Courts are coming down hard on private student loan creditors like National Collegiate Student Loan Trusts and wiping away thousands of dollars in student loan debt in the process.
When you take out a private student loan, you’re often borrowing from large banks or other financial institutions. Financial institutions then bundle their loans and sell them to companies like National Collegiate who separate them into different trusts. Trusts hire companies to collect your payments every month, but when the payments stop coming in they will hire debt collection firms like Kramer & Frank and Wetsch, Abbott, Osborn, Van Vliet, PLC to take you to court.
There are 15 different National Collegiate Student Loan Trusts that collectively hold approximately $12 billion in student loans. These trusts bring lawsuits against borrowers who fall behind on their payments. The problem is that they are often missing crucial paperwork that proves ownership of the loan. In each case, the creditor must establish the chain of custody for the loan. If the creditor is unable to do so, courts have been ruling in favor of the borrower. This inability to prove ownership has cost National Collegiate thousands of dollars.
Collecting on a loan that you don’t own is fraud, but that doesn’t mean that National Collegiate will stop trying. Often when borrowers are served with a summons to appear in court over their student loan, they ignore it. The risk is ending up with a default judgment for the full amount meaning possible garnished wages. Creditors often believe that borrowers will just sit back and accept defeat. When the borrower steps up to the plate to fight the alleged debt, it can throw the creditor off base. Specifically, in National Collegiate cases there has been an increase in the amount of cases that have been dismissed or dropped before trial. In many of these cases, there is a strong chance that the creditor can not win without proof of ownership.
Boevingloh & Pliakos has handled plenty of National Collegiate cases out of St. Louis and throughout the state of Missouri. If you are being sued by National Collegiate or any of the Student Loan Trusts, feel free to contact Kris Boevingloh at (314) 989-1492 to learn about what this could mean for you and your student loan debt.