Have you been sued by National Collegiate? We’ve seen a tremendous increase in lawsuits filed by this company since mid 2012 and have helped our clients deal with these issues with great success.
National Collegiate Funding is a company that buys student loans, often times shortly after the loans are made. We’ve seen them buy loans from Bank of America, Charter One, Credit One, Citibank, PNC and others. Most of these loans were taken out in between the years 2004-2007, so they’re fairly old loans. In many cases, our clients have never made a payment on these loans, and often this occurs because the loans were “lost” for a period of time.
Believe it or not, these lawsuits are very winnable. National Collegiate has a fairly high threshold to cross to prove their case against you. In a nutshell, they need to prove that you had a loan, that they own the loan and are the proper party to sue you, that the terms and conditions of the loan have not been met, that they are within the statute of limitations on pursuing a claim on the loan, and finally they have to prove the amount that they allege is due and owing is correct.
In many instances, if not all instances, we have found that they have difficulty with a few of these issues of proof. To begin, they need to prove that you had a loan. Often times, they can do this. We’ve seen them produce a signed loan on most of the cases that we’ve handled. Where they run into a problem is trying to prove that they own the loan and are the proper party to sue you. When National Collegiate Funding buys the loans, they then transfer them to subsidiaries such as National Collegiate Student Loan Trust 2004-1, or National Collegiate Student Loan Trust 2007-3 (There are several trusts for each year from 2004-2007). The transfer from the original lender to National Collegiate Funding is done through what is called an Assignment. In many cases, we have found that there are numerous portions or sections of this Assignment that for whatever reason National Collegiate is unable or unwilling to produce. If they cannot prove ownership of the loan, then frankly nothing else matters….the lawsuit cannot move forward.
The other issues that they have problems with are proving the amount of the loan and proving that they are within the Statute of Limitations. For contract claims (which this would be) in Pennsylvania the SOL is 4 years from the date of the last payment. As mentioned above, many of our clients have never made a payment on these loans, again often through no fault of their own. Well, if the loan was taken in 2004 and the first payment was due in 2009, and NCT sued you in 2015, that is a real problem for them… they are late in filing. If they are late, it is fatal to their claim. National Collegiate also seems to have a real difficulty in proving the amount of the claim. In other words, they often cannot prove that they amount that they are asking for in the lawsuit is correct. This is often because they have problems in coming up with a true and accurate payment history.
The Bonus Round
Sometimes our clients are lucky and get to play in the National Collegiate Student Loan Trust “bonus round”. The “bonus round” is a name that we made up for times when our clients can sue National Collegiate or its collectors for violations of debt collection laws. As mentioned above, lawsuits must be filed within the Statute of Limitations. If they are not, that is a violation of debt collection laws and it enables you to file a lawsuit against the violator. We’ve also seen instances where NCT or its agents have “made up” fake payments or used frivolous affidavits to try to prove their case. Again, these are violations of debt collection laws which allow you to pursue a claim against them. Another source of multiple violations has been the fact that NCT often sues people in the wrong jurisdiction. On any collection case involving a bank or lender or credit card company, the collector must sue the defendant in the jurisdiction in which they reside, or, in the jurisdiction where the agreement arose. This sounds like a simple task to meet, but, oftentimes these lawsuits are filed in the wrong jurisdiction.
For any claims against debt collectors, there is no additional out of pocket costs or fees. The laws that we sue under provide that the collector must pay our legal fees for pursuing any claims against them. Quite a fantastic bonus, wouldn’t you agree?