“Why should I worry about the National Collegiate Student Loan Trust lawsuit against me?”
“What is a National Collegiate Student Loan Trust lawsuit?”
It may be that you are the only borrower on the student loan or it may be that you cosigned for your child or your grandchild.
Typically these cases are brought by the law firm of Nathan & Nathan, a well-known collection law firm in Birmingham Alabama.
We also see suits on behalf of National Collegiate Trust brought by Scott & Associates.
This is a lawfirm out of Texas that has an office in Montgomery, Alabama.
While sometimes the amount sued for is only several thousands of dollars, normally these lawsuits are for $20,000-$50,000. Or more.
And you may be sued in multiple cases at one time. It is quite common for our clients to have three or four lawsuits filed on the same day by NCSLT, totaling a $100,000.00 or more.
“So Who is NCSLT?”
NCSLT, National Collegiate Student Loan Trust, is not a company that you ever would have done business with. It is not a company that you borrow money from.
Instead it is a trust, or a legal entity, that claims to now own the student loan that it says you have defaulted on.
“I heard if I don’t answer the lawsuit, I can have a default judgment entered against me. Is this true?”
If you don’t answer the lawsuit, then NCSLT will ask for and receive a default judgment against you.
“So how bad is a default judgment against me?”
A default judgment is very bad. It is a real judgment.
For some reason there are those on the Internet who will say that a default judgment is not anything to be concerned about because nothing can be done with it.
This is false.
If you have a default judgment against you, it will appear on your credit report as a judgment.
Your wages can be garnished at a rate of 25% per pay period.
Your bank accounts can be completely drained through a bank garnishment.
In short, a judgment can make your life miserable and set off a chain reaction of causing you to default on all your other debts, including your mortgage payments and your car payments.
There is a myth that you can only be garnished on your “leftover” money at the end of the month.
Nope — you are garnished first, and then you have to live on what is “left over” which can be very difficult.
So the moral of the story is to not allow a judgment to be entered against you.
“I only co-signed — isn’t my son or daughter the only one at risk in this lawsuit?”
This is a common question we get.
And I certainly understand why this question gets asked.
You did a good deed by cosigning on the loan with your son or your daughter but they are the ones that actually went to school.
They are the ones that actually received the money. Now they are working but they did not pay their student loan.
It seems unfair that NCSLT would come after you, especially when you may be nearing retirement age or have already retired.
We also have the children say to us, “Well it’s unfair for my parents to be sued and I don’t see why they were sued by this company.”
The reason is that if you cosign on this loan, you are fully responsible for it.
Regardless of whether your son or daughter is also responsible.
You are completely responsible for this.
Normally NCSLT will come after you because you have a greater net worth and perhaps more financial responsibility than your child who hasn’t paid on his or her student loan.
In short, National Collegiate Student Loan Trust (NCSLT) is going to go after everybody that it can, and certainly everybody that has the ability to pay or has assets that can be sold to pay this loan.
“OK, I see the danger. What can I do about this lawsuit?”
The most important thing for you to do is to respond to the lawsuit.
Do not ignore the lawsuit.
Instead, file an answer or some other type of response within the time limits.
Normally these cases are brought in Circuit Court.
You have 30 days from the date that you were served to file an answer or otherwise respond.
If you will do this, then you avoid the greatest danger that this lawsuit poses to you.
The vast majority of people never file a response and never challenge NCSLT on whether it is truly the right company to be suing you.
There are many defenses to this lawsuit that you have which may be successful.
But you will never have an opportunity to argue those defenses if you fail to respond.
So file your answer or other response within 30 days.
You can do this on your own or you can hire a lawyer.
Whatever you do, make sure your answer or response gets filed within 30 days.
“What are my options with my National Collegiate Student Loan Trust case?”
You basically have five options.
First, you can look into the option of bankruptcy.
[Note: I find this to be an option that is hardly ever effective but I’ll list it here as you may want to talk to a bankruptcy lawyer about this].
It is very difficult, and rare, to be able to discharge a student loan debt.
Typically you have to be disabled and have a severe financial hardship in order to qualify.
If you don’t have this situation, then you can look at a chapter 13 bankruptcy which is sometimes known as “debtor’s court.” You’ll still be paying the loan but you do so through the bankruptcy court. I don’t see much advantage in this. And you have to go through a life changing event of filing bankruptcy.
Second, you can fight the NCSLT lawsuit on your own.
To be blunt, this will be very hard for you to do as you normally will be sued in Circuit Court.
The defenses that you need to raise, including sophisticated evidentiary arguments, will be difficult to raise on your own in Circuit Court.
However, sometimes this is the only option you have and it is something that you can do, especially if you’re willing to put in a significant amount of time.
Third, you can settle the National Collegiate Student Loan Trust lawsuit on your own, without a lawyer.
You will either need to come up with a lump sum of money or make payment arrangements with Nathan & Nathan in order to settle the lawsuit. If you do payment arrangements, they will want a consent judgment.
That gets back into the problems of having a judgment on your credit report, etc.
Fourth, you can hire a lawyer to fight the lawsuit.
The lawyer will file an answer for you, serve discovery on NCSLT, and challenge this company’s ability to sue you.
The objective with this is to defeat this lawsuit so that you do not owe any money to this company.
You may owe the student loan to some company.
However, this NCSLT is a company that you have never heard of or done any business with so it has to prove that it owns this debt in order to have the right to sue you.
Finally, you can hire a lawyer to help you settle the lawsuit.
Your lawyer can help you to understand what is the lump sum amount that you need to pay or the lawyer can help you to get a reasonable and affordable monthly payment plan.
Most clients who hire my law firm, for example, want us to fight the lawsuit and negotiate a favorable settlement.
These two go hand in hand.
The more that we’re willing to fight the lawsuit, the more willing companies are to make a reasonable settlement.
Of course every case is different and unique but in general we find that this is the best approach.
“How much is this going to cost me to hire a lawyer?”
Rarely do we ever do work on an hourly basis but if we do it is at least $400 an hour.
Most clients, however, prefer to hire us for a fixed amount every month as this is more affordable.
Or, they hire us for a “fixed price” where they know exactly what the amount of our fee will be.
We realize that legal fees are important to you and so feel free to get in touch with us and let’s discuss it.
There are few people who truly want to hire us that are not able to afford to hire us.
If you prefer a cheaper lawyer, we can also help point you to some lawyers who charge less than we do.
“I want more information. What do I do next?”
Give us a call at 205-879-2447 or fill out our contact form.
Let us know you were sued by National Collegiate Student Loan Trust and when you were served.
Please also include the county where you were served and the case number.
That way we can look up your case and be prepared when we speak with you.
We look forward to helping you.
Thanks for reading, and have a great day!