Can Spouses Wages be Garnished for Student Loans?
Can Spouse's Wages be Garnished for Student Loans?
Marriage often comes with a shared responsibility for each other's financial obligations, including student loans. However, when one spouse fails to repay their student loans, the consequences can extend beyond just that individual. Let's explore the details of how student loan debt can impact a spouse's wages and the rights of all parties involved.
Assuming Responsibility: Student Loans and Marriage
When you get married, you take on the responsibilities and debts of your spouse, including their student loans. This assumes that you are aware of the debts and agree to shoulder the burden together. However, if the spouse who took out the student loans fails to make payments, the consequences can be severe. Courts may permit the collection agencies to garnish the non-student spouse's wages to repay the loan. This can be an unexpected and financially devastating situation for both parties.
Spouse’s Wages Garnished for Student Loans: What You Need to Know
There are several scenarios where a non-student spouse's wages can be garnished to repay a defaulted student loan:
1. When a Spouse Cosigned the Loan
If your spouse cosigned your student loans, the lender can garnish their wages to repay a defaulted loan. This typically requires a lawsuit and a wage garnishment order. The process is similar if you borrowed the student loans during the marriage and live in a community property state. Here, the courts can order the non-student spouse's wages to be garnished for your defaulted loans.
It's worth noting that if you have a joint consolidation loan with your spouse, the federal government can garnish their wages administratively to repay the loan without needing a court order. This means that even non-student spouses can be affected by wage garnishments for defaulted student loans.
2. The Reality of Wage Garnishment
The student loan collectors often use threats to pressure individuals into paying or working through alternative repayment plans. They may claim that they can garnish a spouse's wages, which can be misleading. In reality, only a small percentage of debtors face wage garnishment. According to the Federal Trade Commission, the amount that can be garnished is limited to 10% of disposable income, which can be challenging to collect, especially for recent graduates.
3. The Struggle to Repay and Its Consequences
The story of one woman, who shared her experience of having student loan collectors harass her and her spouse, highlights the potential ramifications of student loan debt. The collectors would threaten to garnish her paycheck if her husband didn't pay the loans. Despite her husband's refusal to pay, the Student Loan Companies continuously insisted on Electronic Funds Transfer (EFT) payments, which she could not comply with due to the limited funds in her checking account. The collectors took an excessive amount, leaving her unable to open a new checking account for several years, damaging her credit score.
4. The Emotional Strain and Beyond
The mental and emotional pressure can be overwhelming. In the case of the woman mentioned, the constant harassment and debt led her husband to take his own life, highlighting the severe impact such stress can have. The struggle to manage finances is not just about the numbers; it's about the human cost as well. Therefore, it's crucial to be aware of the potential consequences of student loan debt and to seek support and advice when navigating such challenges.
Conclusion
While wage garnishment is a significant concern, it's important to understand the full picture. Not all student loan debtors face wage garnishment, and when it does occur, the amount taken is often limited. The best approach is to communicate effectively, seek legal advice, and explore all possible repayment options. Marriage means taking on the financial responsibilities of each other, but it's also important to recognize the impact of debt and to handle it with care and understanding.