I Received a Notice of Intent to Initiate Administrative Wage Garnishment

Getting an administrative wage garnishment notice can be stressful. Having your paycheck slashed against your will is frightening. But don’t panic. There are ways to respond strategically.

At Solve Debt Relief, we help people navigate these situations all the time. Handled correctly, you may be able to avoid or reduce garnishment. This guide breaks down your options.

What is Administrative Wage Garnishment?

Administrative wage garnishment (AWG) is when the federal government or a guaranty agency garnishes your paycheck to collect on a debt like defaulted student loans or other agencies like the FTC without requiring a court order.

Private collectors cannot impose AWG. But federal agencies have powers to administratively issue a garnishment order requiring your employer to deduct payments each pay period.

Key Facts About Administrative Wage Garnishment

• Applies to federal and guarantor held debts
• No court order required
• Up to 15% of disposable income garnishable
• Continues until debt satisfied
• 30-day window to request hearing

AWG can seriously impact your finances. But taking quick action provides opportunities to fight it.

Notice of Intent to Initiate AWG

Before issuing a garnishment order, federal agencies must send borrowers a notice of their intent to begin AWG. This letter:

• Identifies the debt and current balance
• Explains the agency’s right to garnish your wages
• Describes the garnishment process
• Provides a 30-day window to challenge the garnishment

Carefully reviewing this notice identifies your options. Timely responding is imperative.

How to Respond to the AWG Notice

You have three main options when responding to an AWG notice:

1. Request a hearing
2. Agree to a voluntary repayment plan
3. Apply for loan rehabilitation

Each path has pros and cons to weigh carefully when deciding how to respond.

Request an AWG Hearing

Within 30 days, you can formally request a hearing challenging the planned garnishment. This pauses collection until the hearing outcome. Potential hearing arguments include:

• The amount claimed is incorrect
• The debt is invalid or not yours
• Garnishment would cause financial hardship
• You are already making voluntary payments

Submit evidence supporting your claims. The hearing officer then issues a written decision agreeing to garnishment, rejecting it, or proposing alternatives.

Enter Voluntary Repayment Agreement

Rather than wage garnishment, you can voluntarily make affordable monthly payments based on income and expenses. This avoids the 15% wage hit.

Drawbacks include accruing collection fees and payments extending for years. Weigh the costs of this option carefully.

Apply for Student Loan Rehabilitation

If trying to resolve defaulted federal student loans, loan rehabilitation may be an alternative. This involves agreeing to 9 monthly payments over 10 months based on current disposable income.

After successfully completing rehabilitation, the loans return to good standing, removing AWG eligibility and re-opening access to benefits like deferments.

What to Expect After Responding

The agency reviews your hearing request, repayment proposal, or rehabilitation application and issues a written decision either approving or denying the request. If approved, the proposed resolution goes into effect. If denied, the agency proceeds with imposing the AWG order.

At this point, your main option is filing suit in federal court seeking injunctive relief. However, legal challenges to AWG are very difficult.

How Administrative Wage Garnishments Work

If AWG goes into effect, here is how the process typically works:

1. The agency contacts your employer ordering garnishment
2. Your employer must deduct up to 15% of disposable income per pay period until the debt is paid
3. Disposable income excludes taxes, social security, disability insurance, and other mandatory deductions
4. The garnishment order has priority over other debts you may owe

AWG continues until the federal debt is paid in full, although the percentage garnished can be adjusted in cases of financial hardship.

Avoiding Financial Devastation from AWG

Administrative wage garnishment can severely impact your finances. At Solve Debt Relief, we aim to help you avoid or mitigate the damage through strategies like:

• Negotiating affordable payments – Voluntarily pay what you can reasonably afford.
• Disputing invalid debts – Raise defenses contesting the garnishment validity.
• Seeking loan rehabilitation – Cure student loan default through nine timely payments.
• Asserting hardship – Provide evidence that garnishment would cause serious financial difficulty.
• Exploring bankruptcy options – In limited cases, bankruptcy may discharge student loans and stop collections.

Don’t let federal agencies devastate your finances through administrative wage garnishment. Contact Solve Debt Relief today to discuss your options.