Recently we have noticed that the debt collection law firm of Houslanger & Associates has been enforcing judgments and collecting debt on behalf of National Collegiate Student Loan Trust, one of the largest private student loan lenders in the country. National Collegiate is also one of the most likely student loan lenders to pursue litigation against consumers and to obtain default judgments against them. Houslanger frequently represents debt buyers such as Palisades Acquisition and New Century Financial Services but now we are seeing a steady influx of National Collegiate cases. National Collegiate loans often originated from First Marblehead Bank and usually land with NCSLT who is similar to the guarantor or insurance company that pays the original lender. They are almost identical to debt buyers and must prove standing in consumer debt cases just like debt buyers.
In our most recent case, NCSLT obtained a default judgment against our client out in Suffolk County. She only found out about the matter while she was in the process of applying for a home and obtained a credit report. She was shocked to learn that there was an open judgment against her for over $30,000. A few days later her personal bank account was levied and over $10,000 was frozen. A judgment creditor in New York is allowed to freeze up to double of the amount of the judgment but in this case, there was only $10,000 in the account. We advised the client to withdraw roughly $2,600 as allowed under the New York Exempt Income Act, to reduce what they were able to levy. After sending Houslanger an Order to Show Cause to vacate the judgment against our client, NCSLT agreed release the bank levy based on our motion and the matter was ultimately settled out of court for 25% of the total amount saving our client a great deal of money.