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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 92569
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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Customer Question

I had an agreement with FedLoans (who I thought was a branch of the Dept of Ed) to pay off my student loans and they said that would avoid offset of my tax return. I thought they consolodated all my loans as I had asked. They were missing two that were with another company EMCS. Without warning they garnished my tax return (or the Dept of Ed) They were supposed to notify me. The only notice I got was from the Treasury dept way back in August, saying that tax garnishment was a possibility and instructing me to arrive at a satisfactory payment arrangement, which I did, with the only company who had contacted me recently, Fed Loans along with AES, and Performant. AES is the lender, Performant the collection agency and Fed Loans I guess the company that services the loan. Is what they did legal. Other than claiming hardship, is there a faster way to get my money back?


 


TO CLARIFY WHO GARNISHED MY TAX RETURN WAS THE OTHER COMPANY ECMC WHO HAD TWO OF MY 12 LOANS THAT FED LOANS WAS SUPPOSED TO BUT DIDN'T CONSOLIDATE. ECMC DID NOT ADVISE ME OF THE GARNISHMENT. THE ONLY WARNING I GOT WAS FROM THE TREASURY BACK IN AUGUST SAYING I COULD BE GARNISHED. WHEN I SETTLED UP WITH FEDLOANS THEY SAID THEY WOULD BE SUSPENDING THE GARNISHMENT. ECMC AGAIN WHO HADN'T CONTACTED ME IN OVER 6 MOS AND WHOM I THOUGHT WAS JUST ANOTHER COLLECTION AGENCY WITH THE SAME ACCOUNTS, GARNISHED MY TAX RETURN. I'M WONDERING IF THIS LEVEL OF ADVANCED NOTICE COMPLIES WITH THE LAW


 


This is poorly explained. Sorry. Here is the genealogy of my loans:


 


AES via FedLoans via performant 12 loans $22,000 payment agreement spared me offset of my tax return


 


ACS via ECMC $8,600 2 loans, not a peep in a long time, garnished my tax return. Through their own admission only notice was from the Treasury dept back in August saying my tax return COULD get garnished. I didn't know about these guys and assumed the first company AES/FedLoans/Perfromant had all my loans. ACS/ECMC did not follow due process in not advising me of the actual garnishment. 


 


I would rather not have to wait to get my money back thru a claim of hardship. I should think if they took it illegally, I should get it back right away.

Submitted: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

I am afraid that student loans are exempt from the Fair Debt Collection Practices notice requirements and the notice you received from the Treasury about delinquent loans was all that was required and the company ECMC did not have to send notice. Furthermore, it is the federal government and not really ECMC that has the authority to issue a seizure of accounts on student loan debts and as such the seizure was proper, so you would have to argue the extreme hardship I am afraid.

These student loans will be the next major financial crisis in the US (like the housing mortgage crisis) because the government is getting overly aggressive at collection and people like you and even me cannot simply afford the payments in this pathetic economy. However, the government being the backer of these loans still has the powers of garnishment for non-payment on these loans and they technically do not have to give any more notice than you received and if you read the student loan contracts we all signed, you will see that in the contract as well that notice is at the discretion of the lender and we all had to agree to that if we wanted the student loans we needed.

I am sorry, but you will have to pursue this under the hardship angle and I wish it were otherwise for you.




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Customer: replied 1 year ago.

Regardless of The Fair Debt Collection Act or who does the actual garnishment, the law clearly states, the debtor must be receive notice of the actual garnishment 20 days prior and be given an option to a hearing. If not due process was

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your wonderful rating.

We merely provide information on the status of the laws, we do not write the laws or make up the facts of your situation I am afraid and whether I personally agree with or like the law is irrelevant as my opinion on it, just like your opinion, does not matter to the courts.

If you received notice from Treasury that garnishment could occur if you did not correct the matter, then that was your notice. If you received no such notice, then you have grounds to object to the garnishment. When the bank receives a garnishment notice they are to freeze the account and the bank is supposed to then notify you of the garnishment notice and freezing of the account before they actually take the money and you have 20 days to object. If you did not receive such notice, then you have a right to sue the bank for failure to provide you the notice they received a seizure notice and were taking the money if you did not object in 20 days.
Customer: replied 1 year ago.



Notice of the actual garnishment, not the possibility of garnishment needs to be sent. I did contact the only creditor who contacted me and made arrangements. The one who actually garnished my tax returns made no effort to collect and did not notify me. "Fortunately, the Constitution of the United States provides a general guide to due process protections. More specifically, Congress provided some guideposts when it passed the DCIA in 1996. For example, the administrative offset section of the DCIA provides that agencies may offset debts only after giving written notice of the type and amount of the




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claim, the intention of the head of the agency to collect the claim by administrative offset, an explanation of debtor’s rights, an opportunity to inspect and copy the records of the agency related to the claim, an opportunity for a review, and an opportunity to make a written agreement with the head of the agency to repay the amount of the claim"




Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response.

The bank was supposed to send you notice that someone served them with the notice for garnishment and they were freezing your accounts. Again, if this did not happen and you did not have the opportunity to fight the garnishment because of this then you can pursue the bank for not providing the notice. If the agency did not tell you garnishment was coming and the type and amount of the debt, then they would be included in your suit as well. However, you would end up still having to sue to recover the money, because the student loan agencies are not going to just return your money because you tell them you did not get the notice, you have to prove no notice was sent.

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