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Wage Garnishments, Part 2
Do yourself a favor and follow the instructions on this form to the letter. For instance, fill in all lines that request dollar values or other information. If your answer to something is zero, don't just leave the line blank. Insert a zero (0). Also, provide written proof for all the statements you make on the form. If you say your credit card bills are $500 a month, give a copy of your Visa and MasterCard statements. And above all, if you claim any kind of financial hardship due to having kids, or child-care costs, you absolutely must submit a supplemental form called Declaration of Caregiver Services. This form needs to be filled out by the person who provides day-care for your children. That person will have to attest—under penalty of law—that he or she cares for your kids, and that you pay him or her X amount of money on a weekly or monthly basis. Without this important document, all your claims for child-care expenses will be disallowed, so don't forget to submit this form too.
The three-page Financial Disclosure Statement is slightly different than the Statement of Financial Status you submit to the Department of Education to propose a reduced monthly payment that you can afford. But both ask for detailed information about your income and expenses. And both require that you fully document and substantiate all the information you present. For instance, if you say that your rent is $1,200 a month, you should send a copy of your renter's contract or provide the front and back sides of your cancelled checks proving the amount of rent you've been paying for the past several months.
To get the feds off your back in a wage garnishment proceeding, you'll have to be meticulous in your documentation. Don't just send a letter with a sad sob story about how you've fallen on hard times lately. Back up everything you say with cold, hard numbers and written, irrefutable documentation so they know your story is legitimate. Send the Financial Disclosure Statement to:
U.S. Department of Education PO Box 617763 Chicago, IL 60661-7763
When a guaranty agency or the Department of Education evaluates your case, they can use any method they want to determine the validity and relevance of your declarations. Some lending institutions and guaranty agencies rely heavily or even exclusively on your Financial Disclosure Statement. Others, including the Department of Education, rely on an analysis of your situation based on the standards used by the IRS when it evaluates Offers in Compromise proposed by debtors who can't pay their taxes.
In a nutshell, with this IRS-based standards approach, the Department of Education takes a look at your income and expenses, compares them against regional and national averages (obtained from Census Bureau data and other sources), then makes a determination as to whether or not a wage garnishment would cause severe financial hardship to you and your family. How convincing is your argument and how thoroughly can you back up your claims?
Why do I feel this is the critical, determining factor in the outcome of any hardship case presented before the Department of Education? Because they say so, in so many words, right in one of their most recent rule books on the matter. In the October 2004 Department of Education publication called Options for Financially Challenged Borrowers in Default, it states: "A debtor who claims to need to spend more for a particular kind of expense than the average amount spent by families in his or her cohort of the standards bears the burden of persuasion that the added amount is necessary."
This publication, by the way, is a must-read for any of you dealing with defaulted student loans or wage garnishment issues. The booklet comes from the U.S. Department of Education's Borrower Services Collections Group. It discusses the payment terms, refinancing options, and administrative discharge relief available to financially burdened college grads.
Article Title : Wage Garnishments, Part 2
I filed a U.S Departmentent of Ed Fincial Disclosure Statement on April 17,2012. I have not received an answer. What should I expect at this time?
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