Student loan debt collections are big business for a number of collections agencies, which often bank on little resistance from defendant debtors. Default judgments can be obtained when debtors decide it’s not worth hiring an attorney and confronting the allegations in court. But as our student loan debt defense attorneys in Miami know, many of these cases can be successfully challenged.
Student loan debts have ballooned over the last 10 years, becoming the No. 1 source of household debt, aside from mortgages. Alongside this has coming a swell of defaults, which has meant collection companies wrestle tens of millions of dollars in settlements, default judgments, wage garnishments and other methods of compelled payments.
The New York Times recently explained how one of the largest student loan debt collection agencies, Transworld Systems, has risen to great prominence, filing more than 38,000 lawsuits against former students in the course of just three years – and that was on behalf of just one client: National Collegiate Student Loan Trusts. However, just as we saw in the foreclosure crisis a few years ago, many of these cases are inherently flawed. Much of the documentation the company uses to prove their case for a right to collection is based on very little verification. That’s according to both legal filings by a federal regulator, as well as an in-depth analysis by the The Times. Continue reading