If the payment you skipped for a few months is your student loan, the IRS can take any refund you may be entitled to or the government can take your federal benefits such as Social Security and Social Security Disability Benefits or a private lender or the government can sue you to collect or the government may take “garnish” of your pay check.

The most common is a garnishment from your pay check. The government can take a portion of your wages to up to 15% but not more than 30 times the current federal minimum wage. But you do have some options when dealing with a garnishment which will depend on whether or not you are delinquent with your payments or in default. Default is when you have not made a payment in nine months and the entire loan balance becomes immediately payable.

In most cases, people end up on a default status. A lender can also declare you in default if you fail to meet other terms of the contract for nine months. A delinquency period starts on the first day after you miss a payment. When this happens, the lender has to follow certain guidelines and must at least send one written letter during the first 15 days of when payment was missed and they must let you know about the Student Loan Ombudsman. The Student Loan Ombudsman is available at the Federal Student Aid office of the Department of Education and helps settle disputes and other problems with the student loans. If your delinquency continues for nine months whether or not you reach out to available resources you will be considered in default.

After you are considered in default, the next step is always wage garnishment if employed. If you feel that it is unfair for some reason or there are explanatory circumstances, the first thing to do is write a letter of appeal which, unfortunately, does not work for most people. There are two ways to attempt to stop a garnishment and the best way is to try to contact the student loan collection agency and work out a payment plan to repay over 12 months that you can stick to. And the next thing to do is consolidating any delinquent loans.

If you do get a wage garnishment, many people think they can be fired from their jobs which is not true. An employer cannot legally fire you because of wage garnishment even though it does require additional paperwork or anything else on them. If you do get more than one wage garnishment, for some reason you are no longer protected by law from termination.