Can My Spouse’s Wages Be Garnished For My Student Loans?

Your spouse’s wages can’t be garnished for your student loan debt. Neither the federal government nor a private lender can garnish your spouse’s paycheck to collect defaulted student loans — even if you live in a community property state like Arizona or Texas. Related: Are Student Loans Community Property? Similarly, as long as you're not listed as an owner, your partner’s bank account and home are safe from your student debt. But if you are, falling behind on your student loan payments can jeopardize both. Your lender or a debt collector may sue you. If they win, the judge will enter judgment in their favor. Depending on your state’s laws, the court order may let the creditor seize your joint accounts and place a lien on your home, which can prevent you from selling, refinancingRefinancingTaking out a new private loan to pay off one or more existing student loans, usually to lower the interest rate or change the repayment term. Refinancing federal loans into a private loan eliminates federal benefits like IDR and PSLF., or borrowing a second mortgage. But your spouse’s income is safe. The creditor can’t send a wage garnishment order to their job. Related: Am I Responsible For My Spouse’s Student Loans?

Your spouse’s tax refund can be garnished if you file a joint return

Tax refunds are different. The U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans. can seize the entire federal tax refund if you file married filing jointly. If that happens, all isn’t lost. The IRS has a process that your spouse can use to file a claim with the IRS to get back their part of the refund. Read more about tax refund offset reversal. You could avoid that hassle altogether if you file a separate tax return. But going that route may increase your tax liability and affect your monthly payments under an income-driven repaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. plan.

Your spouse’s wages can be garnished if they cosigned your loans

The only time your spouse’s wages can be garnished for your student loans is if they were a cosignerCosignerA person who signs a loan agreement alongside the primary borrower and becomes equally responsible for repayment. Cosigners are common on private student loans when the student has limited credit or income history. to your private student loans. The lender would still need to sue them and get a judgment before it can garnish their wages. Before that comes to pass, you’ll typically have time to pause payments temporarily with a deferment or forbearance, or refinance to get a lower interest rate and better payment plan. The worst-case scenario? You can always file bankruptcy to stop a student loan wage garnishment. But you’ll need to file an adversary proceeding to get rid of the loans. Related: Can Private Student Loans Be Discharged in Bankruptcy?

Your spouse’s wages can be garnished for their student loans

Your spouse’s wages can be garnished for their student debt if they defaultDefaultThe status of a federal student loan after the borrower has failed to make required payments for 270 days. Default can trigger collection actions such as wage garnishment, tax refund offset, and damage to credit reports.. Federal student loans default after nine consecutive monthly payments are missed. Private student loans default and are typically charged off about 6-8 months after they first become past due. The government can garnish your spouse’s paycheck and Social Security benefits right after they default. Lenders must wait until they get a court judgment before they can garnish wages for private loans. Most companies don’t rush to court right away. They usually send the loan to a debt collection agency to work out a payment arrangement. Here's what to do if you're being sued for student loan debt.

Bottom Line

In conclusion, your spouse's wages can't be garnished for your student loan debt. The only exception is if they cosigned your private loan application. Even then, the lender would need to sue them and get a court judgment first before they can garnish their wages. So if you're struggling to pay back your student loans, you can breathe a sigh of relief knowing your spouse's wages can't be garnished. UP NEXT: Student Loan Forgiveness For Married Couples