I am self-employed, and do not receive regular wages (if any), as I own an LLC in GA. However, I recently received a garnishment letter from...

Question

I am self-employed, and do not receive regular wages (if any), as I own an LLC in GA. However, I recently received a garnishment letter from the company servicing my student loans, requesting my "employer", which is me, to garnish 15% of my wages. Now I haven't yet made it to a position where I can give myself regular wages, so I'm not sure how to handle this. Clearly the student loan company doesn't know that I'm self-employed. How can they garnish wages if there is nothing to garnish? What are their options in this case? What are my options?

Answer

They can't. There is nothing to garnish. Depends on what they want to do and how far they are willing to go - I guess they could get a charging order against the LLC and direct that any payments to you will be subject to garnishment and it may not be at 15%.

I suggest that you talk to a local lawyer who specializes in dealing with this to see exactly what kind of student loan debts you have and what your options are for dealing with it. Absent hardship, most student loans are not dischargeable in bankruptcy. For federal student loans, there is no statute of limitations so these have to be resolved. They are not going to get any smaller.

Your best bet, rather than garnishment, would be to work out some kind of voluntary arrangement consistent with your finances. The loan servicer probably will want a financial statement from you though.