NATIONAL COLLEGIATE STUDENT LOAN TRUST COLLECTION MATTER
We often write about National Collegiate Student Loans in this blog but
it is usually in the context of a lawsuit or when it is in the judgment
phase. However, sometimes we are retained on cases that are in collection
which are pre-litigation or before a lawsuit is brought. NCSLT is one
of the largest student loan lenders in the country. They pursue thousands
of student loan debtors every year by means of collection, litigation,
and post-litigation judgment enforcement. Pre-litigation collection is
usually the first step for NCSLT to collect on a delinquent or defaulted
private student loan. Usually they will send the matter for collection
to a collection agency like Transworld Systems. The collection agency
will then pursue collection for months or even years before NCSLT will
finally decide to pursue litigation.
Recently we were retained on such a matter where the debtor was in default
on a NCSLT private student loan for $90,000. The matter was sent to collection
to Transworld Systems. The client was being called at home and at work
multiple times daily. The collector was even reaching out to family members
to reach the client. These sort of collection tactics are used to pressure,
scare and embarrass consumers into making payments. In this case the collectors
even gave the consumer an ultimatum of making payments or otherwise face
a lawsuit. Litigation is the next step in these matters but ultimately
NCSLT makes the decision to sue. NCSLT had notice that we were retained
in this matter and decided to settle for $38,000 in affordable interest
free installments saving our client a good deal in principle and interest
as well as potential litigation fees. This decision may have been because
of a cost benefit analysis on behalf of the creditor. Sending the matter
to litigation would mean retaining a collection law firm like Forster
and Garbus which means spending more money on legal fees knowing that
the consumer is going to be defended by an attorney preventing a default
judgment from being obtained. The uncertainty of litigation and recovery
of any money combined with high cost may provide the necessary leverage
to negotiate with a creditor like NCSLT to obtain an affordable settlement
for the consumer which is exactly what we are able to do in most of these
situations.