What to Do if Sued by National Collegiate Student Loan Trust for Not Paying Private Student Loans

Question. What are my options if I have been sued by National Collegiate Student Loan Trust?

Answer. Getting served with a lawsuit isn’t an enjoyable experience. If you aren’t familiar with the legal process, it can leave you confused, anxious and overwhelmed. I have spoken with a fair number of people that have been sued after they stopped paying their private student loans. National Collegiate Student Loan Trust (also known as NCT or National Collegiate Trust), EduCap and ACS are three entities you may hear from if you have defaulted in your payments. They or their attorneys will turn up the collection efforts. But if they fail to get you into a repayment plan, a lawsuit will likely follow. So what do you do if you get sued by National Collegiate Student Loan Trust? Here are 3 options:

1. Ignore the lawsuit. If you are served with a lawsuit in California, the general rule is that you have 30 days to file a response, an Answer, to the lawsuit. If you do not file an answer within this time frame, the Plaintiff that sued you can ask the court to enter judgment against you by default without you ever having your day in court. This is probably the worst decision you could make. With a judgment in hand, the Plaintiff can now garnish your wages or levy your bank accounts until the judgment is paid in full (with post-judgment interest that calculates at 10% per year).

2. Answer and defend against the lawsuit. By filing an Answer to the lawsuit, you are telling the Court and the other side that you may have some arguments or that you aren’t going to give the Plaintiff an easy win. The court imposes a filing fee when you file your answer. The amount varies depending on the amount you are sued for, but can generally range from $200-$400 per Defendant. This strategy can also buy you some time if your intention is to try to settle the case short of trial. Once an answer is filed, the court will schedule a Case Management Conference. Depending on how backed up the Court is, this hearing will likely be scheduled 6 months out or as long as a year or more out in certain counties like Los Angeles. No evidence is considered at this hearing. The main purpose is to schedule a trial date. Again, depending on the court’s docket, you could be another 6-12 months away from a trial. While the case is pending, the parties have plenty of time to either settle the case or prepare it for trial. Few cases actually make it to trial as most parties are eager to resolve the matter.

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3. Settle. A settlement is still possible even if you have been sued. Most private student loan lenders would rather have some sort of settlement in place rather than chase you down post-judgment. I have highlighted some of my recent successes with National Collegiate Student Loan Trust on my website. Lump sum settlements may get you a lower overall settlement, but getting a settlement over a longer term with monthly payments is a possibility. I have seen terms as long as 84 months to pay off a settled amount. The great thing about settlements is that they are usually interest-free.

Getting your private student settled can have a number of benefits. You credit score will improve. You will know exactly what you owe and how long it will take you to have them paid off. Perhaps most important, you will have peace of mind knowing that your financial life is in order. Getting involved in a lawsuit and settlement discussions can be an intimidating process. The other side has a lawyer. You should too. Although you will be paying an attorney, you will most likely end up saving even more in the end. I would suggest speaking with a private student loan debt settlement attorney to discuss your options if you have been sued by National Collegiate Student Loan Trust or any other private student loan lender.

Daniel R. Gamez, an attorney focusing exclusively in debt settlement, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in La Jolla, CA. For more information, please contact Daniel Gamez at 858-217-5051, daniel@gamezlawfirm.com or visit gamezlawfirm.com.

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