Consumer Protection Law
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Also, I need to know more about why they are saying you did not add a letter. What is your understanding of what was supposed to be the purpose of that letter and why would that allegedly cause the balance to increase by 10K?
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I read everything above, but I still have no idea what your question is for us. Can you please ask your specific question for us?
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They can legally add in interest and legal fees for collection of a loan in default. So you need to get an itemized statement from them to determine what the $10K addition was for to determine whether it was legal or not legal. They must provide an itemized statement to you and if they refuse, then you can actually sue them for not doing so and claiming the 10K was a breach of the contract.
As far as garnishing your wages, under the law, absent written agreement with them to not garnish, once your loan is in default the lender legally can garnish your wages even if you are making monthly payments and if they are garnishing you, then stop the monthly payments, since you have no obligation to make both. Let them take their 15% and get only that and no monthly payment.
Until you get the itemized statement on your account from them, there is no way to know whether or not they are charging you the proper amount on the loan and once you do get it, if they are wrong you would need to prove to them where they are wrong and if they refuse to correct it then you can sue them.
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Unfortunately, when you default on a student loan, these people are ruthless because they do not follow the same rules as regular debt collectors, student loans cannot be discharged in bankruptcy and they are backed by the government. Now, they are not supposed to garnish you except for your "disposable income" meaning after taxes and standard deductions, so you need to inform your employer that if they are taking out before taxes, you would have grounds to sue the lender for improper garnishment since they are not taking into account taxes and garnishing disposable income.
They will not garnish you unless you were initially delinquent on the loan. You had to be delinquent when you entered into the payment agreement and that means you still were in default on the loan. You should not give them access to your bank account and since they are garnishing you already, that is all you need to pay them.