I reside in Wisconsin, and went to WyoTech in Laramie, WY in 2008. I received a personal loan through the school itself for roughly $28,000. There was no grace period. I made a few payments here and there but nothing substantial. The interest rate is 18.9% and I cannot even afford the monthly accruing interest. They have no options for forbearance or deferment because it is not a government loan. They recently called and said they have put my loan into collections, and are going to start garnishing my wages unless I make a $400 a month payment starting with the 19th of this month. I can't afford that. I don't know what to do, and I do not know what my options are. Any feedback would be wonderful. Thank You!
WyoTech is a for-profit vocational school focusing on vehicle servicing and repair and other skilled trades. WyoTech has six campuses. It is a division of Corinthian Colleges, Inc. a publicly traded corporation and owner of Everest College, Everest University, Everest Institute, and Heald College.
On its Web site, WyoTech promises to help its students find grants, financial aid, and loans.
Private student loans define a default as occurring after 120 days of non-payment. Regarding collections, private student loans are similar to unsecured debt. If you default on a private loan, the creditor or collection agency must sue you in civil court. If a judgment is won, the creditor or collection agency can ask to have wages garnished and/or liens placed against properties or financial accounts. The only thing that differs a private student loan from an unsecured debt is the fact that private student loans are not dischargeable in a bankruptcy filing, generally speaking.
Private lenders must file a lawsuit against you and obtain a judgment before they can garnish your wages, so it takes private student loan lenders longer to begin a garnishment than the Dept. of Education to accomplish the same thing. Depending on where you live, private lenders with a judgment against you could garnish as much as 25% of your after-tax wages. However, the amount that can be garnished is specific to your state, so you need to look into your state laws on garnishment to determine how much of your pay can be garnished by private lenders.
Texas and Pennsylvania, for example, do not allow wage garnishment for unsecured debts such as private student loans. To try to stop a garnishment resulting from a private loan, you should contact the creditor to discuss your financial situation and try to negotiate an alternate payment plan. Unfortunately, the creditor may not be willing to stop the garnishment voluntarily, forcing you to explore alternative options.
As mentioned above, private student lenders must use your state's court system to get a judgment, which if granted will allow the lender to get a garnishment, account levy, or lien. You mentioned you live in Wisconsin. To learn more about your rights as a Wisconsin resident, see the Bills.com resource Wisconsin Collection Laws. Readers in other states can find information on the Bills.com Collection Laws page. You must look to your state's laws to learn your rights to defend yourself in a lawsuit. You must also look to your state's laws to learn the limits for wage garnishment, account levy, and lien.
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