We are often retained to defend people who are dealing with private student
loan debt and lawsuits against them. Creditors such as Navient and National
Collegiate Trust are two of the biggest private lenders in the country,
and we often see these creditors suing consumers for defaulted private
loans for amounts that can reach over a few hundred thousand dollars.
These lawsuits usually come in the form of a securitized loans such as
National Collegiate Student Loan Trust 2007-4 against the defendant. These
loans are almost always transferred from whomever the original creditor
was and eventually land with the guarantor or indemnity company whose
job it is to try and recoup as much money on the defaulted loan as possible.
National Collegiate will usually send these loans into collection first
using a wide array of collection agencies including common ones such as
Weltman Weinberg and Reis as well as National Enterprise Systems or "NES."
If their efforts to collect fail then National Collegiate will retain
law firms in New York and New Jersey to collect the debt. Forster and
Garbus as well as Rubin and Rothman are two of the most frequently retained
debt collection law firms for National Collegiate matters. The goal of
these law firms is to sue the consumer in order to obtain a default judgment
against them. A default judgment is obtained when the consumer does not
answer the summons and complaint within the time allowed to do so. Often
the reason for not answering is because the consumer is not properly served.
A default judgment can result in a consumer's bank accounts being levied
and their wages being garnished. In more serious situations, a lien can
even be placed against their home. It is imperative to submit an answer
with affirmative defenses to avoid these consequences. Submitting an answer
leaves the burden on National Collegiate to prove their case and leaves
the leverage on the side of the consumer. This leverage is especially
important when attempting to negotiate a settlement with National Collegiate
through Forster and Garbus or other law firms. By aggressively defending
defendants through litigation, we have been able to reduce the loan amounts
alleged to have been owed by up to 80% off. Importantly, National Collegiate
will often agree to give consumers payment plans on settlements that we
have seen reach up to 11 years with no interest. Although a lump sum payment
can certainly help obtain a better settlement, a reasonable settlement
with a long term interest free payment plan can still be obtained and
is often more realistic.