Consumer Attorney Sergei Lemberg Applauds Education Department Mandate for ... PR Web (press release)
Stamford, CT (PRWEB) April 05, 2012
Consumer Attorney Sergei Lemberg ( http://www.stopcollector.com ) applauded the U.S. Department of Education's recent actions regarding student loan debt collection. Late last week, the Education Department said that it would mandate that debt collectors use an income-based formula in collecting payments on defaulted student loans, rather than a minimum payment based on the loan amount. The agency also indicated it would review debt collection scripts and the commission structure it uses with private debt collection agencies.
Lemberg said that these actions, which will likely take effect in mid-2013, will help offset economic conflicts of interest that cause debt collectors to violate the Fair Debt Collection Practices Act by threatening to garnish the wages of those with defaulted student loans . Lemberg said, "While the law says that a court judgment isn't needed to garnish wages to repay federal student loans in default, the debt collection agency is required to provide the consumer with a notice of intent to garnish. We're seeing a disturbing trend whereby debt collection agencies threaten consumers with garnishment if an immediate minimum payment isn't made."
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