Welcome

Illinois Pauses Wage Garnishment During Virus Crisis

April 24, 2020, 3:50 PM

Virus-related relief from wage garnishments and student-loan obligations recently were announced by Illinois Gov. J.B. Pritzker (D).

Wage garnishments were temporarily suspended during the new coronavirus crisis under Executive Order 2020-25 that was signed by Pritzker.

The order, which took effect April 14, suspended wage-deduction summonses, which are sent to employers and require the garnishment of employee wages to satisfy a creditor’s claim.

The order does not affect child-support obligations.

Separately, loan-relief options with 20 student loan servicers were secured by the Illinois Department of Financial and Professional Regulation, Pritzker said April 21 in a news release.

Relief options that are available on commercially owned Federal Family Education Program Loans or privately held student loans include waiving late-payment fees, temporarily postponing payments for at least 90 days, stopping debt-collection lawsuits for 90 days, and enrollment in a borrower-assistance program.

Because of the Covid-19 crisis, the federal government temporarily suspended until Sept. 30, 2020, wage garnishments for federal student loans. The relief did not extend to federal loans that are not owned by the U.S. government and loans made by private lenders.

Borrowers should contact loan providers regarding the new options for relief, Pritzker said. The federal Education Department’s National Student Loan Data System can help determine the type of federal loans that borrowers have and identify their loan servicers.

To contact the reporter on this story: Christine Pulfrey in Washington at cpulfrey@bloombergtax.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bloombergtax.com

To read more articles log in. To learn more about a subscription click here.