Sunday, August 31, 2014

Keith Gilabert, "Social Security Garnished by Old Student Loans"

When co-signing for your loved ones student loan keep in mind that the loan is now your responsibility.  Often times co-signers do not believe they will be bothered by a defaulted student loan.  If the loan is issued by the Department of Education it is now considered federal debt that will stay active for up to 20 years.

Here some facts you need to know:

  • In 2013 156,000 Americans social security went towards paying old student loans.
  • It's never a good idea to co-sign for a loved one's loan.
  • When you co-sign for a loan you assume 100% responsibility.
  • Private debt collectors cannot garnish your Social Security.
  • The Federal Government can only garnish Social Security not your personal IRA.
  • Government must give you 180 days notice before commencing garnishment.
  • Maximum amount of garnishment is capped at $750.00 per month or 15% of disposable income.
  • Seek an Income Based Repayment Plan from Department of Education, this could reduce the amount you owe to $0.00.
Here is additional information on student debt.

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