBox, etc - anything to make you pay. All your property and your income are yours until a court decides otherwise.

  • Proven above to be false; PHEAA is a gov't agency. – Aaron D. Marasco Feb 29 '12 at 2:28
  • @AaronD.Marasco PHEAA is a quasi-public entity that is a loan servicer. The originator of the loan is what matters. – duffbeer703 Feb 29 '12 at 3:47
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They can garnish student loans without a court order.

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  • Hi Red, welcome to Money.Stackexchange.com. This answer is really bare, can you beef it up? Also, please take a look at the About and the Help center. – C. Ross Sep 20 '13 at 11:28

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