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Private Student Loan Lawsuit – Defences & Assistance

Lawsuits for Private Student Loans

Written by Shreya Berry

Shreya has expertise in writing engaging content for the readers and has a deep interest in unique applications of technology in various domains. She has worked closely on projects with Neil Patel Digital, Hindustan Times, News 18 and Shiksha.

November 19, 2020

In federal student loan collection, lawsuits are not very common, but they do happen! It is less likely for the government to sue because it has too many resources to use outside of court to recover student loans. Still, it is an extra collecting power, and the government also uses it. The government refers to accounts for litigation if such accounts meet certain requirements, such as exhaustion of other collection efforts. The government will employ private attorneys to litigate student loan collection cases in some circumstances.

The key litigation instrument that private lenders use to recover private student loan lawsuits. To continue to compel you to pay, the government and private lenders may even recruit collection agencies.

Generally, because you have no defences, even if there is no chance of being obliged to pay a legal judgment, you can not ignore a lawsuit. To work this out, you may want expert support. You can ensure that certified mail is picked up and notices concerning legal cases are accepted.

This does not necessarily imply that you have to settle the loan, even though you lose your case and the government or private investor gets a verdict. The judgment encourages your creditors to continue to recover through special recovery methods. The productivity of these instruments depends on the amount of income and property you have and the sort of income and property you have. Certain forms and amounts of goods, income and properties are shielded from seizure under federal and state law.

If you have been sued, the most relevant methods to remember are:

  • By increasing defences, fighting back
  • Understanding what could happen if your appeal is lost and a decision is taken against you 
  • Checking for extra privileges if you are in the military.

Raising Defenses | Private Student Loan Lawsuit

Winning is the safest way of coping with a lawsuit. You may have a defence to a lawsuit that may be taken in court. Only offering a defence often will cause the borrower to drop the lawsuit. Also, answering a lawsuit is cheaper and faster than beginning your own at a later date.

Common Defenses To Consider – Private Student Loan Lawsuit

  • That money was given by you but not credited to the account
  • That the balance due has been miscalculated by the creditor. The creditor, for instance, maybe demanding attorney’s fees or collection expenses that are too high or not approved by law
  • That the lender is asking more than you have agreed to pay
  • That you have never promised to pay the debt (if, for example, someone uses your name fraudulently)
  • That the debt was issued in the bankruptcy
  • When it’s a private student loan lawsuit, the company has been waiting too long to sue you.

You may also have a defence that there is no enforceability of the loan. Due to forgery, accident, or theft, for other reasons, this may happen. You may also pose a defence in most court actions that a contract is not legitimate, and when you signed it, you were underage. However, this protection is not applicable in collection cases for government student loans.

Some of the defences you can raise are close to the discharges available outside of court on government loans. If you believe that you are fit for a discharge, you can, if possible, get advice from a lawyer and ask the court to postpone the case while applying and waiting for a decision. You do not petition the court for these discharges to be issued. You must apply individually to your loan holder.

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What Happens If The Case Is Lost?

Using a number of approaches, a verdict after you lose a Private Student Loan lawsuit grants the creditor the right to sue you to pay. The court order requires creditors to continue to recover from you by using some special payment methods. How successful these devices are will depend on how much money and property you have.

You are considered “collection evidence” because losing a lawsuit does not harm you. This indicates that your properties and profits are small and shielded from seizure from creditors by federal and state law. Under any scenario, until the financial condition changes significantly, you don’t even have to think about the decision.

If you are challenged with a collection lawsuit, you should know in advance whether you are collection proof.

If you liked this blog on “Private student loan lawsuit – Defences and Assistance” then make sure you check out our other informative blogs linked below!

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