I help clients with substantial student loan debt all of the time. Of course, there is nothing wrong with student loans. Financing a reasonably priced good education is a smart life decision. However, what happens when a person defaults on their student loans? And who is the National College Student Loan Trust? Read on to learn more.
Student Loan Debt Default
If a borrower stops paying for their student loans, it is said that the borrower “defaults” on the debt. When a borrower defaults on a debt, the creditor can take legal action against the borrower.
In some cases, a student loan creditor can intercept tax refunds. Or in other cases, the lender will file a lawsuit agains the borrower in state court. If the lender obtains a judgment in court, the lender can garnish wages, place liens on property, and even levy money directly out of bank accounts. This is all true for student loan accounts.
However, as the New York Times recently pointed out, not all student loan debt lawsuits are valid.
Who is the National College Student Loan Trust?
The National College Student Loan Trust is one of the largest owners of student loan debts in the country. Most borrowers have never heard of them before until they run into trouble with their student loans.
As the true owner of the debt, the National College Student Loan Trust should be the party with the authority to actually file a lawsuit against the borrower. The New York Times pointed out that the National College Student Loan Trust has run into significant trouble proving that they actually own some student loan debt.
This gives borrowers an opportunity to contest these student loan lawsuits. Only the true owner of the debt has the ability to file a lawsuit against a borrower. If the plaintiff in a lawsuit cannot establish their ownership interest over the account, they cannot win the lawsuit. That is, if the borrower fights back in court.
What to do if you are sued by the National College Student Loan Trust
If you are sued by the National College Student Loan Trust, don’t panic. As discussed above, you may have some valid defenses against the lawsuit. However, it is important that you take action fast. Most borrowers do not even appear in court in these lawsuits. This means that the lender can win the case automatically.
You should contact a lawyer immediately if you are served with a debt lawsuit. If you wait too long, you will forever lose your right to defend yourself in court.