National Collegiate Trust New York Times Spotlight

We have been receiving many calls and emails regarding the recent New York Times article discussing private student loans and lenders like National Collegiate Student Loan Trust. National Collegiate Trust is one of the biggest private student loan lenders in the country along with other such as Navient, Discover, AES and Wells Fargo. The article brought great attention to the fact that there are thousands of lawsuits filed against consumers by these lenders. The more frightening fact is that there are thousands of default judgments obtained against consumers whom either do not defend themselves because they do not know how to or because they were never served with the lawsuit which is a common problem in New York. A default judgment then leads to these lenders levying consumers bank accounts, garnishing their wages, and even placing liens on their real property. In New York 9% judgment interest also attaches to a judgment of this kind and because student loans are frequently large amounts, the additional 9% can add a substantial amount of debt.

Submitting an answer with defenses against private student loan lenders like National Collegiate and Navient is the first and most important step because it protects the consumer against a default judgment. Discovery is the next and most critical phase as it is where you find out whether National Collegiate has the documentation or proof necessary to meet their burden in court or whether they can prove their case against a consumer in other words. If they do not have the promissory notes and statements along with essential other forms then dismissal can be sought. There is another critical step however which is requesting depositions so that the agent who has "personal knowledge of the transactions," can be deposed to see if they are able to lay the foundation to have the documents they are trying to introduce admitted into evidence. This is crucial because the lenders will usually have some documents or even most of the documents and state that they have all the proof necessary to prove their case. However, if the agent from National Collegiate or Navient does not have personal knowledge of these transactions then the evidence cannot be admitted under the hearsay doctrine. This is how these cases can be won.

In a worst-case scenario this type of defense will give the consumer enough leverage to obtain a fairly low settlement with fair repayment terms as the lenders would rather not spend the time and money going to depositions and litigating these matters.

Reference: As Paperwork Goes Missing, Private Student Loan Debts May Be Wiped Away

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