Providing Debt Relief for Clients Throughout the State of New York

SLM STUDENT LOAN LAWSUIT

Sallie Mae is one of the largest student loan lenders in the country. They lend both federal and private student loans to consumers and then pursue collection efforts when there is a default. They are particularly aggressive when it comes to their private student loans. They pursue collection in-house before sending the matter out to a wide array of collection agencies. Once they believe that collection efforts have failed they quickly turn to litigation. They retain many debt collection law firms in the New York and New Jersey to sue consumers and often obtain default judgments against them. A default judgment then leads to wage garnishment, bank levy, a lien on a property, a substantial negative mark on a credit report and title report which in turn can prevent the purchase or sale of a home in the future. Because student loan debt is usually high in amount, the judgment interest of 9% in New York can quickly accrue on a debt of $50,000 or more leading to a situation where a consumer may be garnished for double or triple of what they actually may have owed.

Our client received a Sallie Mae lawsuit which usually comes in the form of a securitized debt labeled as SLM Student Loan Trust for about $48,000. SLM retained Forster and Garbus, a common debt collection law firm to sue our client. Fortunately, we were able to submit an answer before they could obtain a default judgment against our client. We then moved for discovery requesting all proof that the debt is connected to our client and that the amount has been appropriately accounted for. We specifically asked for all the documents showing how the debt had been securitized and proof showing the proper transfer or assignment of the debt through these complicated channels. Forster and Garbus was able to send some but not all of our requests. Although we felt as though we had a good argument to ask for the court to dismiss the case, Sallie Mae requested a settlement offer of $12,000 to resolve the entire matter. Our client accepted this low offer to avoid any further risk as well as additional fees. This was a remarkable reduction of over 75% off of the entire debt amount.