Payroll took too much money on garnishment...

Hi. I'm looking for advice on my husbands defaulted student loan.

In April 2009, my husband completed 9 months of loan rehab payments successfully for a US Dept. of Ed. loan to DCS collection agency. The agency sent papers for him to sign which he promptly sent back so that his loan could be placed back in good standing and lower payments established. About a month goes by and we hear back from the CA asking for paperwork. We state we sent in paperwork, and CA claims it was not received and possibly lost in the shuffle. We found out just recently that those papers were actually rejected because the CA put the wrong phone number on our paperwork, which was their fault and not ours. This actually came straight from the CA's notes that was read verbatim to me.

They sent new paperwork. We fill out and send them back and again it takes almost a month and we hear back from the CA stating that we were sent the wrong paperwork, they have changed over forms to something new and we needed to resign those. They send new paperwork. We resign and send back.

About 3 weeks later we received a call saying the loan would be dropped if we did not make one more payment. So, we did and all was supposedly well. Lady would be in contact once loan was purchased by the Dept of Education and new monthly loan payments established. Several months go by with no contact from them.

Then, we receive a letter stating we owed back payments and that if we can't pay all the past payments for the equivalent of about 5 months the loan would be repaid through garnishments. Wow, we couldn't believe it. Something must have fell through again. We called to find out that the loan had been dropped. The CA said because the one payment that was still needed for the loan to go through was never received and so therefore it was dropped.

When I argued this and said it was taken out in July and it was on my bank statement. The CA agreed and said he saw it, and it was an error on their part, he apologized and said it was too late to do anything about it now, even after he went to his supervisor. He advised calling the US Dept of Ed and fighting it, because he thought we could win it due to so many errors on their side. However, he was not allowed to give out their phone number.

I found the number for the US Dept of Education, but can not speak with a person. Instead I'm only told by automated service, that we must speak with CA about the debt. We are being sent in circles.

So, then the wage garnishment is started. The first paycheck (paid biweekly) was garnished for $422. His wages before the garnishment is $2000 gross biweekly or $1350 after taxes, health insurance, 401k, and payflex (health insurance). So, even if he was garnished on the gross amount, 15% would have only been $300. We have 3 children, we can not afford these huge amounts.

We called the CA. He assured us it was only a one time 15% payment for the entire month. The next check would not be garnished. Only 1 check a month would be. We just received the second paycheck today garnished again for $422. This is way above and beyond the 15% of the netpay that he promised. I called again and he said it must be the payroll departments fault.

I called payroll and she admitted that she had put the wrong amount in. She had put in 25%. Which still did not make sense because it was more than 25% after taxes. She said disposable income only met after taxes. Not after health insurance, 401k or payflex. So, she refigured the amount and it was now going to be $197 each paycheck. How did she get this new amount? It has to be on his net pay after all deductions. What is real disposable income? After all deductions or just after taxes. She said one then quotes another. I'm afraid to ask her again, in case she does it only after taxes.

How do we recover the overpaid amounts due to the payroll error? She told me there is no way, the CA just gets that extra amount no matter what.

Also, my husband was unemployed from November 2008 through March 11, 2009 due to being fired from his job. Would this qualify for him to have the garnishment stopped and repayment plan established? It seems very unfair that we completed rehabilitation and then because of a string of clerical errors on the CA's part, the loan is kicked back into default status and the garnishment started.

Is there anything we can do? Thanks for any help.

Anne