It’s no secret that a college education is expensive in Tennessee. The costs of higher education have been increasing throughout the nation for some time. However, for many residents a college degree is the only way to ensure that they can get a job. But, in today’s society, even a bachelors or master’s degree is no guarantee for stable employment. Following the recession, jobs — especially high paying jobs — have been in short supply.

This has left many college graduates unable to pay their student loans. Graduates are forced to choose between paying for their basic living expenses or their student loans. Therefore, the number of defaults on student loans has steadily increased.

When Tennessee residents default on a consumer debt, creditors often have certain remedies they can use to collect the debt. These creditors’ rights do not include the right to harass consumers. However, wage garnishment might be possible.

Wage garnishment occurs when a creditor requires a person’s employer to send a portion of the person’s paycheck right to the creditor. In this case, the consumer never receives the money in the first place. This can deepen financial troubles for consumers since they have even less money to work with each pay period.

According to recent reports, the federal government has started to garnish the wages of more people who are in default on their federal student loans. In fact, eight percent of the 2.5 million borrowers in default were having their wages garnished by the federal government to pay back student loans. This is a significant increase over years past. The federal government can take up to 15 percent of a person’s paycheck — without court approval. The government claims that wage garnishment is only used after 12 consecutive months of non-payment.

Consumers who are subject to wage garnishment or other collection actions by creditors should understand their debt relief options. With the right help, people can reduce their debt and stop creditor harassment.

Source: The Wall Street Journal, “Student Debt Takes a Bite Out of More Paychecks,” Annamaria Andriotis, June 13, 2014