Okay. So I’m 30. I recently quit my full time job, yes I know foolish, spare me the ridicule. I have no money, I was going t to withdrawal my 401 K because I’m going to need the money. I have around $30,000 in student loan debt. I haven’t been paying nor have I really paid aside from my tax returns getting confiscated the past two years. I was wondering, if I decide to get a check sent in the mail, is there any way the IRS, Department of Education can take all of my money or more than the 20% that I’m already aware of? I was really worried I will try to go through with this only to get another letter in the mail stating “Hey, sorry but you owed us so we took all of you 401 k.” Has anyone ever dealt with this?
I don’t know your situation, but don’t ever just ignore debt.
Student loans cannot be discharged.
If you have financial problems you could have contacted the loan servicer and asked if your loan repayment can be deferred or if you can set up lower payments.
But by just not paying you caused a situation where your tax refund is being garnished.
And interest is building up.
What are your goals? The 401k money is not going to last forever. You need another job so you have money to live on and to pay back your debt.
Sorry I don’t know what will happen to the 401k money, are your bank accounts being garnished as well?
http://www.bankrate.com/finance/college-finance/what-to-do-when-you-can-t-pay-student-loan-1.aspx
helpful advice about student loan debt troubles
Apparently, I was incorrect. I just checked my aid summary. The outstanding principal is $17,680, the outstanding interest is $2,843. I currently don’t have a bank account.
The amount withheld may not be enough to cover federal and state income taxes AND the early distribution penalties, so you could end up with even more debt problems.