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.