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Lawsuits are scary, especially when you are being sued by a company you are unfamiliar with that alleges you have defaulted on a student loan and owe thousands of dollars in principal, interest, penalties, attorney’s fees and costs. Many times, the amount claimed is much higher than your original student loan balance. To make things worse, the company suing you has an attorney which puts you at a distinct disadvantage.
To avoid entry of a default judgment against you, the key in such a situation is to have a plan of action that calls for you to organize, evaluate, and appear.
- Organize – Pull copies of your loan documents, including your original promissory note, your payment records, and all correspondence between you and the lender or its servicer, including any notice you may have received regarding the transfer or sale of your promissory note from one lender or entity to another.
- Evaluate – Review your assembled documents for important information like the date and amount of your last payment and who the payment was sent to; demand letters that will indicate whether you received formal notice that your loan was in default or if the entire loan balance was accelerated; the original date your loan was taken out and its maturity date, i.e. when the last payment is due under same; and the name of your original lender and any notices of a transfer of your loan to a new lender or business entity. The above information is crucial to determining whether the party suing you has legal standing to enforce the terms of your loan agreement, and whether the statute of limitations has expired meaning your lender is out of time to sue you for damages. If you are unsure of what to look for, consider hiring an attorney with experience defending student loan lawsuits to fully assess your options.
- Attend – Pay attention to all hearing notices and the court’s preferred method of appearance as many courts now conduct hearings via phone and will provide calling instructions for your hearing. If you fail to attend a scheduled hearing, it is very likely a default judgment will be entered against you for the entire amount claimed in plaintiff’s petition which then opens you up to garnishment of your income and entry of a judgment on your credit record. Even if you are still unsure of whether to contest the lawsuit on your own or through an attorney, the best practice is always to appear at the initial hearing and request at least a 60-day continuance so you can fully evaluate your options.
A a minimum, the above action plan will give you breathing room to determine your next steps, which may include hiring an experienced attorney. Here at the Sader Law Firm, we have significant experience defending student loan lawsuits and we can quickly hone-in on key issues surrounding your loans that can lead to a dismissal of the case or a favorable settlement agreement. For a consultation, contact our firm at (816) 561-1818.
DISCLAIMER: The information contained in this publication is for general informational purposes only and is not intended, and should not be construed, as legal, accounting or tax advice. The author expressly disclaims all and any liability and responsibility to any person or corporation who acts or fails to act as a consequence of any reliance upon the whole or any parts of the content above.
