Private Student Loan Lawsuits & Judgments - A Primer
Lawsuits attempting collection for private student loans are not much different then lawsuits to collect credit cards or any other unsecured debt. The lenders goal is to get a judgment, so they can try to execute it by garnishinging your wages, freezing your bank account, or putting a lien on real property (all where applicable). With the interest and other fees that accrue, it puts the lender in a good position. They tend to recover more money when they have a judgment.
There are several ways of ending up with a judgment. A default judgment may be entered against a defendant that did not not answer the lawsuit in time, or missed a court appearance. Or, a judgment can be entered during litigation, by way of motion for summary judgment, or at trial. A defendant should be putting forth every effort to avoid entry of judgment.
By submitting an Answer to the Complaint, a defendant has the opportunity to assert any applicable defenses or counterclaims. The analysis of what might be applicable to any particular case should be determined with the assistance of lawyers experienced in student loan lawsuit defense. There is also a possibility that the lawsuit can be resolved by way of a settlement, where the balance on the private student loan debt may be reduced, in exchange for payment. All settlements should be in writing and the borrower should have a clear understanding of the terms prior to confirming the agreement.
Ultimately, every option that can help avoid judgment should be considered. Private student loan lawsuits should be responded to in accordance to the New York Rules of Civil Procedure and the respective court.
Tip: You can visit your local court clerk for forms and information on how to respond to a civil lawsuit to represent yourself "pro-se".
Disclaimer: This article may be considered Attorney Advertising. The contents are not legal advice. For informational purposes only. Each case and client is unique. Results vary. This article is not comprehensive of all options and benefits available to any particular borrower. State law varies with respect to lawsuits, judgments, and remedies for execution. Seek a consultation with an attorney for an analysis and advise for your particular situation.