Successful SLM Private Student Loan Lawsuit Defense

Last month we were retained by a doctor who had been sued for multiple Sallie Mae private student loans, commonly labeled on a summons and complaint as, “SLM Student Loan Trust.” He subsequently failed to answer the lawsuits and they acquired over $200,000 of judgment debt against him. The client had just received a wage garnishment notice from Marshal Bienstock stating that 10% of his wages were about to be garnished every pay period. He found himself in the same position as many graduates who are not working and cannot afford their student loan payments. After finishing medical school and while awaiting placement in a residency program, Sallie Mae attempted to collect on his private medical school loans. They didn't offer the client any deferment or listen to his situation. Unfortunately, this is all too common with private student loan lenders. Our client could not pay his bills and after hounding him for months, Sallie Mae forwarded the loans to Forster and Garbus LLP, a New York debt collection firm to begin litigation.

When our office was retained, several judgments were already being enforced against our client and his father who is the co-signer on his loans. When a judgment is entered, it can wreak havoc on the client’s credit, as well as on the co-signer's credit. A judgment may affect whether or not a client is approved for a mortgage, a loan, credit cards and anything else credit approval is required for. Further, the judgment gains statutory interest in New York of 9% annually and is good for 20 years. The Marshall adds an additional 5% fee on top of the balance and interest so the total amount increases.

In this case, we successfully negotiated an out of court settlement for our client. He was sued on 7 different loans for a total of over $200,000. We settled all these loans for $90,000 to be paid interest free over 5 years. This saved our client over $110,000 as well as all of the interest and fees that would have continued to accumulate. We were also able to have all of the judgments vacated so they will not appear on our client's credit reports or any title search.

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