United States District Court, E.D. Michigan, Southern Division
ORDER DENYING DEFENDANT'S REQUEST FOR HEARING
RELATING TO GARNISHMENT (Doc. 24)
AVERN COHN, Judge
a student loan case. In 1985, defendant took out a student
loan for $2, 670.00 with an 8% interest rate. Defendant
defaulted by failing to make payment on the loan. Eventually,
the government was assigned the right to collect on the loan;
it filed this action in 2008. Defendant failed to answer the
complaint or otherwise appear.
default judgment was entered against her in the principal
amount of $2, 670.00 plus prejudgment interest in the amount
of $3, 236.77, and costs of $350.00, for a total of $6,
256.77 plus post judgment interest. (Doc. 7). The government
then began collection actions which resulted in the issuance
of several writs of garnishment. Before the Court is
defendant's request for a hearing regarding the
garnishment. (Doc. 24). The government filed a response,
contending that a hearing is not necessary. (Doc. 27). The
Court agrees with the government. Accordingly,
defendant's request is DENIED.
28, 2008, the government filed its complaint against
defendant. (Doc. 1). The Proof of Service shows that
defendant was personally served on July 18, 2008 (Doc. 3).
Defendant failed to file any answer to the complaint. The
government then sought and obtained a Clerk's Entry of
Default (Doc. 6) and a Clerk's Entry of Judgment by
Default on August 4, 2008 (Doc. 7). The Default Judgment was
mailed to defendant, who again took no action.
the entry of the Default Judgment, the government has pursued
collection efforts. On October 1, 2008, it served a Writ of
Garnishment on the State of Michigan for defendant's
state income tax refund (Doc. 10). On December 27, 2016, the
government served a Writ of Garnishment on Chase Bank (Doc.
13). Neither of these garnishments was
received no payments from defendant since the entry of the
Default Judgment in 2008, the government referred the debt to
the United States Department of Treasury for Inclusion in the
Treasury Offset Program (“TOP”), and provided
defendant with notice that it was doing so on October 3,
2013. As a result of the referral to TOP, the government
received payments in 2015 and 2016 totaling $3, 878.00. These
payments apparently came from defendant's federal income
tax refund which the TOP permits.
February 9, 2017, defendant filed a request for hearing (Doc.
24). Defendant says that she has experienced financial
hardship and requests that her 2016 tax refund be exempt from
garnishment. Defendant has also requested that her case be
transferred to Suffolk County, New York because that is where
she now resides. See Doc. 22.
extent defendant objects to prior tax refunds being used to
pay her debt under the TOP program, her objection lacks
merit. Federal law requires any federal agency that is owed a
past-due, legally enforceable debt to notify the United
States Department of Treasury of that debt for inclusion into
the TOP. See 26 U.S.C. § 3720A. In referring
the debt to the Secretary of Treasury, the federal agency
must notify the debtor of the referral and give the debtor
the opportunity to present evidence that the debt is not past
due or is not legally enforceable. In referring the debt, the
agency must demonstrate that it has made reasonable efforts
to obtain payment of such debt.
the government has satisfied all of its obligations under the
statute. It notified defendant of its intent to refer her
debt to the TOP in 2013. Prior to referring the debt, the
government spent five (5) years attempting to collect the
debt from defendant by way of garnishments and state income
extent that defendant is requesting a payment plan in order
to prevent future referrals of her debt to the TOP, the
government says that it is “more than willing to
discuss that possibility with Defendant.” (Doc. 27 at
page 3). As noted in the government's papers, the parties
must abide by state procedures in order to have a money
judgment paid in installments and the record at this point
does not contain sufficient evidence to support an
installment plan. Thus, there is no need for a hearing at
this time regarding defendant's financial hardship.
defendant asks that this case be transferred to New York
where she now resides. As explained in the government's
papers, a transfer is neither required or appropriate. That
said, any communications with counsel for the government or
proceedings in Court may be done over the telephone and the
submission of relevant documents may be done electronically
or via mail. This will prevent ...