Our client contacted us after receiving a summons and complaint stating
that she was being sued for over $150,000 by Navient, formerly Sallie
Mae on private student loans that she had take out for medical school.
This is a common occurrence for graduate students from a variety of fields
but happens quite often with doctors as they suffer through residency
on a low beginning salary. As private student loans do not have income-based
programs like federal loans do, the consumer’s option is to either
pay an inflated amount every month or default. Most consumers default
in these cases and then face the continuous collection efforts by Navient
whom retain a variety of collection agencies to constantly contact clients,
their family and their jobs to pressure them into making payments. After
failing to obtain funds through the collection process, Navient then retains
local counsel to sue consumers.
In this case, Rubin and Rothman, a New York debt collection law firm was
retained to sue and potentially obtain a default judgment against our
client. Their goal is always to obtain a default judgment because it is
the easiest way to win and then gives them the ability to freeze a consumer’s
bank account or garnish their wages. In the meantime, 9% New York judgment
interest accrues on the debt so that they ultimately recover even more
money than what was sued for. Our defenses prevented them from doing so
in this situation and forced Rubin and Rothman to agree to negotiate to
a lower settlement amount. We were able to use our legal leverage to obtain
a settlement of $50,000, a reduction of roughly $100,000 off of the lawsuit amount.