Recently, we were retained by a consumer who was sued by Navient, a private
student loan lender, and probably the biggest student loan lender in the
country. The lawsuit against her was for over $120,000 and accruing interest.
Navient retained the debt collection law firm of Rubin and Rothman to
sue the consumer in New York and try to obtain a default judgment against
her which is very common due to poor service of the summons and complaint.
Their goal of obtaining a default judgment or winning the case without
the consumer responding would mean that they could automatically attempt
to enforce the judgment by levying or freezing the client's bank accounts,
garnishing the client's wages or placing a lien on the consumer’s
property. Winning on default is the easiest way for the creditor as they
do not have to litigate the matter on the merits and do not have to spend
much on legal fees.
We made sure to submit and answer with affirmative defenses to prevent
a default judgment against the client within the 30-day allotted period
so that Rubin and Rothman would know that we would be litigating the case.
We also quickly sent our discovery requests and deposition notices to
Rubin and Rothman. The goal of these is to have Navient prove their burden
in court by showing that our client not only owes the money alleged but
that the amount owed is correct. If they are unable to do so then the
case must be dismissed. The proper way to do prove their burden is to
lay a legal foundation by entering all of the evidence in an appropriate
way. Importantly, Navient often refuses to send a representative for depositions
or sends someone who gives very general answers based on a limited knowledge
of these matters. These depositions can be used to ultimately have the
case dismissed or used as leverage to obtain a very low settlement. In
our case, Navient agreed to accept a settlement of $30,000 over a payment
plan of a few years, a tremendous reduction off of the full amount of
the loan as well as the interest that would have accrued on it.