Jefferson Capital Systems LLC

Private student loans are a frequent feature on these blogs and they usually consist of the usual suspects such as Navient and National Collegiate Trust. However, there is a different route that original creditors sometimes take with these private student loans and that is selling the debt for pennies on the dollar, usually to a debt buyer. This technique is commonplace in the credit card industry where almost all original creditors decide to sell their debt at some point. Jefferson Capital Systems is a debt buyer for mostly private student loans. We have seen the numbers of these collection actions and even lawsuits rise dramatically over the last year. Frequently, we see the debt collection law firms of Forster & Garbus as well as Ragan & Ragan both collecting and suing on these matters in New York and New Jersey. As with credit cards, they often obtain default judgments due to a lack of service and then are able to freeze consumer’s bank accounts or garnish their wages.

There are multiple reasons for why a private student loan might have been sold to Jefferson Capital or any other debt buyer. The original creditor usually does their homework on the consumer and if they feel like their chances of recovering from that consumer are low because of a lack of assets or income they may decide to cut their losses and sell the debt for less. They still get a huge tax break for taking a loss on the debt so don’t shed a tear for them. Sometimes the debt is actually sold or transferred multiple times from one debt buyer to another. This means that the debt is sold for less and less every time it is transferred. Debt buyers are great news for consumers because they are much easier to defend against as opposed to original creditors who are more likely to be able to produce the necessary documents to show their rightful ownership of the student loan debt. Debt buyers like Jefferson Capital often lack these essential documents to prove legal standing. Thus, it is very important to take an aggressive stance and to keep the burden on Jefferson Capital to prove their case. In a worst case scenario this stance increases the consumer’s leverage in potentially settling the matter for a lesser balance. Debt buyers will likely accept 60%-80% off of the entire balance in these situations.

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