This loan was acquired in the 1980's. I'm just curious as to whether a creditor can garnish non-taxable income, such as Veteran's Benefits. Any help would be greatly appreciated.
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The only way this would be possible is if your student loan is backed by the Government because the Government is the only source that can garnish VA disability or S.S.I.
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All student loans are backed by the govt ! so get ready for your garnishment. Report Abuse
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They can unless your rating is 100% total and permanent.
Your student loan may be discharged (forgiven) if you become totally and permanently disabled. If a physician (doctor of medicine or osteopathy) certified that you are totally and permanently disabled and you meet other requirements during a 3 year conditional discharge period your loan(s) may be discharged. It is important to note that: You may receive Social Security, VA or other disability benefits and still not meet the definition of total and permanent disability that applies to student loan discharges
Federal law authorizes the Department or the student loan guarantor that holds a defaulted loan to collect the debt by non–judicial wage garnishment – a withholding order issued by the Department or the guarantor without the need for entry of a court judgment against the debtor. Prior to garnishment, the debtor must be offered an opportunity to repay the debt voluntarily or to obtain a hearing at which the debtor may object to garnishment either because the debtor believes that the debt is not owed, or that garnishment would cause financial hardship. To avoid garnishment, a debtor must object within the deadline explained in the notice which is 65 days.
Here is a link to download a form for hardship caused by offset. This is used to claim that garnishment would cause a hardship for you and your family.
http://www.ed.gov/offices/OSFAP/DCS/form...
Hope this helps answer your question.
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Call your local VA rep. They will be able to tell you if your VA benefits are garnishable.