It astounds me that a number of people with student loans are still facing student loan litigation because of their Navient or Sallie Mae student loans. You may have heard about the recent government lawsuit alleging that the largest servicer of student loans routinely cheated their customers out of millions upon millions of dollars. Navient is facing lawsuits from several state attorneys general and a federal regulator alleging that the company handling 300 billion in private and federal loans for over 12 million people that echo the recent mortgage crisis. It is alleged among other misdeeds that Navient failed to steer clients into income-based repayment plans, deliberately misinformed clients, and even refused to release cosigners when qualified.
What to Do?
Being informed that you’re being sued in a court of law is a shock to the system. In some cases defendants are in default or delinquent, in other cases they are spot on paid up and can prove it. Some have been defrauded by their schools, while others have been unable to find employment for various reasons. There are a number of defenses that you can employ, but my first piece of advice is not to surrender and not to settle. If you are defending in an active court case you have a right to copies of the agreements, and to make them prove that they do in fact own the loan that they are attempting to sue you for.
There are also other defenses to repayment that have to do with fraudulent schools – called borrower defense to repayment – and ways to reduce your student debt that will get you out from under the gun. You may be able to qualify for deferment, forbearance, or even student loan forgiveness. Consolidation loans are also available to bundle all of your separate loans into one payment, and can get you out of delinquency or default. Even in a tight situation, you still have options that are open to you.
What Not to Do
No matter what, do not ignore a subpoena. If you ignore subpoena or simply choose not to respond, then the plaintiff can go to court and obtain what is called a default judgment. This simply means that the one party didn’t show up, so the judge only had the other party’s word to go by. This judgment is legally enforceable, and you may not be able to get it overturned once it has been rendered.
If you are facing litigation over your student loans, no matter who handles them or who originated them, you should have an attorney on your side. After all, Sallie Mae and Navient will have attorneys on their side. Get your paperwork together, and call either our Fort Lauderdale or West Palm Beach office. We are open seven days a week and your first consultation is free. We have lots of experience in handling student loan issues, and we can help you in lots of different ways.