Q: Can Reliant Capital Solutions garnish wages for student loans?

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Stanley tate

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Reliant Capital Solutions, LLC can garnish wages for federal student loans that have defaulted.

And they can do so without a court order. But only for federal student loans.

So if Reliant Capital Solutions sent a garnishment notice to your employer and you haven't been sued, then your most likely in default with a federal student loan.

Click here to learn How to Stop a Student Loan Wage Garnishment

Keep reading to find out more about your options to get out of default with Reliant Capital.

Who is Reliant Capital Solutions

Reliant Capital is a private debt collection agency. Specifically, they act as a debt collection agency for the Department of Education.

They are not a scam. But they have a lot of terrible reviews with the Better Business Bureau (BBB).

Most of the terrible reviews are about harassing phone calls and calls to phone numbers the borrower didn't provide.

Fair Debt Collection Practices Act (FDCPA)

Because Reliant Capital is a collection agency, they, like other debt collectors, must comply with fair debt collection practices in collecting defaulted student loans.

They cannot phone you after certain hours. They cannot harass you. They cannot threaten you with actions they cannot take. Contact a law firm that handles FDCPA cases if you believe they've

Why does Reliant Capital have my student loans?

Reliant Capital Solutions collects your student loans because you defaulted.

When you first defaulted, your loan servicer tried to get your loan back into good standing. When that failed, they sent your loans either to the Department of Education's Default Resolution Group/Debt Management and Collections System or the agency that guaranteed your Federal Family Education Loan.

From there, the Default Resolution Group or the guarantee agency tried to collect on your loans. When that failed, your loans were sent to a private collection agency.

I don't know why your defaulted loan was sent toReliant Capital. And in truth, it doesn't matter. Whether it was them or some other private collection agency, they're all similar to work with from my perspective.

Reliant Capital did not buy your student loan debt

Reliant Capital Solutions is not the original creditor for your student loans. Chances are that if they're contacting you about student loan debt, that debt is for a federal student loan. In my experience, I've known them to handle collections for federal loans more than for private student loans.

What are my options for getting my student loans away from Reliant Capital?

The only option you have to get your student loans away from Reliant Capital is to get your loans out of default.

You can get your loans out of default through the loan rehabilitation program or consolidation.

The loan rehabilitation program does not allow you to choose who your loans will go to. That decision will be made by the Department of Education.

A loan consolidation, on the other hand, does allow you to choose the new loan servicer.

So if you had a bad experience with your previous loan servicers before your loans were placed with Reliant, consolidation might be the right choice for you.

Can Reliant Capital Solutions garnish wages?

Reliant Capital can garnish your wages for defaulted student loans.

For federal student loans, they can garnish your wages without a court order by issuing an administrative wage garnishment order.

Before they can garnish you for private student loans, they'll need to sue you, get a judgment, and then get a garnishment order from the court.

In addition to garnishing your wages, they can also send a tax refund intercept request to the IRS.

How to stop a wage garnishment from Reliant Capital Solutions

You have 5 options to stop an administrative wage garnishment from Reliant Capital Solutions:

  1. Pay in full
  2. Negotiate a settlement
  3. Enter into the loan rehabilitation program
  4. Submit a consolidation application
  5. Set up a voluntary payment agreement

Let's go over each one.

#1 Pay in Full

Look, even if you can afford to pay your student loans in full, you shouldn't do so. You'll save more money by negotiating a settlement.

#2 Negotiate a Settlement

Being in default is the one time you can settle federal student loan debt.

While a settlement sounds excellent, the reality is that many borrowers are unable to take advantage of a settlement offer.

Federal student loans do not settle for pennies on the dollar—just the opposite.

With federal student loan settlements, you'll need to have about 85% of the current balance less collection fees ready to pay in 30 to 90 days.

Sample federal student loan settlement letter

Does the government ever accept less than this for settlements? Occasionally. But those types of settlements have happened less frequently under the Department of Education Secretary Betsy DeVos.

#3 Loan Rehabilitation

The loan rehabilitation program is a one-time program that lets you stop a wage garnishment from starting by agreeing to make 9 monthly payments based on either your income or expenses.

The program also lets you stop a wage garnishment after it starts by agreeing to make 9 monthly payments.

Under the terms of the program, the garnishment will stop after your 5th monthly payment. You'll still need to make the 4 remaining payments before your loans are out of default.

Because the rehabilitation program is a one-time program, if you default a second time on the same loan, you will need to choose another option to get out of default.

One benefit of the loan rehabilitation program versus loan consolidation is that the government will waive the collection fees after your 9th payment with the former.

Consolidating defaulted student loans causes the collection fees and unpaid interest to be capitalized.

#4 Consolidation

A Direct Consolidation Loan allows you to combine your defaulted federal student loan with at least one other student loan.

You're eligible for consolidation if you have eligible federal student loans (e.g., a Direct Loan, Perkins Loan, Stafford Loan, etc.), and you're not under an active wage garnishment for your defaulted loans.

If Reliant Capital has sent the garnishment notice to your employer, but your wages have yet to be garnished, you may still be considered to be under an active wage garnishment.

Having said that, I've helped borrowers who move quickly submit their consolidation application and have it successfully processed before the wage garnishment can start.

Click here to learn Should You Consolidate Defaulted Student Loans?

#5 Voluntary Repayment

Entering into a voluntary payment plan before a garnishment starts will stop a garnishment from starting.

That voluntary student loan repayment plan, however, will not get your loans out of default.

It simply stops a wage garnishment from starting.

Because this plan does not get your loans out of default, choose this option only if (a) you need more time to come up with the money to settle; or (b) you've already rehabilitated your loans once before, and you cannot consolidate out of default.

Confirm your rehabilitation paperwork was approved

If you choose the loan rehabilitation program, make sure you sign the loan rehabilitation agreement letter and send it back to Reliant with your proof of income (if they ask for it).

After you submit it, call to confirm they have received it.

And then call again to make sure you have been successfully approved for the rehabilitation program.

I've had clients who told me they thought they were in the program and made several payments, only to find out they were never approved because their paperwork was missing or had been denied.

When will Reliant Capital stop reporting negatively on my credit report?

Reliant will continue to report negatively to the credit bureaus until either your loans are out of default or the Education Department transfers your loans to another collection agency.

Once you're out of default, assuming the payment history for the rest of your debt (credit card, medical, auto, etc.) is good, your credit score should increase pretty quickly.

How to contact Reliant Capital Solutions

Reliant Capital Solutions

670 Cross Pointe Rd

Gahanna Ohio 43230

Dept. of Education: 866-837-5096

www.reliantcapitalsolutions.com

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I'm a student loan lawyer that helps people like you with their federal and private student loans wherever they live.

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