student loan lawsuit defense

Being Sued For Student Loans: A Step-By-Step Guide (That Works)

May 15, 2020

You’re being sued for student loans and you have questions like:

  1. What is the statute of limitations on student loans?
  2. Can you make a settlement on student loans?
  3. Can wages be garnished for private student loans?

You’re also not sure what to do, when to do it, and what your options are.

Those questions are natural. Being sued for student loan debt is scary.

In this post, I promise to answer the questions above. But before I do that, let’s go over…

The 3 steps to take when you’re sued for student loan debt.

Step 1: Get background information

When you find out you’re being sued for student loans the natural thing to do is freak out.

You haven’t paid on the loan in a long time.

You don’t know how much you owe.

You haven’t heard of the company that’s suing you.

You don’t even know where the court is at.

Plus it’s kind of embarrassing, right?

The sheriff left a paper with a family member or friend. Or maybe they even served your co-signer with the lawsuit. Now everyone thinks you’re a deadbeat.

It’s a lot to deal with it.

I get it.

But you have to stop freaking out so you can find out:

  • What court you’re being sued in;
  • Who is suing you;
  • How much they’re suing you for; and
  • When you have to respond by.

All of this information should be with the summons you received.

national collegiate student loan trust summons

In my opinion, the one thing you really need to know is this:

When do you have to answer by?

The last thing you want to do is miss that date.

If you do, you could end up having a default judgment entered against.

And that would mean you would’ve lost without having offered a student loan lawsuit defense.

And it would also mean you could be facing a private student loan wage garnishment. (More on that later.)

Okay?

So now that you have that information, you’re ready to move on to…

Step 2: Speak with a student loan lawyer

Here’s the thing:

Even if you think you represent yourself, you should speak with a student loan lawyer.

Think about it.

Defending private student loan lawsuits isn’t your day-to-day job.

So it makes sense to speak with someone whose job that is.

I’ve previously written about how to find a qualified student loan lawyer so you can check out that article for a thorough guide.

But if you’re short on time, here’s the quickest way to find someone.

Go to Google and type in: “student loan lawyer” + “your location”.

 

From there, you’ll get back a few results. Go through the list and start reaching out to them to schedule an appointment.

In preparation for your appointment, take time to write down all your questions in advance.

 

Your goal is to get all of your questions answered. That way you can minimize any fears you may be having of being sued for student loans.

Once your meeting is over, it’s time for you to decide to hire someone, your work is done. They got this from here.

But if you decide to represent yourself, there’s more work to be done.

Step 3: Answer the private student loan lawsuit and go to court

You got this.

Here’s what you need to do.

First, look through the lawsuit paperwork. You’re trying to find the complaint. It should look something like this:

national collegiate student loan lawsuit example

Your job is to go numbered paragraph by paragraph and answer the petition.

Most times, your answer will either be to admit, deny, or say you can’t answer the paragraph for whatever reason.

You will also want to add any defenses you may have.

Here are some common defenses:

One other defense may be that you were a minor when you signed the loan. In some instances, this makes the loan invalid.

Sidenote 1. You might be overwhelmed trying to answer these paragraphs. If so, consider hiring a student loan lawyer to help you prepare your answers. Even if they’re not representing you in the lawsuit, some states allow them to help with your answers. Just a thought.

Sidenote 2. Don’t spend time worrying about what type of paper to use or how to format your answer. Most courts are pretty lenient with people representing themselves.

After you prepare your answer, it’s time to go to court on the scheduled date.

When you go, approach the bailiff and tell them your name.

Doing this accomplishes two things. First, it makes sure you’re in the right courtroom. Second, and more importantly, it lets them know you’re there and you’re ready to defend yourself.

From here, you may be approached by the attorney who filed the private student loan lawsuit. They might offer you a settlement or ask the case be continued.

No matter what happens, make sure you get it in writing, signed by the judge.

***

With those 3 steps out of the way, let’s answer some questions you might have when being sued for student loans.

What is the statute of limitations on student loans?

Let me set you straight on this:

It’s unlikely you’ll win your case because the statute of limitations passes.

Yes, it does happen.

But not all that often.

Here’s what I mean.

There are a lot of rules that stop the clock from running. For instance, it stops when you’re in a deferment or forbearance. It stops again (and may even restart) when you make a payment. And it also stops when you file bankruptcy.

So what I’m trying to say is that the statute of limitations isn’t some magic pill.

If you’re curious, Nolo has compiled a list of each state’s statute of limitations for written contracts.

Can you make a settlement on student loans?

Do you have a lump sum of money to offer as a settlement of your private student loan lawsuit?

Then you can probably settle your private student loan lawsuit for a lot less than you owe.

The process of settling is pretty straight-forward.

You make your offer. Your lender either accepts it or counters it.

Wash. Rinse. Repeat…until…

… a settlement is reached.

Over the years, I’ve seen all types of settlements.

Lump sums. Monthly payments. A lump sum with monthly payments.

There are few limits on private student loan settlements.

So be bold.

Ask for the moon. Settle for the stars.

Can wages be garnished for private student loans?

Last but not least, yes, your wages can be garnished for private student loans.

But not automatically.

Let me explain.

You’ll be garnished for a private student loan only if the private student loan lender sues you and gets a judgment.

Again, not until you’re sued and lose the lawsuit, can you be garnished for a private student loan.

Federal student loans, on the other hand, can start garnishing you without a judgment.

Further reading. How to stop student loan garnishment before it starts.

That’s obviously not everything…

Being sued for student loans presents a host of issues.

What we did in this post is to go over the highlights. Each student loan debt lawsuit is different.

Speak with a student loan lawyer in your state or…

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