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National Collegiate private student loans
Are you being sued or dunned on a private student loan allegedly held by National Collegiate Student Loan Trust? (updated)
Until 2015, about 125 lawsuits per month were filed to collect National Collegiate Student Loan Trust loans in Cook County alone, with more in other Illinois counties. We defended about 100 of these cases. Most of those we have defended have been dismissed, with or without prejudice. As a result, the filing of new cases virtually ceased.
Recently, National Collegiate trusts have resumed filing lawsuits against Illinois residents.
Some important dos and don’ts with respect to these loans:
DO NOT allow National Collegiate to get a judgment against you by failing to respond to a summons and complaint. National Collegiate has obtained hundreds of judgments against people who did not bother to defend themselves even though they had valid defenses. If you fail to respond, National Collegiate can get a default judgment against you and then garnish your non-exempt wages, seize your non-exempt assets and put liens on your real property.
DO NOT agree to a judgment with an agreement that you will pay a small sum per month for six months or so. At one point, National Collegiate was trying to get people to agree to this. If you do this you have waived your right to dispute the debt and at the end of that period the judgment can be enforced against your nonexempt assets and up to 15% of your wages. Judgments are enforceable for 20-27 years in Illinois, and bear interest at 9%. Some of these agreements don’t even pay the interest on the judgment. Any agreement should completely resolve the debt, with a substantial discount.
DO NOT make the mistake of calling National Collegiate or its attorneys or debt collectors before speaking to an attorney. We will review your documents and facts and consult with you without charge, and advise you whether you have a defense, whether we will take your case and what our fees will be.
DO NOT ASSUME THAT NATIONAL COLLEGIATE IS ENTITLED TO COLLECT without having an attorney familiar with these loans examine potential defenses. We believe that most National Collegiate cases have serious problems with them, for multiple reasons.
- First, we believe that virtually all of the lawsuits filed on these loans are filed in violation of Illinois law.
- Second, National Collegiate sometimes cannot prove that it has the right to collect on the student loan debt at issue. In at least one case, National Collegiate filed suit on a loan that had been assigned to another entity and paid in full to that entity.
- Sometimes National Collegiate cannot prove the amount due. National Collegiate loans are actually serviced by Transworld/ NCO Financial, an organization which has a long history of consent orders and government investigations. Transworld is currently under investigation by the Consumer Financial Protection Bureau; this casts doubt on the accuracy of any records it produces.
- Some suits appear to be filed beyond the statute of limitations. We have obtained rulings that these loans are governed by the five-year Illinois statute of limitations, not the ten year statute as National Collegiate claims.
- The interest rates on some of the loans may be unlawful.
- Finally, we believe that many or all of the obligations of cosigners under these loans may not be enforceable.
We have lots of experience defending claims on these private loans. We have also brought a number of affirmative claims challenging National Collegiate’s collection practices, as both individual and (more than half a dozen) class actions. Many of these collection practices, including many National Collegiate collection letters, violate the Fair Debt Collection Practices Act and other laws.
If you are currently being sued or dunned on a private student loan allegedly held by National Collegiate, please call us immediately.
Also, please send us any collection letters seeking to collect National Collegiate loans. Many contain violations of the Fair Debt Collection Practices Act and other laws.