What to Do (and Not Do) When Being Sued for Student Loans

A few things have changed since my last article on being sued for student loans. As many of you know – or should – the federal government is suing Navient over its mishandling of student loans. The company handles in excess of $300 billion in private and federal loans and handles one in four student loan borrowers. The Consumer Financial Protection Bureau alleges widespread misdeeds and systematic failure that echoes the mortgage crisis of the last recession. The company is accused of enriching itself at the expense of customers who were often burdened by their student debt. Indeed, the company did not place borrowers in income-based repayment plans for federal loans that could have substantially lowered their payments, and urged their agents to enroll borrowers in more profitable repayment plans.

However, it’s too soon to judge just what effect this will have on student loan holders, and all this does not put a stop to legal activity against borrowers who are in default or being sued by a debt collection company. In fact, it complicates matters substantially, especially when you factor in other bad actors who offer – often for an upfront free – to help you with your student loans. When it’s late at night, and your debt worries are keeping you up, ads saying “Congress approves student debt relief!” or “President Trump’s student debt relief plan!” can actually look like a pretty good deal – they are not. Desperation and lack of sleep never helped anyone to make a good decision. Here are some dos and don’ts that will help you if you have received a notice that you’re being sued.

1. Do not ignore the summons. If you do not respond or show up in court this can lead to a summary judgment in favor of the collector.
2. Get all of your loan paperwork together and take a good hard look at your status, whether you are delinquent or in default, or if you are paid up and on time. If the creditor agency is trying to collect on a loan that is paid up and on time, you will need to document that. If you are delinquent, catching up and getting into a different payment plan is your best option.
3. There are a number of defenses to repayment, including the creditor waiting too long to sue you (for private student loans), or cannot document their right to collect.
4. Hire a very good lawyer – me.

One of the things that these collectors are counting on is that you will be shocked and scared into making a bad decision. You need an attorney who is going to be on your side and can help you both with the lawsuit, help you figure out your options for repayment, and get you back on sound financial footing. Whatever your situation is, our attorneys and staff are here to help you. We are open seven days a week in West Palm Beach and Fort Lauderdale, and your first consultation is free.